Open Seminar
Tackling Child Poverty: Lessons from the UK andNew Frontiers in Japan
Doshisha University
Kyoto
January 9 2012

Until 1945 financial needs of children notrecognised by the state – poor law, UAB,
fostering or adoption
Eleanor Rathbone’s campaign for family
allowances – motives: Poverty - Rowntree
 Gender equity – feckless men
 Pronatalism – eugenics movement

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Family allowances opposed by Trade
Unions who campaigned for a “family wage”
Adopted by Beveridge in 1942 report inorder to ensure that UB could be paid atsubsistence level w/o undermining work
incentives
Enacted by Conservative Government (tohold wage demands down) but Only for second and subsequent child At lower rates than Beveridge proposed
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Free school meals
Maternity grants
Welfare foods
Child additions in the benefit scales
Free health careChild tax allowances
Character universality

Family allowances too low
National assistance covering housing costs – nohelp for housing costs in work – wages trap led toHousing benefit and Council Tax benefit
Health charges and exemptions introduced
Character became means-tested
Meanwhile Child Tax Allowances

costing the exchequer more than FA
Of most value to higher rate tax payers
No help to poorest non tax payers

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Poor and the Poorest 1965
Circumstances of Children 1966
Child Poverty Action Group established1968
1970 election “Poor worse off under Labour”
Tories win - Family Income Supplement
introduced
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Income tested benefit
Working 24 plus hours
Based on five weeks pay slips
Paid to mother
Lasted six months regardless of income changes
Same threshold for lone parents and couples
Take up a problem and created a poverty trap
Became Family Credit - a means-tested in-work
benefit until replaced in 1999 by WFTC

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Introduced after bitter Cabinet battle
between Barbara Castle and Dennis Healey
exposed by “deep throat”.
Combines CTA and FA in one cash benefit
One parent benefit
Paid for every child, at a higher rate for the
first child £20.30, £13.40 (April 2011)
To the mother transfer wallet to handbag.

Against Duchess ofWestminster gets it (ordid)
 Very expensive Could be bettertargeted – large
families, young kids,taxed back, withdrawn
 Children private
responsibility
 Encourages fecklessbreeding
 Misspent - vouchersbetter

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For
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Maintains horizontal
equityChildren are a public
good/human capital
Why should parents
carry the burden alone
Encourages childbirthBenefit for womenContribution to work
incentives
Secure source ofincome at transitionChild benefit left to “wither on the vine”
Benefits for 16-18 year olds abolished
Income Support frozen
Surges in youth unemployment and childrenliving in workless households
Family Credit replaces FIS –16 hours
One parent benefit and lone parent premium in
Income Support abolished

Between 1979 and 1997 the relative childpoverty rate in Britain increased 3 foldMoral arguments – religious duty
Justice arguments – it is not fair, children notto blame
Poor investment – poor outcomes - waste oftalent
Poverty associated with many social problems
that harm us all
Costs a lot – losing 1% of GDP per yearKey indicator of government failure19/3/4/5/692939495519/2

91

1019/115

19

1990/90/9

87

86

85

84

83

82

81

80

79

88
89
19

19

19

19

19

1919191919

1919% poverty rate
40

3530

2520

Before Housing
Costs
After Housing
Costs

0
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Between 1979 and 1997 child poverty in
Britain increased 3 times
Bigger increase than most industrial
societies

Between 1979 and 1997 child poverty in
Britain increased 3 times
Bigger increase than most industrial societies
In 1995 UK has the highest child poverty
rate in the EU.

Po UKrtuga
Ire llandSpain
G I ta lyerman
G yree
B ce
Lu e lgxe ium mbour
Fr gancA eustr
Fi Den ianlan markSw de d (1 9en 97(1 )997)Child poverty rate
3025Euro-mean

20

15

10

50
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Between 1979 and 1997 child poverty in Britain
increased 3 times
Bigger increase than most industrial societies
UK in 2001 has the fifth highest child poverty ratecomparatively
Evidence suggests that this was driven by
economics and demographics, but particularly
by policy failurePrime Minister’s pledge:“Our historic aim, that ours is the first generation
to end child poverty forever….It’s a 20 year
mission but I believe it can be done”

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(Before the recession) employment at record
levelsChild poverty rate fell until 2004/5 – nearly met
five year target
Child poverty gap reduced
UK one of only seven countries in OECD tohave reduction in child poverty 1995-2005
UK moved up the international league table
All party consensus in Child Poverty Act –sensible targets and new commitment todevelop a strategy
Here is some dataManage economy to ensure low
inflation and high employment
 Welfare to work Increases in in-work benefits
 Increases in out-of-work Big invest in services - health,education childcare Institutional transformation

Tax breaks towards families

Services

Cash

4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0

OECD-33 average =2.2%

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Child benefit/Tax credit paid to parents until
19 if child in full-time education
Severe hardship payments in JSA IS.
No independent entitlement to unemployedyouth until 19 then IS/JSA £51.85 per weekuntil 24.
EMA for 16-18 £30 per week to young
people plus bonuses payments of up to£500 for staying on. Now abolished

Poverty was dire after the Tory years.
After a slow start much was being achieved.
Treatment right - dose inadequate

400
Poverty threshold
350

300

250

200

150

100

50

00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45

Hours per week on minimum wage (£5.73 per hour)Child benefit

Child tax credit

net earnings

Income support

Working tax credit

Housing benefit

Council tax benefit

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Relative low income = Equivalised net householdincome less than 60% median 2020 target: <10% ofchildren
Combined low income and material deprivation =Material deprivation >20% and equivalised net
household income less than 70% median 2020 target:<5% of children‘Absolute’ low income= Equivalised net householdincome falling below 60% of the ‘adjusted baseamount’ 2020 target: <5% of children
Persistent poverty= Equivalised net household income
less than 60% of median for 3 years prior to currentyear 2020 target: not yet set
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Plan to cut £80 billion deficit by 2013
25% from increases in taxes
75% from cuts in services and huge reduction
in public employment
Whole package highly regressiveChildren have done much worse thanpensioners
IFS say it will increase child poverty
Unemployment up – youth at record levels
Discourse has become behavioural
Focus on early years

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Child benefits frozen for three years
To be taken back from higher rate tax payers after2013
EMA abolished
Health in Pregnancy Grant and child trust funds
abolished
Cuts in childcare tax credits 80% to 70% subsidy
and Surestart maternity grant restricted to one
childCuts in Child tax credits – reneges on promise forabove inflation uprating
Uprate benefits by CPI rather than RPI
Increase VAT from 17.5% to 20%

Relative child poverty will remain broadly
constant between 2009/10 and 2012/13 atabout 19% but will then rise to 24.4% by 2020.
Absolute child poverty will rise from 17% in2009 to 23.2% in 2013 and then remain
constant to 2020.
This unusual picture comes about because
real median household income will be 7%
lower in 2012/13 than it was in 2009/10 andremain below its 2009/10 level until 2015/16,
due to high inflation and low earnings growth.

UNIVERSAL CREDIT replacing all working
age benefits in 2013. Good idea but
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Not universal
Means-tested
Leaves out passported benefits
Reliant on massive ITBenefits cap
Housing benefit room cap for tenants

Reassessment of Incapacity to work
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Unemployment rising - very high for youth
Growth effectively nil
Private jobs not replacing public jobs
Deficit targets not being met
EU crisis
Double dip recession

Role of state in supporting financial costs ofchildren contested
Has been and still is mainly a private
responsibility – increasingly for youth
Improvements have been made since 1999 –thanks to the child poverty agendaChild Poverty Act high watermark
Now going backwards

But still much more effort than Japan?

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