More Labour Lies on Child Poverty – This Time from a Tory Government

 

Image by GlacierTim via Flickr

Message to Mr Milburn: This is Called Poverty

Alan Milburn was talking about child poverty on the radio this morning. He said that the government’s targets on reducing child poverty will not be met.

The target in question was adopted by the last government. When Mr Cameron and the Tories came into power, they kept the target.

For good measure, Mr Cameron appointed former Labour Minister Mr Milburn to oversee progress. Since Mr Milburn is a Labour politician, it is not particularly surprising to find him criticising the Tories for not helping the poor.

What is surprising is that he was appointed at all by Mr Cameron. It was one of those tactical errors to which Mr Cameron seems to be awfully prone – he thought that bringing Mr Milburn on board would neuter his opposition to the government. He seems to have forgotten that in his new position, Mr Milburn would actually be given a platform and more credibility for his criticisms.

We need to really understand what we are talking about here.

The target in question is that child poverty should be eliminated by 2020.

On the radio this morning the BBC presenter explained that the target was based on “relative poverty”. He claimed it meant people being much less well off than their peers, such that they were not starving, but they did not have enough money to play a full part in society.

That was particularly disingenuous nonsense from the BBC.

The government’s definition of poverty is having a household income less than 60% of the median. For a couple with two children, the latest figures show a median income of £631 per week. The “poverty line” is therefore 60% of that, or £379 per week (2009/10 figures). In terms of income per year, the poverty line for that family is £19,708 per year.

Note that these figures are for “net disposable income”. In other words, they are figures after tax, but including benefits received. That couple with two children would be receiving child benefit of around £25 per week, and also tax credits.

Now let’s imagine a household with two children, in which one of the adults has a job, and earns just enough to put him or her into the higher rate (40%) income tax bracket. That would mean a salary of £43,875, or £844 per week. (I couldn’t find the rates and thresholds for 2009/10 so have used the ones for 2010/11. The outcome won’t be exact, but it will give you the general idea.)

That earner would be paying £7,480 in income tax and a further £4,198 in national insurance, leaving an income of £32,197. The family would receive no tax credits, due to their income, but would receive £23 a week in child benefit, or £1,196 per year.

That family’s total net income would be £33,393 per year, or £642 per week. 60% of that is £385 per week. Remember that “poverty line” of £379 per week? That was defined as 60% of median income. But that family, with one earner nudging the 40% tax bracket, is at almost exactly the median income!

If you have two kids and only one of you is working, you need to earn two thirds of the higher rate tax bracket in order to avoid “poverty”.

What was that the BBC guy was saying? Poverty means not being able to take part in society because you don’t have enough money? What was he smoking?

There’s more, I’m afraid. That target was to eliminate child poverty by 2020. “Eliminate”, note, not even just “reduce”. That means, effectively, giving enough benefits to people out of work to take their income up to nearly two thirds of the 40% tax bracket.

But it’s even worse than that. If you did give those benefits, the median household income would magically rise, moving the target further out of reach and forcing even higher benefits.

Alternatively, of course, you could reduce the incomes of better off people by increased taxes, bringing down the median. This is indeed what the government is doing. That strategy means that you are reducing child poverty by making better off people poorer, without helping “the poor” at all.

These targets are absolute junk. As such, they are fully worthy of a New Labour clone like Mr Milburn, and indeed of the Tory Prime Minister who appointed him. A plague on all of them, and on their mates in the BBC.

IFS Shouldn’t Really be Into Propaganda

The BBC reports a new study by the Intitute for Fiscal Studies that shows that “the UK is seeing a big rise in poverty”.

The article (and the study) says that

The IFS forecasts two years “dominated by a large decline” in incomes, pushing 600,000 more children into poverty,

By 2013 there will be 3.1 million children in poverty in the UK, according to the IFS projections.

Sounds pretty awful, doesn’t it?

But of course we have to ask what they mean by “poverty”. The government usually talks about “relative poverty” – i.e. a proportion of average income – to define the poverty level. People often criticise that approach because being “poor” by that definiiton does not necessarily mean you don’t have enough to live on.

This time it’s different. This study talks about “absolute poverty”. Wow! 600,000 more children in “absolute poverty”. Are we about to see kids going to school without shoes, or sawdust on the floor?

Actually no, because it is not different this time. They have just blithely redefined “absolute poverty” to mean 60% of median income. Nearly two thirds, in other words.

According to this study, if your income is less than about two thirds of the average, then you are living in “absolute poverty”.

