Tackling child poverty: a liberal approach

by Stephen Tall on September 20, 2016

cpag-19sept16

I was one of the speakers at last night’s fringe meeting – hosted by the Child Poverty Action Group and the Education Policy Institute – alongside Alison Garnham (CPAG’s chief executive), former Lib Dem MP Jenny Willott and Lib Dem London Assembly member Caroline Pidgeon. The topic was ‘Turning the Tide 2020’, and what’s needed to stop the projected increases in child poverty during this parliament. Here’s (more or less) what I said…

Thank you to both the Child Poverty Action Group and the Education Policy Institute for convening this very timely debate. Timely because child poverty – which inevitably means family poverty – gets to the heart of some of the biggest issues we’re currently facing, including Brexit, the rise of Trump, anti-immigrant sentiment – even the Tories’ nostalgia throwback to grammar schools. I’ll try and briefly set out how for you here…

Overall our recent global history is one massive strives forward in banishing poverty. Johan Norberg’s just published book, Progress: Ten Reasons to Look Forward to the Future, highlights some of those big steps:

We’re wealthier: In 1820, 94% of humanity subsisted on less than $2 a day in modern money. That fell to 37% in 1990 and less than 10% in 2015.
We’re healthier: 68% of the world’s population have modern sanitation, up from 24% in 1980.
We’re smarter: Americans scored, on average, 100 points on IQ tests just after the second world war. By 2002, using the same test, this had risen to 118, with the biggest improvements in answers to the most abstract problems.

The explanation for this worldwide advance is down to a range of factors, but the two biggest are: better nutrition and better education.

I’m starting off with this global view because it encapsulates the argument I want to make. Too often debates about poverty and how to solve it get trapped by a false, unhelpful binary: that we have to choose between equality of outcomes and equality of opportunity.

That somehow there’s an either/or between governments only and simply creating the conditions in which individuals are able to make the most of their talents – ie, equality of opportunity – or governments having to take steps actively to re-distribute from the wealthiest to the poorest to ensure a civilised society – ie, equality of outcome.

I’m guessing it’s not controversial in this room (though it would be outside) to say we need both.

However, I’m also starting, quite deliberately, with these worldwide advances because the clear implication is one that, I suspect, will be more controversial in this room: globalisation has worked and is making the world a better place. Countries and continents that once faced widespread poverty are now much better off than they were.

That’s not just true of the emerging economies. It’s also true of the established western economies. A couple of weeks’ ago, the Resolution Foundation published a very interesting analysis of household income from 1988-2008. What it showed was that in western economies over those two decades even low- and middle-income families saw income growth of 50%, a little over 2% a year. Maybe not as high as we’ve all been used to, but not stagnant as we’re so often told.

There are, however, exceptions. The US for a start, which has seen poor income growth, with what there has been accruing to the richest. There’s the rise of Trump explained, right there.

And the UK is a partial exception. Not because there’s been, as often said, rising inequality. There hasn’t. Inequality rose in the 1980s and hasn’t worsened since.

The UK has, however, undoubtedly been affected by globalisation. Competition from Chinese exports, for example – great for us consumers, less good for manufacturing workers – has hit some areas hard. Much more so than immigration, though you can guess which of those two factors gets the blame! And it’s no coincidence that those were the places which voted most heavily for Brexit.

There is no contradiction in saying that globalisation works for most people, most of the time, in most places; while also recognising that some folk get left behind in the process.

The point I want to make today is that these problems are solveable: and therefore we should be optimistic and ambitious in tackling working families’ poverty.

The Resolution Foundation report identifies two of the biggest reasons why income rise in the UK have been slow in the past decade or more. Pre-crash, the rising cost of housing and our failure to build enough houses was already having an impact on living standards. And of course the post-2009 decline was the result of our poorly regulated banking sector collapsing.

Housing and banking regulation: those are difficult but fixable issues – and our failures there are no reason at all to turn our backs on globalisation, the liberalising of trade which has created so many other benefits to some of the poorest countries in the world.

Here’s an interesting stat… Among Britons who voted to leave the European Union, 61% believe that most children will be worse off than their parents. Those who voted against Brexit tend to believe the opposite. We’re liberals, which means we’re optimistic – at any rate we should be optimistic, even now – about the future.

So what we need to do is not rail against those who voted Brexit because they feel wronged by the modern world. We need to do more, much more, to fix their everyday problems. And that means pushing for both equality of opportunity and equality of outcomes.

To finish, two quick policy examples…

Equality of opportunity: ensuring kids leave school able to read and write is the basic we should expect. Of course there’s more to a well-rounded education than literacy and numeracy and 5 good GCSEs – but you try getting a decent, stable job without them!

And the reality is that by age 19, some 170,000 students — last year, this year and next year — leave compulsory education having not achieved a good standard of recognised qualifications in English and maths. That figure includes more than half of all students eligible for free school meals, those from some of the most disadvantaged backgrounds.

Of course, some will buck the trend and make great successes of their lives. But most will not. They’ll be more likely to start off NEET (not in education, employment or training), and end up in insecure, minimum wage jobs. That’s a personal tragedy for them. It’s a scandalous waste of human potential at a national level.

It’s not impossible to tackle the attainment gap at schools — there are schools up and down the country already doing it but we need to invest, as the Lib Dems successfully did with the Pupil Premium. And that’s by the way, a far better use of public money than opening up more grammar schools.

Equality of outcome: it’s estimated by the Joseph Rowntree Foundation that poverty costs the state £78 billion every year, through additional spending on healthcare, school education, justice, children’s and adults’ social services and housing, and lost tax revenue. It also leads to £70 billion of spending on social security dealing with poverty. That is more than we spend on education, and one-fifth of public service spending overall.

One of the key drivers of the expected increase in child poverty is driven by planned benefit reforms affecting families with three or more children. It’s a pretty typical Tory proposal: identify a group you can pin the blame on – the stereotypical Jeremy Kyle-esque, Shameless-style work-shy family with unruly kids – and who don’t vote for you anyway, and cut their benefits.

But, whatever you think of their lifestyle (and for many of course it was never the plan, but changed circumstances), we as a society shouldn’t punish the children for what we deem to be the mistakes of the parents. If we want to break the vicious cycle of poverty we need to ensure families have a minimum income standard, one which isn’t just about stopping them being destitute but one which gives them genuine choices over their own lives.

It’s not only the smart and right thing to do: it’s also how we build a liberal society.