Episode 24: Child Poverty
Mubin speaks to Alison Garnham from Child Poverty Action Group about what can be done to reduce child poverty in the UK. They discuss how child poverty has been reduced in the past and how policy really can reduce child poverty.
The Trust has funded the following reports on child poverty:
Exploring the lived experiences of childcare for parents on Universal Credit
Financial stress and maternity leave
How to improve the system for people migrating from legacy benefits
Flexible affordable childcare solutions
Transcript
Mubin Haq: Welcome to another episode of the Financial Fairness podcast with me, Mubin Haq. Our focus today is child poverty. The numbers living in child poverty are set to rise over this parliament if no action is taken. That's a grim projection. The government is busy developing a new strategy to address this. But will it go far enough? Can the limitations on public spending deliver radical action? And what can we learn from past governments to try and address this issue?
These are some of the questions we'll be exploring in today's Financial Fairness podcast, and I'm delighted to have Alison Garnham joining us. Alison has been working in the field of social security for many years, having been a welfare rights adviser and, for over a decade, leading the work of Child Poverty Action Group.
Alison, welcome back. It's really great to have you on the podcast again.
Alison Garnham: Thank you. Lovely to be here.
Mubin: So last time you joined us, we were talking about poverty in general. Today we're going to be focusing on child poverty. So can you just set a scene for us in terms of what's the picture of child poverty in the UK and what have been the long term trends?
Alison: So we saw quite a significant fall in child poverty, between ‘98 and 2010. And since then it's been on the rise. So it's risen by 700,000 since 2010. So that's to 4.3 million, that's nine children in every class of 30. And we know pretty much what's caused that. We saw over 50 cuts or freezes to benefits after 2010. We now spend something like £50 billion a year less on social security than we did in 2010. And that's clearly as a result of those cuts. So that's what's been driving the rise in child poverty.
In fact, we had the largest increase in relative child poverty of any advanced economy, according to Unicef. And out of those children, 1 in 5, 900,000 children are in food insecure households. So we've seen the consequences of that rise in child poverty, in the development of things like food banks, which were kind of unheard of before 2010. So it's really serious. We work in schools and we see children arriving at school hungry. They can't concentrate. They feel less safe. They're more likely to be absent, to experience bullying, to experience poor mental health. They can't afford the school equipment they need. They miss out on everyday experiences that make up childhood, like school trips, and they return to cold homes. None of it is inevitable.
Mubin: So I'm going to dial back a bit, go back in time to that period you talked about at the start, which was this fall in child poverty. So we're going back about three decades - New Labour had tackling child poverty as a priority. What did they actually do?
Alison: So there were a lot of policies that were new at that time. And I think we forget that they were new at that time. We saw the first ever childcare act in the UK. We saw the Free Early Years Education Entitlement introduced. We had the promise of extended schools. We had the new deals, particularly New Deal for Lone Parents, which doubled lone parents’ chances of getting a job.
We had the national minimum wage introduced. We had the development of Sure Start, educational reform, educational maintenance allowances. So a whole range of policies that were targeted to children and young people. And one of the chief actors actually in the strategy was the development of tax credits in the first place and increases in child benefit. So there were direct improvements in the income of families with children.
Mubin: Can you just explain what tax credits are?
Alison: So tax credits were developed as a kind of, a top up to wages, so the idea was that you had a a base level of child benefit, and then you had a child tax credit, which was about addressing the cost of children, but was tapered away. So once you get to a certain level of income, it started to reduce and disappear.
One of the things that was very new with tax credits was that it gave upfront cash with childcare costs, that hadn't been the case before. And that was quite revolutionary, particularly for single parents. When that came in, I was working at One Parent Families. In fact, we used to get unsolicited phone calls from a single parent saying, ‘Goodness me, I can work for the first time’. They really noticed it made a massive difference.
Mubin: And what you're describing there was like a plethora of action which was taken by the government, from the minimum wage to Sure Start, to tax credits. Was there a plan to all of this?
