Income and Poverty

The good and the bad of the child poverty numbers

  • Published: Jun 14, 2012
  • Author: Peter Kenway
  • Category: Income and Poverty

Three things catch our eye in new poverty statistics for 2010/11, published today: one good, one bad and one very important for understanding what so much modern child poverty is about.

The good news: depending on which of the official measures you look, the child poverty rate is now down at levels that have not been seen for 25 or even 30 years. So the 27% rate on the ‘after housing costs’ measure is better than anything since 1987 while the 18% rate on the ‘before housing costs’ is better than anything since 1981.

They are a few caveats here. Wearing our pointed hats, we strongly prefer the former measure to the latter (so the less sunny of the two versions of the story is the better one). And all the old data on poverty rates are much more dodgy than the recent stuff. 

The biggest caveat, however, is point two, the bad point: that the progress on child poverty in 2010/11 (two percentages points down) is because incomes in the middle – median income – fell, after inflation, by between three and four percent. This fall, which is not a surprise, takes median income back to the levels of seven or eight years ago. 

This does not invalidate the long term picture (since median income is still much higher now than a generation ago). But it is a cause for concern. In this situation, we would always want to place greater weight on the number of children living below the ‘fixed’ income poverty threshold. Since this was unchanged on a year earlier, we would say that in broad terms, child poverty is also unchanged over that period.

The third point is one that we have been going on about for at least a decade: the rise and rise of in-work poverty. If 2010/11 can be taken as Labour’s legacy, 1997/98 can be taken as the legacy of the last Conservative government. 

In that earlier year, just over half of all children in poverty belonged to workless families. Even then, the idea that poverty and worklessness were one and the same was wrong. But what has happened under Labour was that the proportion in working households rose again, now approaching 60% (depending on which measure is used). 

Two bottom lines here. One is that any discussion of child poverty must start from this fact that most children in poverty belong to working households – and the trend has been rising.

The other is that you can boil the Labour record on child poverty down to substantial progress on out-of-work poverty (down by a third) but almost no progress on in-work poverty. In that sentence lies both its success and failure.

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