The problem about relative poverty is precisely its relativity. The child poverty index, which measures whether a family’s income is below 60 per cent of the average, is a case in point; when incomes go down, bingo, so does child poverty. Which means that one sure fire if controversial way to improve the Government’s child poverty record would be to drive down everyone’s earnings. Iain Duncan Smith, Work and Pensions Secretary, made just this point yesterday when he made a speech about whether the definition should be rather wider than it is.
‘As we saw last year,’ he observed, ‘when the child poverty level dropped by two per cent – a fall in the median income may lift a family out of poverty on paper. Yet at a closer look, real incomes did not rise and absolute poverty was unchanged. For the 300,000 children no longer in poverty according to the official statistics, life was no different.’
Well, quite so. This brings us to Mr Duncan Smith’s wider point, viz, that child poverty should be measured in all manner of ways which may not be entirely income-related. Family breakdown plainly has a proven impact on a child’s wellbeing – ditto whether he has two parents around in the first place, and whether those parents work and whether they are riddled with debt. Education and decent schooling matter; so does criminality in the area where he grows up. You could of course argue that some of these quality of life elements are related to income – if you weren’t poor, you wouldn’t be living in a poor area, for instance, and you’d be less likely to fall prey to loan sharks. But in general his point holds good. The official child poverty measure is a bit of a blunt instrument, which sets an arbitrary target that can distort overall social and fiscal policy.