Alison: Well, there was quite a lot of collaboration. If you talk to the key actors involved last time who were in number ten or you know who were working on Sure Start or in the Treasury, they did collaborate a lot with each other, with the result that it was a strategy that ran right across government.
They had shared targets in Work and Pensions, Education, Treasury, and of course it was led from the top. And I think that's what distinguished the last strategy was Tony Blair and Gordon Brown both owned the strategy. It was a very effective cross-government strategy. And I think that because of leadership from the top.
Mubin: So why do you think it was such a high priority for Blair and Brown and for ministers? What was driving that?
Alison: So there were a lot of concerns at the time. I mean there had been a period of very unhelpful shaming of single parents. People were worried about teenage pregnancy, people were concerned about children not doing well at school, and also politicians of their generation came into politics knowing all the arguments about child poverty.
It kind of coincided with also a lot of politicians like Harriet Harman, Patricia Hewitt, Margaret Hodge, who wanted to take action on things like childcare, who were feminist politicians, if you like, who wanted to improve the lot of mothers and children. So there was a kind of a coincidence of interests, I think at the time.
It also was popular. I mean we used to poll people, as part of End Child Poverty at the time, if you asked the public if it thinks something should be done about child poverty, 80% of people said it should. And if you asked them whose job it was to do something about it, they said it was the government's job. So there was clear support when you asked people. It’s not like people were marching the streets calling for a reduction to child poverty but when you asked them, it was something that they supported.
Mubin: And I suppose part of this was chicken and egg. So the government saying it's a priority, maybe the public get behind it more, do you think that was the case?
Alison: I think that’s absolutely right, Mubin. There's a big role for leadership in these things. You know, we've had 15 years of people talking about ‘strivers and skivers’ and too many people on benefits and people pick that up. But if you talk differently, they pick that up, too. You can change public opinion through leadership.
Mubin: Yeah. So they had this plan and they had targets. Can you just remind us, because it seems like quite a long time ago, what they were and what was actually achieved?
Alison: So they had a target, it was based on 60% of median income before housing costs. And the target was to reduce it by a quarter in five years and to half it in ten.
In fact, after ten years, they'd got halfway to 10%. And that's significant because, when Tony Blair made his original speech in Toynbee Hall in ‘98, he said it was a 20-year mission and that the challenge was to end child poverty, to eliminate it, eradicate child poverty.
And so eradication was reducing child poverty to 10%. And they used that by looking at what the best countries in the world did. Halfway to zero was the target. So that was a bit of a foolish target to set for themselves, frankly.
Mubin: So when they started, what was the number and what did they actually get to?
Alison: Yeah. So there were. I’m trying to remember this – 1998, on before-housing-costs target, there were 3.4 million children in poverty. By 2010, child poverty had reduced to 2.3 million. So they'd taken about 1.1 million children out of poverty on that measure.
On percentages, it went from about 27% in 1997 down to 18% in 2010.
Mubin: Okay. So quite a big fall.
Alison: Yeah, it doesn’t look so good on the after-housing-cost measure, which is the one they're going to use now. It looks like there's about 700,000 children rather than a million. But on the target they set themselves, they did well.
Mubin: And were you surprised that they met this target or did they actually meet the target? I was a bit confused.
Alison: No, I think I think it's widely understood that they didn't because they didn't halve child poverty. Yeah, but my point is they got halfway to 10%, which would have been a better indicator.
I think it demonstrates really clearly that child poverty is really policy responsive. That if you do the right thing, it really does come down. And if you don't, it doesn't. And that does mean investment in Social Security, amongst other things. I mean, all the other things I've described are really important in improving family incomes. If you've got children who are healthier, better educated, leaving school better qualified, going into the labour market in a better position, that obviously has a big effect on your economy. And those are precisely the effects the government wanted to see.
Mubin: Yeah. So we've talked about that period when Labour was in office and they came out in 2010. What happened under the governments that followed? Just give us a quick snapshot.
