From beyond the political grave, how Gordon Brown could devastate the Coalition
The Institute for Fiscal Studies is predicting that child poverty will rise in the next couple of years, and as a result, the government will miss the so-called "child poverty target". I say "so-called" because it isn't actually a poverty target, but a measure of inequality. It defines "poverty" as receiving less than 60 percent of the average income. The target is a leftover from the Gordon Brown era, and in the dying days of his government he passed a law to make it legally binding on all future governments. But is "poverty" really the same as "inequality"?
This curious definition means that there are supposedly more people in "poverty" in Britain than there are in Poland. It even means there are more people in "poverty" today than there were hundreds of years ago, when almost everyone was living in squalor – but we were at least all more equally impoverished.
If that seems like an odd way to define "poverty", that's because it is. (We pointed out all kinds of other problems with this definition in our research note, "Poverty of Ambition".)
The political consequence of the target is that unless the government throws lots and lots of money at benefits for families with children, then "child poverty" inevitably increases. That's why, despite the age of austerity, George Osborne recently did just that with Child Tax Credits.
In the real world, rather than Gordon Brownland, this is a terrible way to fight poverty. It is about covering up the symptoms, rather than attacking to root causes. If the government has a pound to spend tackling poverty, the evidence is that it would be best to spend it on the root causes: reducing the number of households where no-one works; doing something about the 350,000 children living with drug-dependent parents; improving the sink schools that poor kids get sent to.
But no, the child poverty target forces the government to spend the money on benefits. Not only is this less effective, but for some people it may even have negative effects, if it reduces the incentives to work – because work is the real route out of poverty.
There's an old adage that if you give a man a fish, he'll eat today, but if you teach him how to fish, he'll be able to feed himself for a lifetime. Metaphorically speaking, Gordon Brown would have just given the guy the fish. I hope this government will be smarter.
The government should upgrade the poverty target, replacing the income inequality measure with a basket of indicators which would challenge the government to deal with the root causes of poverty. They should be demanding targets which will stretch the government to improve its performance on all the different dimensions of poverty. Frank Field's recent review pointed in this direction, and a number of other countries have switched from an income inequality target to a multi-dimensional, root causes target.
But do they have the guts to do it now? With so much going on, trying to deal with the fiscal mess they inherited, it would be wholly understandable if Cameron and Clegg felt they had their hands full.
Understandable – but a mistake.
What's the real lesson of the tuition fees debate? If you have a policy that isn't workable and you don't believe in, you should replace it as quickly as possible with a policy that will work. The government should want to be judged by their own standards, not the weird worldview of Gordon Brown.
At the start of this new government, they are strong enough to make the case for a better approach. In a few years time, they will be less able to shift the debate. The government has three choices. They can carry on where the last government left off, throwing money at benefits, and papering over the symptoms of poverty.
Or they can stick with the Gordon Brown measure, but not spend lots of money on benefits. In this case the numbers in "poverty" may well rise. Ironically, the better the recovery, and the faster the rise in the average wage, the worse the "poverty" measure will look.
Or, the government can do the brave thing, and upgrade the target now. In three years time, it will probably be too late: governments lose the power to change the debate from the moment they take office. If they don't do the brave thing now they might regret it politically. But much more importantly, we won't be tackling the real poverty that exists in Britain as effectively as we could be. And that would be the real shame.
Margaret Thatcher, über-moderniser – and the posters that prove it
November 20th, 2012 11:11
Why the Government is right to want to improve the poverty target
November 15th, 2012 12:04
The north's economy needs a radical new approach if it's going to catch up with the south
November 13th, 2012 13:36
Is Britain 'coming apart' as cultural inequality increases?
November 9th, 2012 18:17
Unlike America we don't elect a President. So let's never have presidential-style debates again
November 7th, 2012 11:25