Graham Whitham is UK Poverty Policy Advisor for Save the Children. He leads on their work on family incomes, including work on welfare reform, work incentives and child poverty measurement.

Save the Children’s work has shown that children are all too aware, despite the best efforts of parents, of poverty and the impact it has on their families. Our September report, It Shouldn’t Happen Here, shows that too often the burden of getting by on a low income is putting enormous emotional strain on children. Over half of children in poverty told us that that not having enough money makes their parents unhappy and more than 4 in 10 children in poverty know that their parents are cutting back on things for themselves, such as food.

Instead of concentrating on their homework or playing out with friends, children in poverty are worried whether their parents can afford to put some extra money on the energy meter. How can any child fulfil their potential in such circumstances? Regardless of political persuasion, no politician wants one group of society cut off from the rest, cast adrift from the mainstream. That’s why all the major political parties supported the Child Poverty Act.

That’s also why the relative income measure of child poverty is so important, as David Cameron rightly said after becoming Conservative Party leader: “We need to think of poverty in relative terms – the fact that some people lack those things which others in society take for granted”. The relative poverty measure tells us how many children are living in families significantly worse off than those on middle incomes.

The high correlation between relative poverty and material deprivation (material deprivation of children below the poverty line is 3.5 times higher on average across the EU than for those children above the poverty threshold), relative poverty and poor outcomes for children means that the relative income measure also gives us a strong sense of how many children are likely to be feeling the negative effects of poverty.

The recent government consultation on child poverty measurement criticises the relative income measure, pointing out that child poverty fell in 2010/11 because middle incomes fell (median income fell faster than incomes at the bottom). That’s why we need other income measures of poverty, including the other measures in the Child Poverty Act, to act as a check when this happens. However, it is highly unusual for median incomes to fall. Middle incomes tend to go up and using the relative measure allows us to identify how many low income families are experiencing rising incomes at the same time. 

It is much more important to look at long-term trends. What was happening to child poverty before 2010? Absolute child poverty fell from 3.4million to 1.4million between 1999 and 2010 (relative child poverty fell by around 1 million over the same period) and material deprivation amongst children fell by 300,000 between 2005 and 2010. 

These successes were largely driven by rising employment rates amongst single parents, targeted support for families with children, extra support towards childcare costs and increased in-work subsidy through tax credits. The last point is key. Increased spending on subsidising low-pay amongst those working 16 hours or more a week accounted for 80% of the increase in spending on tax credits between 2004/05 and 2010/11. Despite this, the number of children in poverty in working households continued to go up and accounts for 60% of those below the poverty line. This shows that when it comes to work as a route out of poverty it is the state doing the heavy lifting. 

With 5 million people being paid less than the living wage, a record number of people working part-time who want to be working full-time (full-time work reduces the risk of poverty substantially) and a labour market that often fails to support in-work progression, it’s crucial we look at how we can reshape the labour market and support employers to make work a more effective route out of poverty.

We know that even in tough times things can be done to help us tackle poverty. Universal Credit, the government’s new welfare system is expected to lift 350,000 children out of poverty (even if other social security reforms mean absolute and relative child poverty will increase) and adoption of the living wage by employers can help lift families out of poverty whilst also easing the burden on in-work tax credits. 

We know that other things can happen to improve experiences and outcomes for children. Good schools and decent housing are vital if we want children to be happy and to realise their potential. That’s why it’s sensible for the government to recognise the broad nature of poverty in its 2011 Child Poverty Strategy and recent consultation paper on child poverty measurement. On the latter, the government wants to reflect that broad nature by developing a ‘multi-dimensional’ composite measure of child poverty that captures data across a range of outcomes and experiences. 

However, development of this measure mustn’t be at the expense of the existing measures in the Child Poverty Act. They may not be perfect but those measures are the best we’ve got. They get to the heart of the experience of poverty - lack of money. It is the inability to afford, not just the things needed to have a happy and fulfilled childhood, but increasingly essentials, that is central to the experience of poverty and tackling this must remain a key focus for policy makers. 

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