Alison: Quick snapshot was we had austerity. And in 2010, the Budget and Spending Review announced about £30 billion of cuts to Social Security. We calculate over time after those cuts have been rolled out. It's about £50 billion a year that's been taken out of Social Security. We saw a whole range of cuts - one of the most significant ones was that benefits only increased with headline inflation in five out of the last 14 years. So there's been, benefits have not kept up with the cost of living. And that's why you see the growth of food banks and so on. Pensions by contrast, of course, have had the triple lock. But working age families have had the value of benefits and in-work support reducing. So they’ve been on a downward escalator when everyone else has been on an upward escalator.
Mubin: So early on when we started, you talked about this rise in child poverty, I think you mentioned a 700,000 increase. Obviously, we've seen a growing population too. Some of the statistics I've seen from the Institute for Fiscal Studies, for example, show back in 2010, actually poverty was about 30% - child poverty this is. And it's been pretty static over that period. Has it actually increased, Alison?
Alison: Well, looking at the after-housing-cost measure, which thankfully everyone has now at least agreed on which measure we're using because that's a better representation of people's disposable income. 2010, on that measure, there were 27% of children in poverty. That rose to 31% in 2019-20. So just before Covid hit, child poverty had already risen significantly by about 4%. When they introduced the £20 addition to Universal Credit, it came down. And when they removed it, it started going back up again. So it went down to 27 and back up to 30. So the latest figures show it back up at 30. So it hasn't been that static.
Mubin: Yeah, I well I think when I looked at 2009-10 it was 30%. Does that surprise you that, despite these fluctuations, that it’s remained roughly at the same level? Despite quite, you know, serious austerity and a huge amount coming out of the social security budget?
Alison: Well, it's gone up and down a bit hasn't it. So it was low and then rose, as I say, up to the Covid period. And then fell again afterwards because of the additional money. And now it's going back up again. Also the cuts haven't fully rolled out yet, have they? Unless it's stopped, some of the changes introduced in 2015 like the two-child limit, the benefit cap increase, and so on and so forth. Those are still rolling out. In fact, they’ve only affected a portion of the population and that will get more.
Mubin: Okay. So, one other thing that's quite interesting is who's affected. So if you look at families with one or two children, actually it looks as if poverty has decreased. So over that period it's fallen from about 27% to 22%. These again, are Institute for Fiscal Studies figures. But for larger families it's really increased substantially from 35 to 46%.
Alison: Yes.
Mubin: Could you just explain what's driving that trend? Because there's been a lot of talk about larger families, the two child limit, etc. What’s driving this difference?
Alison: The two child limit makes sure that nobody with more than two children gets any help with their children. So they're losing over £3,000 a year per child. So that came in, in 2017, just for new children born after that point. So that's why I say it's only just rolling out. So it still hasn't hit the full impact of it. If you add the benefit cap, which limits the amount of benefit that you can receive to a certain amount of people, often mix the two things together. But they both significantly hit families, large families.
The two child limit, if it were removed, if it was abolished, it would immediately lift 350,000 children out of poverty and stop another 150,000 being drawn into it over this parliament. At the moment, there are 1.6 million in 440,000 households affected by the two child limit, losing £3,455 a year. 20,000 more children have been pulled into poverty since Labour took power. That's 109 children a day. So this is something still rolling out.
Benefit cap - what that does is to increase the depth of poverty. Very often if you look at a capped family and you remove the benefit cap, it reduces the depth of poverty. They don't come out of poverty, they just go from being somebody £95 below the poverty line to £35 below the poverty line. They don't actually break out, but if you abolished it, it would reduce the depth of poverty for about 300,000 children.
So those two policies are making it particularly difficult for what are now termed ‘larger families’. I don't know about you, but I grew up in a family with three children. That was normal in the 1960s and 70s.
Mubin: I grew up in, there were six of us, so that was a very large family.
