Select Committee on Work and Pensions Second Report

2 Our approach

7. In March 1999, the Prime Minister committed the Government to eradicating child poverty "within a generation". The Committee understands child poverty to be an aspect of family poverty. Following substantial growth in the national child poverty rate from the early 1980s, the rate peaked at around 34% in 1996-97 and since then has been on a downward trend. Currently, some 3.6 million children in Great Britain are in relative poverty - a rate of 28% in Great Britain. This report analyses the effectiveness of the Government's anti-poverty strategy, examines what needs to be done to ensure that the child poverty targets are met, and looks to the future by considering child poverty broadly and making recommendations accordingly. However, first it is worth attempting to answer the question - why did child poverty increase by so much?

8. The answer is that the past few decades have seen fundamental social, economic and demographic changes which have strongly influenced the child poverty rate. For example, unemployment increased sharply in the first half of the 1980s - peaking at more than three million - with another peak occurring in the early 1990s. Although the UK now has the lowest unemployment rate since 1975 (2.9%) and a claimant count of 885,200 (1.44 million using the ILO measure), rates of economic inactivity have risen so that more than one in five (21.3%) of the working age population is now without a job and not actively seeking work. The proportion of workless households doubled from less than 10% in the mid 1970s to nearly 20% in 1996 - the rate is currently just under 16%, and for households with children is 15%.[4] Employment patterns have also changed with a substantial growth in part-time work, temporary and short-term contract work and in self-employment. More women are now employed and the nature of work itself has changed with a decline in manufacturing and a rise in service industries.

9. The child poverty rate is also affected by the large-scale changes in family formation that have occurred in recent decades with a large increase in lone parent families, who now make up a quarter of all families with children in the UK[5]. The proportion of children living in lone parent families increased from 7% in 1972 to 25% in 2003[6] - one of the highest rates in the EU[7]. The most common route into lone parenthood is marriage breakdown, with over half of lone parents being divorced or separated. In addition, a significant number of lone parents are ex-cohabitees.[8] In 1971 there were less than 80,000 divorces, but this peaked at 180,000 in 1993 before falling to 157,000 in 2001. The UK has the third highest divorce rate in the EU (2.7 per thousand population) and the fourth highest rate of births outside of marriage (41%) although, in 2002, nearly two-thirds (64%) of the births outside of marriage were jointly registered by cohabiting couples living at the same address - more than twice the proportion in 1986.[9]

10. It can be argued that the high unemployment rates outlined in paragraph eight and marital and relationship breakdown interact, thereby decreasing family incomes, undermining stable parenting, and increasing child poverty. A literature review on families examined the range of research on family change and identified several factors that increase the likelihood of marital breakdown, concluding that economic disadvantage is clearly linked with divorce, cohabitation, lone parenthood and step-families. The review also acknowledged that cultural and attitudinal changes have contributed to changing family structures and that the relationship between these changes and structural changes in society are complex.[10]

11. Teenage pregnancy has also become a worrying aspect of the social landscape with the UK continuing to have the highest teenage birth rate in Western Europe. Although conception rates in England for under 18s have fallen since the teenage pregnancy strategy was established in 1999, the rate has increased from 2001 to 2002.[11] The children of teenage parents are more likely than children of older parents to be in poverty and are also more likely to suffer adverse outcomes as they get older. In addition, the likelihood of teenage pregnancy is greater for those who have grown up in poverty.

12. Other instances of social change have occurred which are also strongly associated with poverty. These include an increase in rates of people reporting a limiting long-term illness or disability, an increasing minority ethnic population and an increase in people seeking asylum in the UK.

13. Against this backdrop of social and economic change child poverty grew to unacceptable levels and children in all of the groups outlined so far were at particular risk of poverty. However, it would be too simplistic to argue a direct causal link with characteristics such as worklessness, lone parenthood or teenage pregnancy. As the Child Poverty Action Group (CPAG) point out, even the most affluent people may share these characteristics - the difference is that they are able to buy their way out of deprivation and exclusion.[12] In addition, similar social and economic changes have been seen in other countries too, yet they did not experience the same increase in the child poverty rate. The difference may be that our social protection system operated less successfully then those of comparative countries, that our policy framework for families was less developed than theirs, that our rises in unemployment were especially severe, that our family structure was especially vulnerable or a combination of some or all of these factors. The question remains: what can the Government do to ensure that families have enough income to provide a decent standard of living and to lift children out of poverty and, more broadly, in partnership with the voluntary and community sectors to increase good parenting, family stability and children's life chances?

