Government to consider new ways of measuring child poverty

Mr Duncan Smith is to consult with members of the public in August and publish a green paper looking at new ways of measuring poverty, rather than using relative income alone as an indicator.

The Government’s current definition of child poverty is children living in households with 60 per cent less than the median UK income.

However, the work and pensions secretary has argued that basing child poverty on relative income alone is too narrow a measure, and that if average incomes fall, the poverty line falls too.

His announcement comes as the new Government statistics on child poverty for 2010/11 reveal that the aim to halve child poverty by 2010 has been missed by 600,000.

However, absolute poverty reduced by more than half (from 3.4 million children to 1.4 million children since 1999) and relative poverty reduced by 1.1 million children from 3.4 million to 2.3 million since 1999.

The figures, published in the Department of Work and Pensions report Households Below Average Incomes 2010/11, show that in 2010-11, 18 per cent of children (2.3million) lived in households classed as below the poverty line, a two-per-cent decrease on the previous year.

Mr Duncan Smith said he was not surprised by the statistics, but said that the Government still remains committed to meeting the child poverty targets.

He went on to say that it intends to eradicate child poverty at the source through Government interventions, tackling drug and alcohol addiction, dysfunctional family breakdown and getting people into work.

The work and pensions secretary said it wants to make work pay, more than a life on benefits, and that the introduction of the Universal Credit will make joining the workforce a much ‘smoother’ journey.

Alison Garnham, chief executive of Child Poverty Action Group, said, ‘We welcome the Coalition’s commitment to keeping the income targets and agree that any new ways of measuring child poverty should supplement what we have, rather than moving the goal posts.

‘We should look at how targets could drive progress in areas like social housing supply, living wage jobs, youth employment and affordable childcare. If we create more jobs, pay fair wages and drive up the supply of affordable homes, we can drive down child poverty at a faster pace and control the welfare budget without hacking holes in the safety net.’

IPPR director, Nick Pearce, said the latest figures showed a complex picture.

‘It’s wrong to think that relative child poverty was cut simply because median incomes fell during the recession, as some are claiming today. The child element of Child Tax Credit increased by £20 above indexation in 2010/11, giving an effective uprating of 2.9 per cent. This increased the incomes of families with children, particularly those with lower incomes or with more children, relative to others.

‘Given the fiscal position, Ministers should now focus resources on three clear priorities: ensuring under-fives don’t live in poverty, building a universal childcare system, and enabling families who work to leave behind the curse of poverty.

‘There are now more children living in poverty in households where one of the parents works than in workless households. Low income families can do all the right things – hold down jobs and raise their children as best they can – and still be poor if they can’t earn a decent living.’

Maggie Atkinson, Children’s Commissioner for England, said she would be concerned about any move away from measuring child poverty.

‘Although poverty is about more than income, this remains the key determinant of children's life chances. It is the most frequently used, internationally recognised means of measuring poverty, 'she said.

'I would be concerned by any move away from using it to help show that a family, and therefore its children, are poor. The United Nations Convention on the Rights of the Child explicitly says that State Parties must have families’ incomes at the heart of how they ensure children are given the stable, well supported lives we would all want for our children. 

'The UN Committee on the Rights of the Child sees child poverty as any state's failure to protect and promote children’s rights.  We made binding promises to ensure these entitlements, as a nation, when the UK ratified the UN Convention in 1991.  Promises should not be broken, especially promises made to children.’

'Biggest fall in middle incomes since 1981'

The Institute of Fiscal Studies said that the HBAI figures showed the 'biggest one-year fall in middle incomes since 1981'.

Researchers said that after inflation was taken into account median income in 2010-11 was no higher than in 2004-05.