Published and promoted by Paul Mercer, 58A Wards End, Loughborough LE11 3HB This site only uses cookies in order to collect anonymous usage data for Google Analytics and StatCounter. By using this site we assume that you are happy to receive cookies.
According to Labour’s new parliamentary candidate for Loughborough, Radcliffe-on- Trent-based lawyer Stuart Brady: “4.1 million children in poverty in the world’s 5th largest economy. A stat that speak for itself. Many [sic] down to benefit changes.” The implication of this statement is that changes to the benefit system implemented by the Government are leading to ‘child poverty’. A closer look at the way in which these statistics are compiled suggest that this is not the case. Government statistics indicate that child poverty in the UK has increased over the past three years. According to household data published in 2017 by the government, about four million, or 30%, of children are now classed as ‘poor’. The problem is that this is not a measure of poverty but of relative poverty – in other words a measure of inequality. According to the Institute for Fiscal Studies (IFS) income for working-age adults is no higher than it was eight years ago and both inequality and poverty remain slightly lower than before the financial crisis. Child poverty is defined as children living where household income is below 60% of the median, measured after housing costs and adjusted for household size. This means that as the country goes into a recession, and inequality drops, then so will poverty because capital incomes and profits fall fastest and further. It also means that as the recession recedes, and capital incomes grow, then inequality increases. The statistics reveal that child poverty amongst single parents grows quicker. This is again because of the way in which the statistics are collated since it is measuring household income: one working adult rather than two is likely to bring in less income. It is also the case, therefore, that if the number of single-parent households increases then, according to this definition, the level of child poverty will also increase because it is measured against median household income. Brady’s criticism of the Government ignores the fact that the latest statistics suggest that UK poverty levels did not fall over the past year despite the benefits freeze with the proportion of people living in poverty (according to these definitions) remaining stable at 22%. Likewise, the official statistics recording absolute poverty in the UK indicate that it was falling steadily from over 40% in 1994-95. Labour came to power in 1997 and this trend continued until 2002-03 when it levelled off at just over 20%. Eight more years of Labour government had no noticeable impact on the level of poverty in UK. It has only been under the Conservatives, in 2016-17 that it finally dropped to below 20%. The latest figures published by the Department for Work and Pensions (DWP) on 22 March are significant because they reflect what has happened during this four-year benefit freeze. The evidence suggests that the Government’s success in boosting employment has led to an improvement in income for poor households even though benefit payments have not kept pace with inflation. “2016-17 was a relatively positive year in terms of the UK labour market, with earnings and employment both growing,” the DWP noted. “Inflation was low with [consumer price inflation] around one per cent on average. These are likely to be the main factors behind the income growth in 2016/17.” Median household income, after taxes and benefits and adjusted to account for differences in household composition, rose 1.9 per cent above inflation in 2016-17 and has now reached £25,700 a year for a couple with no children. This is the fifth consecutive year of growth in median income. For low and high-income families, income growth was slower, with average incomes for the poorest fifth and richest fifth of households growing by one per cent, leaving measures of income inequality little changed from a year earlier. As one would expect, immediately after the financial crisis, child poverty dropped, to 27%, but as income rose it increased to 30% and has remained constant over the past year. Therefore, contrary to what Brady suggests, there is no evidence that the freeze on working-age benefits in 2016-17, has led to an increase in child poverty.
Published and promoted by Paul Mercer, 58A Wards End, Loughborough LE11 3HB
This site only uses cookies in order to collect anonymous usage data for Google Analytics and StatCounter. By using this site we assume that you are happy to receive cookies.
According to Labour’s new parliamentary candidate for Loughborough, Radcliffe-on-Trent-based lawyer Stuart Brady: “4.1 million children in poverty in the world’s 5th largest economy. A stat that speak for itself. Many [sic] down to benefit changes.” The implication of this statement is that changes to the benefit system implemented by the Government are leading to ‘child poverty’. A closer look at the way in which these statistics are compiled suggest that this is not the case. Government statistics indicate that child poverty in the UK has increased over the past three years. According to household data published in 2017 by the government, about four million, or 30%, of children are now classed as ‘poor’. The problem is that this is not a measure of poverty but of relative poverty – in other words a measure of inequality. According to the Institute for Fiscal Studies (IFS) income for working-age adults is no higher than it was eight years ago and both inequality and poverty remain slightly lower than before the financial crisis. Child poverty is defined as children living where household income is below 60% of the median, measured after housing costs and adjusted for household size. This means that as the country goes into a recession, and inequality drops, then so will poverty because capital incomes and profits fall fastest and further. It also means that as the recession recedes, and capital incomes grow, then inequality increases. The statistics reveal that child poverty amongst single parents grows quicker. This is again because of the way in which the statistics are collated since it is measuring household income: one working adult rather than two is likely to bring in less income. It is also the case, therefore, that if the number of single-parent households increases then, according to this definition, the level of child poverty will also increase because it is measured against median household income. Brady’s criticism of the Government ignores the fact that the latest statistics suggest that UK poverty levels did not fall over the past year despite the benefits freeze with the proportion of people living in poverty (according to these definitions) remaining stable at 22%. Likewise, the official statistics recording absolute poverty in the UK indicate that it was falling steadily from over 40% in 1994-95. Labour came to power in 1997 and this trend continued until 2002-03 when it levelled off at just over 20%. Eight more years of Labour government had no noticeable impact on the level of poverty in UK. It has only been under the Conservatives, in 2016-17 that it finally dropped to below 20%. The latest figures published by the Department for Work and Pensions (DWP) on 22 March are significant because they reflect what has happened during this four-year benefit freeze. The evidence suggests that the Government’s success in boosting employment has led to an improvement in income for poor households even though benefit payments have not kept pace with inflation. “2016-17 was a relatively positive year in terms of the UK labour market, with earnings and employment both growing,” the DWP noted. “Inflation was low with [consumer price inflation] around one per cent on average. These are likely to be the main factors behind the income growth in 2016/17.” Median household income, after taxes and benefits and adjusted to account for differences in household composition, rose 1.9 per cent above inflation in 2016-17 and has now reached £25,700 a year for a couple with no children. This is the fifth consecutive year of growth in median income. For low and high- income families, income growth was slower, with average incomes for the poorest fifth and richest fifth of households growing by one per cent, leaving measures of income inequality little changed from a year earlier. As one would expect, immediately after the financial crisis, child poverty dropped, to 27%, but as income rose it increased to 30% and has remained constant over the past year. Therefore, contrary to what Brady suggests, there is no evidence that the freeze on working-age benefits in 2016-17, has led to an increase in child poverty.