The Government is committed to tackling child poverty and improving children’s life chances. The existing income-based child poverty measures, introduced in the Child Poverty Act 2010, do not address the root causes of poverty and incentivise Government to focus only on the symptoms. That is why the Welfare Reform and Work Bill contains provisions to repeal the 2010 measures and introduce new life chances measures of worklessness and educational attainment. Annual reporting on these new measures will ensure Government is focussing action in the areas that the evidence shows are most important for children’s life chances.
Setting targets based on relative income does not encourage policymakers to address the underlying causes of poverty. It led the previous Labour Government to simply spend more and more money on income transfers to lift people just over the poverty threshold, without doing anything about why those people were in poverty in the first place. The relative income measures showed the number of children in relative poverty falling during the last recession because of falling median incomes, but of course in reality children were not better off at all.
The Government will still publish official data annually on low incomes in the Households Below Average Income statistics. Ministers have committed to this in Parliament. These figures include measures of both relative and absolute low income, and will be there for all to see. I do not believe, however, that requiring reporting on these measures for the purposes of the Government’s life chances strategy would lead to better outcomes for children. We must focus Government attention on the root causes of poverty, not the symptoms.
I think it is important to note that one of the Government’s biggest priorities is ensuring work pays and that working families have enough to live. The Government has already delivered increases in the minimum wage, and the new National Living Wage in place from April 2016 will mean someone currently on the minimum wage will see their pay rise by a third by 2020. At the same time, the new Universal Credit system will ensure it always pays to go out to work, and raising the income tax personal allowance will mean that those on lower incomes will keep more of what they earn. Significant increases in the childcare support available for working parents will also make it easier to combine work with raising a family.