Alison: But apparently having a third child now means you got a large family and you don't get any money.
Mubin: What was behind that policy, Alison, when it was introduced? What was driving the government?
Alison: There’s, the stated intention that people on low incomes should make the same decisions about family size as people who are living on wages.
So it kind of poses the false dichotomy that there are families who just work, and there are families who just get benefits. And of course, nothing could be further from the truth. 60% of people affected by the two child limit are working, but they're being topped up by universal Credit. So they’re benefit claimants to that extent but they're working families.
So child poverty is no longer about being out of work. It's pretty much about being in work and wages not being enough to support your family.
Mubin: So Labour are back in power. Government elected last year, and it's made some promises on child poverty. Probably not on the same scale that we had back in ‘97. But could you just explain what Labour have set out in terms of what they’re planning to do? Before they got elected and then since then?
Alison: We worked very hard on this actually, to get Labour into position where they wanted to have a child poverty strategy. It became part of Labour policy, in the summer before the election and went into their national policy document at the conference. At that point, we didn't know whether it would appear in the manifesto, but it did. So that was great. So they made a commitment in the manifesto that they would have a child poverty strategy and they would have a review of Universal Credit.
For Child Poverty Action Group, this was a massive achievement. We had been arguing for a child poverty strategy to be reintroduced since the last one was abolished. So, what they then did, in office was to produce a document which said it will be led by the Department for Work and Pensions, Liz Kendall and Bridget Phillipson at the Department for Education. They produced a document saying that they would have four areas that they would want to focus on. Income, expenditure - so costs generally - financial insecurity, and early years - services essentially. So the focus is on those four areas.
There's been really good engagement with them actually. And actually, people want it to be a strategy that has robust targets and ambitious targets like before. They want it to be strongly led from the top. They want it to have local strategies like it did last time. They want some focus on the most disadvantaged and the most at risk families, which I think was perhaps missing last time.
So I think last time there was insufficient focus, for example, on black and minoritised families because the rate of child poverty is incredibly high, it’s over 50% for black, British Black, Afro Caribbean families in the UK. And they should focus on refugee children, gypsy Roma children, children in one parent families, families where there’s someone with a disability, because we know those are the most at-risk families.
The question is, unlike last time, is there going to be the same commitment of funds to do the sorts of things that we think are essential in order to really make a difference to the child poverty figures? We're waiting to see. The strategy is supposed to be announced in June, although there’s rumours it could be delayed.
Mubin: And so within that strategy, in terms of brass tacks, what would you like to see?
Alison: So it needs to be across government like it was last time. But our approach is really simple. First you need to remove the cuts that are driving child poverty up. Second, you need to invest in the policies that will prevent and reduce child poverty. And thirdly, we need to imagine a society with no child poverty and develop a strategy to eliminate it.
And step one, removing the cuts that are driving child poverty up. It's obvious what that is. It's removing the two child and the benefit cap. You can't have any impact on rising rates of child poverty until you do that, because anything else you do will produce no results because those policies will continue to drive numbers of children in poverty up.
We also want things like a restoration of Child Benefit. It's lost 20% of its value since 2010. And that would have a big anti-poverty effect. And we'd like to see action on free school meals. First of all, extend to all on Universal Credit. And then we would like to see them made universal. I think it would make a huge difference to the costs to families and also to the experience of school.
And then as I said, across government, you need to look at the whole lifecycle of children. You look at parental leave, you look at the early years, you look at housing and health, and so on. And we'd like it to be cross-government like that.
The other thing is, of course, you need action at local authority level. So last time, local authorities were required to produce child poverty plans every three years. Obviously, the situation is different with devolved governments. Now since we've moved to more regional authorities and mayors. So we’ll have to work out how that's divided up. But then what they must do is give local authorities some resources, because if you give local authorities responsibilities and nothing to do anything with, then that's a problem. I think you've seen that in Scotland, actually, with more responsibilities to local authorities, but no funding to follow it, which means that there's very little they can do.