14. From 1980 to 1997, relative child poverty rose markedly, although average absolute expenditure by poor families also rose. That rise in relative poverty has been attributed by some commentators to some of the policies of past governments, for example, the freeze on Child Benefit.

15. The Government's approach to benefits and tax credits has been called 'progressive universalism' and is described in the Pre-Budget Report as providing "…help for all families and more help for those who need it most, when they need it most."[13] Universal support is provided through Child Benefit and targetted support through the progressive Child Tax Credit which aims to reach up to 90% of all families with children. While a targetted approach may be the most cost-effective method of raising the income of low-income families there has to be recognition of the negative side-effects associated with targetting, including disincentives to work, administrative costs, eligibility, regional disparities and non-take-up of benefits.

16. It should also be added that with the current attention on the 2004 target to reduce child poverty by a quarter, it is easy to focus on poverty defined as a lack of income and ignore other aspects of poverty, including social exclusion. There is considerable debate around what is actually meant by the term social exclusion[14] and, as the first Opportunity For All report noted, the terms social exclusion and poverty are often used interchangeably. Opportunity For All uses the Prime Minister's description of social exclusion as:

    "A short-hand label for what can happen when individuals or areas suffer from a combination of linked problems such as unemployment, poor skills, low incomes, poor housing, high crime environments, bad health and family breakdown."[15]

17. The question has also been raised of whether the emphasis on the income measure of poverty means that anti-poverty strategies tend to focus the policy response on increasing parents' incomes through a combination of raising employment rates and reforming tax and benefits rather than, for example, focusing on improving outcomes for children by improving public services or supporting stable parenting.[16] There is a debate to be had on this issue and on whether the new poverty measure, which includes a measure of deprivation, will change things.

18. Finally, in spite of recent and welcome increases to the income of poor families through the £3.50 per week increase in the child element of Child Tax Credit, it could be argued that the Government appears to have placed more emphasis on poverty alleviation by encouraging people into work through a wide range of employment initiatives and work incentives. While some of these have undoubtedly been successful, there may be limits to how far the strategy can go. The various employment PSA targets for different groups show that the Department is struggling to increase the employment rate of minority ethnic people and disabled people in particular. The rise in lone parent employment is also slowing. This suggests that a new employment strategy is needed, which recognises the multiple and diverse barriers to work faced by some groups. In addition, for some people, the Department might be approaching the limits of what can be achieved through the welfare to work strategy, so that increasing benefits and tax credits for those who are unable to work may be the best way to further reduce child poverty and hit the 2010 target.

19. The Committee recommends that a comprehensive UK-wide strategy for reducing child poverty is drawn up and published as part of the forthcoming Spending Review. The strategy should consolidate existing child poverty reduction goals and other PSA targets and establish a clear policy framework to be pursued between now and 2010.

4   ONS, Labour Force Survey, Autumn 2003 Back

5   ONS (2002) Living in Britain: results from the 2001 General Household Survey, London TSO Back

6   ONS (2004) Social Trends, No 34, London: TSO Back

7   DWP, Family Resources Survey 2002-03 Back

8   Labour Force Survey figures, quoted in One Parent Families: the facts 2003 Back

9   ONS (2004) Social Trends, No 34 Back

10   Millar J & Ridge T (2001) Families, poverty work and care, DWP Research Report No 153, Leeds: CDS Back

11   The current conception rate is 42.6 per 1,000 females aged 15-17, compared with 47 per 1,000 in 1998. Back

12   Flaherty J et al (2004) Poverty: the facts, London: CPAG Back

13   HMT, Pre-Budget Report, December 2003,Cm 6042 pg 97 Back

14   Ev 62 Back

15   Department for Social Security, Opportunity For All: First Annual Report 1999, CM4445, Sepr 1999 Back

16   Ev 126 Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2004
Prepared 23 April 2004