As the economic repercussions of COVID-19 begin to manifest in increased unemployment and redundancies, remember that it was not this virus that planted the seeds of worsening child poverty. Between 1999 and 2010, the UK’s child poverty rates were in decline, but since 2010 almost all progress made in reducing poverty in the previous decade has since been undone. COVID-19 didn’t start this, the coalition government did.
The UK government classifies a child as ‘in poverty’ if they live in a household that earns below 60 per cent of the UK’s median income when adjusted for family size. This is the definition of relative poverty, but absolute poverty is when a household’s income is less than 60 per cent of the median income as it stood in 2011, when adjusted for inflation. Regardless of the measure that you use, child poverty have seen an increase since 2010. In 2019, 4.2 million children were living in poverty, that is 30 per cent of the UK’s child population.
This has not always been the case. The election of New Labour resulted in marked decreases in child poverty. Between 1998 and 2003, 600,000 children were taken out of child poverty. New Labour’s reforms resulted in an £18 billion annual increase in spending on benefits for families with children. From the introduction of a national minimum wage, the New Deal for Communities in supporting employment for lone parents, and the creation of Sure Start. While New Labour’s policy had some flaws, such as unreliable incentives to work as well as the complexity and bureaucracy of different means tests, at least there was an effective strategy for lifting children out of poverty.
The election of the coalition government brought around a clear redirection in policy with the introduction of austerity. £21 billion worth of welfare cuts, including cuts to tax credits and benefits, alongside the arrival of a benefit cap and bedroom tax, resulted in less support for families with children. Sure Start was also left unprotected against cuts, despite numerous studies showing improved physical health outcomes for children, less problematic behaviour due to more effective parenting skills and an overall benefit to government through lower healthcare expenditure and lower service delivery costs.
The Director of the Centre for Research in Social Policy, Donal Hirsch, had estimated in 2013 that child poverty costs the UK £29 billion alone each year. The largest part of the cost is £15 billion spent towards rectifying the consequences of child poverty such as the pupil premium to ensure extra support in schools and criminal justice costs. He had estimated that if child poverty were to rise to 3.4 million by 2020 it would cost the UK £35 billion, or 3 per cent of its GDP. Even with no update on this research, as the latest child poverty figures stand at 4.2 million, it is safe to say that we are losing more than £35 billion each year to child poverty.
For a party that has branded itself as the party which is most capable of providing a strong economy, the Conservatives have woefully failed in achieving medium to long term cost savings as a result of child poverty. Its failure to deal with the issue is not accidental. After the 2015 election, the newly elected majority Conservative government voted for further Tax Credit cuts, despite assurances in the election campaign to protect Tax Credits from welfare cuts. Thankfully the House of Lords delayed the cuts, but the failure to recognise child poverty and its consequences still exist inside the Tory party.
Only this summer, Boris Johnson rejected pleas for £15-a-week food vouchers to be given to children receiving free school meals to support them outside of term time. Thanks to a 22-year-old football player, Marcus Rashford, the government made a U-turn on the policy. Almost three months later it was Marcus Rashford again who had to confront Conservative MP for Thirsk and Malton about his tweet stating “it’s a parent job to feed their children”. It is disturbing that this view still exists when we know that 72 per cent of children growing up in poverty live in a household where at least one person works. For a Conservative Party that smashed “the red wall” and now represents historically Labour seats with higher levels of deprivation, the continued refusal to confront child poverty is simply astonishing.
The furlough scheme alongside support for the self-employed has provided some basic support for some working families during the COVID-19 lockdown. Similarly, the reforms to Universal Credit to simplify a complex network of applications provides a better foundation for a welfare system. But this is simply not enough – the meagre support that families have received through Universal Credit, coupled with having to live on 80 per cent of their income which barely covers bills, has led to a dramatic increase in foodbank usage and child malnutrition.
So where do we go from here? Short term action in the face of COVID-19 is of the utmost priority. The Joseph Roundtree Foundation and Save the Children have urged the government to increase the child element of Universal Credit and Child Tax Credit by £20 to ensure that another generation of children do not find themselves falling further into poverty. Considering that the Treasury was so eager to cover a maximum of £10 per meal over August – which has so far cost the taxpayer £522m – it should be a no-brainer to support families with children already under or about to fall under the poverty line.
In the long term, permanent reforms must be made to Universal Credit and the welfare system. The Child Poverty Action Group recommends to protect most children from poverty, the two-child limit on Universal Credit should be scrapped. For £1.7 billion, it would remove 300,000 children out of poverty. Yet if we were to adopt the full package of reforms as advocated by the Child Poverty Action Group, it would take 1.2 million children out of relative poverty at a cost of £20.8 billion. These reforms include removing the two-child limit, benefit cap, restoring universal credit payments to 2013/14 levels, and adding £5 per week to child benefit. £20.8 billion sounds like a huge cost – but compared to the £35 billion being lost annually to the expenses of mitigating child poverty, the taxpayer will in fact be better off.
It is depressing that there is still a refusal to accept and deal with child poverty in today’s governing party. It is even more depressing that the argument to feed and support our children has to be made on the grounds of economic cost in the hope of it standing a chance. As we face the possibility of a second wave of COVID-19 infections, and calls are made for a renewed Eat Out to Help Out scheme, the government must support our working families that are struggling to make ends meet. The government must pay-out to help out.