Britain’s impoverished children

Where do these figures come from?
The shocking figures for London come from a new report by the London Child PovertyCommission (LCPC), which found that 41 per cent of children in Greater London - and half the children in inner London - still live in what is defined as 'poverty'. This percentage hasn't altered since 2000, though it's a modest 1 per cent down on 1998 levels. Poverty is especially acute in London owing to the high cost of housing and childcare, which makes it very hard to survive on the minimum wage of £5.52 an hour. In the East End, the main problem is unemployment: in Tower Hamlets, the borough that borders the City, the unemployment rate is 14 per cent, the highest in the country. It is actually hard to believe, says the LCPC, that such poverty exists "in one of the richest cities in the world".

What about poverty in the country as a whole?
Between 1979 and 1997, levels of child poverty in Britain tripled to become the highest in the EU. And they have stayed higher, in relative terms, than in all but three of the 24 other EU countries. New Labour has spent billions on the problem, and since 1998 there has been an improvement: in that time some 600,000 British children have been taken out of poverty. But progress has stalled and recently the number of children classed as 'poor' has grown by anything from 100,000 to 200,000. The total number of children living in poverty in 2005-6 was 3.8 million - that's to say, 30 per cent of all children in Britain. By contrast in Denmark, which has the best record in the EU, just 5 per cent of children are defined as poor.

But what is the official definition of 'poverty'?
Living in a household whose income is just a fraction of the average household income. In Britain, even if you earn the median income (ie if you're at that point on the income scale where half the population earns more than you do, and half less) that doesn't exactly make you well off: in 2006 the median household income for a couple with two children was just £502 a week after tax and housing costs. But to be classed as 'poor', that couple would be living on less than 60 per cent of that (ie on less than £301 a week).

But isn't that a purely relative definition?
Yes, and as such it's subject to various anomalies: it means, for example, that if everyone's income rises but incomes in the poorer half of society rise more slowly than in the richer half, then 'poverty' would increase even though everyone had got better off. In one recent table (where poverty was defined as being below 50 per cent of median income) child poverty was recorded as higher in the US than in Hungary, even though 50 per cent of median income was $24,000 in the US and just $7,000 in Hungary.

And is it easily manipulated?
Yes. Another complication concerning the definition of poverty is the fact that household income is usually calculated after subtracting the cost of housing. As housing costs take up a disproportionate amount of what a poor family spends, this is seen as the best indicator of disposable income. Yet when Labour ministers set their targets for eradicating child poverty (to halve it by 2010 and eradicate it by 2020) they didn't specify how it would be measured. Then in 2003 they excluded housing costs from the official indicators. That decision, said a Labour-dominated select committee, effectively 'removed' 900,000 children from poverty simply by a statistical sleight of hand.

So is 'relative poverty' a statistical con?
Not really. Some definition of what it means to be poor is required, and in the UK, where the poorest often own TVs, fridges, even cars, and where they get free medical care and education and cash sums for food, clothing and transport, the notion of 'absolute poverty' - as applied in developing countries - is largely meaningless. Besides, even if the relative definition is more about inequality than poverty, it still points to acute levels of hardship. A report by the Frank Buttle Trust last year found that a quarter of Britain's poorest households couldn't afford to put a daily hot meal on the table for every family member; a third of poor parents interviewed said they didn't have enough to pay for their children's winter clothes. Relative poverty is also hugely significant because families on less than 60 per cent of the average income, even if they can meet basic needs, are effectively excluded from ordinary living patterns, customs and activities.

And what is the social impact of such exclusion?
All the evidence is that child poverty is the start of a cycle from which it's very difficult to escape. Children brought up in poor households are more likely to fail at school, more likely to end up workless when they leave school, and more likely to be caught up in antisocial behaviour and crime. And recent research shows the inter-generational 'knock-on' effect is escalating: those who grew up poor in the Eighties are suffering greater disadvantage in midlife than those who grew up poor in the Seventies.

What has been the Government's anti-poverty strategy?
The emphasis has been on a range of measures to encourage poor families into the job market by 'making work pay'. These include child and working tax credits, higher child benefit and welfare-to-work programmes. The trouble is that this has little impact on the poverty figures if, as is usually the case, the income thus earned from low-paid work remains below 60 per cent of the median income. A recent report by the IPPR shows that almost 1.5 million children are living in poverty despite having a working parent. And since the benefits and tax credits on which the poor, at least in part, depend are linked to inflation, not to average earnings (which grow faster than prices), the proportion of children living below the poverty line is likely to rise: according to the Joseph Rowntree Foundation, it will rise to 39 per cent over the next 20 years.

Is there a realistic solution to all this?
Campaigners argue that alongside the programme of income redistribution through tax credits and benefits pursued by Labour, there needs to be a concerted effort to tackle low pay in the public sector (schools, hospitals, local government and the other public services are the biggest direct employers of low-paid workers aged over 25). This might involve significantly increasing the minimum wage and abolishing contracting out - measures that would have huge implications for overall public spending and would be bitterly opposed by employers. On the social side, a key driver of child poverty in the UK is the high proportion of children (second only to Sweden in the EU) living in lone parent families - a percentage which continues to rise. Many of these parents have low or no qualifications, so campaigners also call for billions to be invested in better education and training for such people, and for improved childcare. Given the scale of the challenge there are some, not all Tory, who wonder if liberal societies can ever intervene drastically enough to eradicate the problem. ·