Baroness Stroud is the Executive Director of the Centre for Social Justice.
In his Party Conference speech in October, the Prime Minister promised his Government would lead an “all-out assault” on poverty. His first step towards that goal is to change our approach to poverty fighting. Rather than just combatting poverty through financial redistribution, he has set out his vision to improve children’s life chances
What we measure is what we ultimately invest in. Up until now we have focused on measuring income by the households below average income (HBAI) statistics. But if we measure life chances we will also invest in supporting people by reversing the dynamics that cause people to be poor.
Tucked away in a government research document is evidence that 50 per cent of children who are poor in one year are not poor one year later. In Government jargon this is called “Poverty Churn”: significant numbers of poorer people are managing to get out of poverty. It is not the same families who are in poverty year on year. The fact that half these families get themselves out and can improve their own life chances leads us to ask the question: which families get stuck and why?
The current poverty measures are deeply flawed in a number of ways because of the impact on the median income:
- They show poverty falling when the economy is in recession;
- If you raise the National Living wage you can statistically increase child poverty;
- You invest in pensioners, and this too can plunge children into poverty.
For those who care about poverty this should matter. We do not want a measure that is so easy to move in the wrong direction when Governments do the right thing, and moves in the right direction when the economy is in recession. We want measures that:
- Accurately identify those we are concerned about;
- Incentivise Government support and intervention to do the right thing – to improve the life chances of those who are in poverty.
The life chances measures are designed to ask what drives poverty. They ask the question: who are these families and how can they best be supported?
The vast majority of children in poverty belong either to families who are workless or who are only working part-time. Seventy-four per cent of poor workless households who found work escaped poverty. This is why the Government has put employment at the heart of its life chances measures. There is no single other more effective anti-poverty fighting strategy than moving a family from unemployment to full time employment.
The second characteristic of those who get stuck is lack of skills or even no skills. This is why the Government is putting educational achievement at the heart of its strategy.
- Forty-four per cent of individuals in persistent poverty have no qualifications. Of children with parents without qualifications only 7 per cent had not experienced poverty;
- By contrast, of children with parents who were qualified above A-level standard, only 4 per cent experienced persistent poverty.
The importance of raising educational achievement for those on low incomes has never been so pressing. The resilience and resistance it provides to shield families from poverty is unquestionable and if government wants to change the life chances of a generation, this is the place to do it. There are three other entrenchment factors that will also be reported on: family stability, debt and addiction. Whilst causation or correlation will always be disputed these factors are present for families that get stuck or entrenched in poverty.
So we need to change these measures to ensure that governments have to wrestle with what really drives poverty and take steps to ensure that the next generation has a better chance than the previous. It is easy to give the family of an addict another £100 a week – government is good at that. But these are serious measures to ensure that governments place their money in significantly harder, but more effective in the long term, interventions.