Over four million children in the UK are now growing up in poverty, two thirds of which come from working families. The shocking figures, published this week by the End Child Poverty Coalition, also revealed that over half of children are living in poverty in certain areas of the UK. To understand why this is happening and what we can do about it, we need to look at the labour market and our social security system.
Newly released labour market statistics show that wages are continually failing to keep pace with inflation. Food prices in December were up four per cent from the year before, and families on low incomes tend to spend a higher proportion of their wages on basic items like food and rent.
The mantra that hard work is the route out of poverty needs close scrutiny, as evidenced by the fact that eighty per cent of people currently working low paid jobs will still be earning a low wage come 2028. Regional and gender pay gaps, as well as the reduced salaries and employment opportunities for disabled people and members of Black, Asian and minority ethnic communities, illustrate the dysfunctional realities of our labour market.
Yet social security support for low income families has been severely cut, particularly hitting groups including single parents. Meanwhile most working–age benefits, including child benefit, have been frozen until 2020; and Universal Credit, the government’s flagship programme, has been shown to be failing those on low incomes – causing debt and rent arrears.
When the introduction of Universal Credit was first announced back in 2011, the Coalition government claimed it woulf lift 350,000 children out of poverty. By 2013, that same estimate had been drastically reduced to just 150,000. By 2016, the government refused to offer any further re-evaluation at all – hardly surprising given the new figures from the End Child Poverty Coalition.
The Conservative leadership may be unwilling to release statistics, but an analysis from the Child Poverty Action Group published last November estimated that the cuts to Universal Credit will push one million more children into poverty by 2020, along with an extra 900,000 adults.
Disabled children are likely the worst affected, with four in ten living in poverty due to the extra costs incurred by their families as a result of their disability. Yet the basic level of support for disabled children in Universal Credit is less than half that available in Child Tax Credits.
One such change likely to have a huge impact is the so-called ‘two-child policy’, under which Child Tax Credits, or their equivalent in Universal Credit, are restricted to the first two children, while the higher rate for the first child is removed for new claims. It’s thought that these measures alone will be responsible for pushing an additional 200,000 children into poverty by 2020.
People in employment should always be better off financially, but the incentive for people to start work has been undermined by 2015 government cuts to the Work Allowances in Universal Credit – the amount that an individual can earn before their UC starts to be reduced. CPAG estimates that this move will result in a further 200,000 children growing up in poverty.
What’s more, Gingerbread, a charity supporting lone parents, has found that very few part-time or flexible jobs were advertised on the government’s own Universal Jobmatch website, for which all jobseekers have to register. Often, those that were advertised were not within reasonable travelling distance for somebody who has sole responsibility for their children’s care.
Since last April, parents have been required to start looking for work as soon as their youngest child turns three-years-old. However, a report from Save the Children this week found that 450,000 mothers of children under five are being prevented from returning to work or increasing their hours because childcare is simply unaffordable and any financial help available from government is complex and difficult to access.
Unlike Tax Credits, under which childcare costs can be claimed for in advance, Universal Credit childcare requires costs to be paid upfront by the parents and then claimed back at a later date, which is always likely to be a problem for low income families. Citizens Advice has also pointed to the system’s practical problems, with the online procedure sometimes refusing to accept receipts or backdate payments if they are submitted late. All of these issues can result in children losing their childcare place, because the provider has lost patience with unpaid bills. This in turn can cause parents to put their jobs at risk as they are forced to take unpaid leave to look after their children themselves.
As the cuts to Universal Credit are increasingly rolled out, the numbers of children living in poverty will rise. Labour has stated clearly that the move should be paused, to allow flaws in both the design and delivery of the system to be resolved.
But Universal Credit is not solely to blame. Other measures put in place by the government’s 2016 Welfare Act are also having a major impact on child poverty, with a recent study from the Institute for Fiscal Studies showing that a quarter of Britain’s poorest households are falling behind with debt payments or spending over 25 per cent of their monthly income on repayments.
Take, for example, the introduction of a new, lower household benefit cap, which the High Court last June ruled to be discriminatory against lone parents with young children. Labour opposed this when it was first mooted; we believed the risks to poverty and potential homelessness were too great. The latest government statistics have shown that 53,000 households, equivalent to 77 per cent of the total number of capped households, would not have been affected if the boundaries had not been reduced.
Currently, families living in poverty can access much needed support through the provision of free school meals. However, a recent government consultation has proposed a change to the policy which would render children ineligible for the free lunches if their family earns more than £7,400, a move which would exclude one million children in poverty, according to research by the Children’s Society. Labour has called for all secondary school-aged children from a family receiving Universal Credit to qualify for free school meals, in addition to our commitment to deliver free school meals for all primary school children.
The consequences of growing up in poverty are well documented: hunger and poor housing both have a serious impact on a child’s health and well-being, as well as their ability to learn. This can affect their health and employment prospects in adulthood.
The government is failing in its duty of care to our children. It is vital that we tackle child poverty, for the sake of the children affected themselves, their families and wider society. Labour’s plans will support everyone to reach their full potential so that no one is left behind.
Margaret Greenwood is the Shadow Employment and Inequalities Minister and Labour MP for Wirral West.
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