Mubin: Can I talk about the two child limit? Because this has become a totemic issue in some ways with the government. So a huge amount of speculation as to whether or not it will go. And there's been some reports that it won't be scrapped fully but, for example, it may end for families who have children under five. What's your take on that if there's just part changes rather than full changes?
Alison: So, I'm actually very concerned about this. Lots of this speculation has come from outside of government. And when you talk to people concerned with the strategy, they say it isn’t really coming from them. So some of it is about think tanks trying to think up clever wheezes, which is really unhelpful.
A lot of the problem with these suggestions is they create huge cliff edges. So if you have it for just under fives and then suddenly when your children hit five, you lose a lot of money. That's kind of a really crazy thing to do to families. Similarly, in work, you lose your job and suddenly you lose all the support with your children. So crashing out of work goes from being a problem to being a catastrophe.
It becomes a moral question for me, I'm afraid. I just think that it's immoral to continue to trouser the proceeds from cuts that were criticised at the time. Because essentially that's what's happening now. The government is getting the money that was earmarked through those cuts. Well, that needs to stop.
The clear function of these policies is that it’s driving up child poverty. That's all it's doing. There was a claim that it would be a way of incentivising people to move into work. It isn't. So many of the particularly single parents affected have children too young to even be required to work. The work effect is tiny. I just think there's no argument or any compromise version.
Mubin: Yeah, you're really clear on that. One of the reasons why this is being suggested is because of increased pressures there are now, on public spending. So, the huge amounts needed to deal with NHS.
We've also got increased impetus in relation to defense spending. Starmer's made significant announcements of increasing that to 3% of GDP.
Projections on growth being weak really. You know, not the sort of heady uplands that we thought we might have. Given that situation, what do you think realistically can be done?
Alison: So I really appreciate that. I mean, so far there's not been great news has there, as you say, on growth, on diversion of funds towards defense, the international situation is not very helpful. So totally aware of all of that. But I do think it’s down to political choices, you know. Either this is a crucial issue and a priority for the government or it's not.
What would be the point of having a child poverty strategy that doesn't actually reduce child poverty? It would be it would be really concerning if that happened. And of course, there are other ways to increase revenue. You've seen it in Scotland for example. There's been a change in the way taxation is levied. It has been increased for the better off families. So there are things you can do. There's all sorts of discussion about wealth taxes, what needs to happen to local taxes. There's a lot of things that the governments can look at. And I appreciate the political situation is not exactly easy.
Obviously, I would say this, wouldn't I? But they need to take child poverty seriously. The evidence is so powerful that child poverty affects children's lives. It leads to a health divide, an educational divide, a wellbeing divide. Their experience of life leads them to have less confidence. It's drastically bad for the country. And the government knows this. So I think it's about political priorities.
Mubin: So on the priorities, and I was really struck by what you said earlier, which was back in ’97 this was Blair and Brown leading this. And I've not really seen the same kind of vigour from Keir Starmer and Rachel Reeves, and Liz Kendall and Bridget Phillipson as the secretaries of state leading this. Would you like to see more coming from that top leadership?
Alison: Yes, definitely. I think that needs to be really clear leadership from Number 10 and Number 11 to commit the funds and to promote action across government.
Unless it comes from that level, it's hard to insist that all departments take this seriously. I mean, I know the ministers will all tell you that it's a personal commitment of theirs and so on. But if you have responsibilities and priorities for your departments, that's going to come first, isn't it? So unless you've got Number 10 and Number 11 telling you that child poverty is part of what you're expected to do, it's going to be difficult to make that happen.
Mubin: And just to put this in context, you know, the Resolution Foundation have basically said if it's no action, child poverty is going to rise in this parliament.
It's going to rise from about 30% to about 33%. That is quite a staggering finding, isn't it?
Alison: It is a staggering finding. And this is why getting rid of two child limits and benefit cap is so critical because unless they go, child poverty will continue to rise.
Mubin: Now, I want to just turn to the public quickly, because one of the issues that's bandied about is the reason why there's inaction on child poverty is because this isn't a priority for the public. So could you just give your take on that in terms of where the public is on child poverty?
Alison: I think the difficulty is people don't ask them. And as I said before, when we have asked the public in the past about child poverty, they do place it as a very high priority.
And this is one of the reasons I want to hear the government talk loudly about child poverty, because I think that influences the public's agenda.
Also, I think people want to see action at home. People are concerned by cost-of-living pressures. They're concerned by the state of communities, you know, empty shops. Much of this is actually the result of the amount of money that's been taken out of people's pockets over the last 15 years.
You know, if you invest in families with children, it has a knock-on effect to the local economy. Low-income families spend every penny. It goes straight to the local economy. If you give money to better off people, it doesn't. So it's a very good investment for this country to invest in reducing child poverty because it leads to improvement. I can't see any reason why you wouldn't assume it would help with economic growth.
Mubin: So I think part of what you're saying is how we frame this. I mean, we're talking about cost of living. You know, that is still a major concern for the public and exactly what you were saying before. If we've got the sort of leadership from the government, then this can also drive public concern and support for tackling child poverty. Is that right?
Alison: Exactly. That's exactly right.
Mubin: Can I now just come to Labour Party members because, you know, this is a Labour government. How important is child poverty to them?
Alison: Oh, I think it's a big issue for party members. Getting this onto the agenda was pushed by local MPs and Labour Party members, as much as it was from frontbench members. This is something that Labour MPs really care about.
Mubin: So if they don't have comprehensive child poverty strategy, this could cause problems within the membership. Is that right?
Alison: Quite likely. I think people are waiting to see. You know, there's a lot going on trust at the moment isn’t there? They’re hoping to see what this comes forward with. They want to see a serious strategy.
Mubin: We've talked before about, differences around the country and Scotland actually does have child poverty targets. Could you just say a little bit about what's been happening in Scotland and what might be the lessons for the rest of the UK?
Alison: So I think Scotland shows us a number of things, doesn't it? It shows us that if you have serious targets then that drives important action. It’s led to the Scottish Child Payment. It's led to the desire to mitigate the two child policy. The government in Scotland knows that it's a long way off achieving its targets. But that means that it's possible then to pressure them to do the right thing. So that's been a real difference between Scotland and the rest of the UK.
I mean, in Wales they've had a child poverty strategy, but it has no targets attached to it, so it's pretty toothless. I'm sure there’s things they will do but it's very unlikely to have a big impact on child poverty, whereas in Scotland, we know that there is going to be a divergence in child poverty rates between Scotland and the rest of the UK. It will come down in Scotland, it hasn't shown yet, but we expect that they will. All the modelling suggests that it will, whereas in England it's going to continue to rise. So, you know, having a Child Poverty Act, having targets, has driven serious action in Scotland.
Mubin: Yeah. And just to explain that Scottish Child Payment, it's an additional weekly payment that goes to families for every child.
Alison: Yeah. So it compensates for what's happened to child benefit in the rest of the UK. It means that there's more money going into the pockets of families and children in Scotland than there is in the rest of the UK.
Mubin: You’ve been working in this field for a number of years. Alison, how hopeful are you that change is possible?
Alison: I'm really hopeful. I mean, you know, call me Pollyanna. It makes me hugely excited to see a government committing itself again to a child poverty strategy. It's what we hoped for. It's what we pushed for. It feels like a real achievement to get them in this place. I mean, we may still be disappointed. But we fight on. We know that child poverty responds absolutely to policy. And the good news is we know how to do this in the UK.
We've done it before. So we need to do it again. I feel really strongly about it and really optimistic, that we can make a real difference.
Mubin: Great. Thanks so much, Alison, for your time and for your thoughts on this really important subject.
Alison: You're welcome.
Mubin: And thanks to all of you for listening to the Financial Fairness podcast.
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