All this would be funny if it did not have a serious side. This is basically a deliberate misuse of language to mislead people. It is, in other words, propaganda.

The report was paid for by the Joseph Rowntree Foundation which

seeks to understand the root causes of social problems, to identify ways of overcoming them, and to show how social needs can be met in practice.

We are sadly used to “charities” that are really pressure groups.

But the report was carried out by the Insitute for Fiscal Studies, which ought to know better.

Let Them Eat Cake – Or Hair Conditioner

Image by Getty Images via @daylife

Fighting for Those Without Hair Conditioner

The BBC has a rather strange article today, about families struggling to make ends meet.

It starts with:

Some working families are struggling to feed themselves, because they have next to no cash left after paying household bills.

I am sure that is true, and have every sympathy with those families. The strangeness of the article is not in that sentiment, but in the family that they chose for their example.

Eighteen months ago, Jenni Ruegg did not think twice about filling up two trolleys with groceries at the supermarket.

But recently she could not send her children to school, because she did not have any food to put in their lunch boxes.

“I try to keep my husband well fed. I will have less. I’ve been hungry, I’ve gone to bed crying because I’ve been hungry. There are bad weeks and good weeks, but I just keep going.”

Sounds pretty grim. The accompanying picture, which shows a grinning and happy Mrs Ruegg jars a little, but maybe they caught her on a good day.

What has caused that turn around from two trolleys a week at the supermarket to empty lunchboxes?

Jenni and her husband have seven children. Jenni works as a school dinner lady, and she and her husband both do cleaning work at night. (I have in fact verified that – she works as a cleaner in a local veterinary surgery.) The cleaning work has dropped by more than half, the article says, as companies cut back, while the bills they have to pay have risen.

Mrs Ruegg really seems like quite a character.

Everything’s gone up, but our incomes haven’t. I just don’t understand the logic.

she says. Er…quite. I can understand her being upset or even angry about that, but I am not sure why she thinks there is an issue of logic here.

What about that “our incomes haven’t [gone up]“? The BBC was claiming their income from cleaning had dropped by more than half. If your income had dropped by more than half, would you say, “Everything’s gone up, but our incomes haven’t”? Or would you say something like, “Our income has dropped massively and we just can’t afford to buy what we need any more”?

There’s more. The highlighted quote from Mrs Ruegg is:

The boys just have to have shampoo. I make sure the girls get what they need with conditioner and I have what’s left. If I have to have Fairy Liquid then so be it.

She’s buying hair conditioner for her girls, but doesn’t have enough money to put food in their lunchboxes. And unless she is buying Gucci shampoo or something, Fairy Liquid costs more than shampoo does.

The article quotes their 11 year old son thus:

“We do struggle for food, don’t we Mum?” he said.

“It’s such a shame when you’re working so hard. But my mum’s probably the best mum anyone can ever dream of. She’s a supermum, aren’t you Mum?”

“We do struggle for food”. “It’s such a shame when you’re working so hard”. Those don’t sound to me like the words of an 11 year old. They sound to me like the words of a BBC journalist. But then I’m cynical.

So there you have it. Families in Britain are struggling for food and even hair conditioner. It would take a heart of stone not to laugh.

More seriously, the whole article simply does not ring true. I do hope the BBC did not completely make it up, because if they did, it is a pretty big insult to those families who really are struggling to survive in our country.

House Price Confusion at the Telegraph

Don’t Worry, Dear, the Value of Your House is Rising

There seems to be some confusion in the Telegraph today about house prices.

The article starts promisingly, with the headline:

How house prices and debts are building ugly tensions between parents and their children.

It describes the sadness of today’s situation, where the ageing baby boomers are sitting on houses they bought decades ago at low prices, while their children can’t afford to buy their first home.

And then it tells us:

First, and most encouragingly for those of us of a certain age who bought our homes more than a couple of decades ago, there is research based on Land Registry and Office for National Statistics figures which shows that Britain’s pensioners own property worth an eye-stretching total of £775bn. Better still, despite the recent mortgage famine causing prices to fall at the first-time buyer end of the housing market, pensioners – who tend to own their homes outright – continued to enjoy property price rises in most regions of the country.

As a result, according to Key Retirement Solutions, homeowners aged over 65 saw their wealth in bricks and mortar rise by an average of more than £1,700 during the last three months alone…

All this makes a refreshing change from another report, this time from the insurance giant Aviva, which paints a familiar picture of pensioner poverty. It claims the average income for people aged over 55 is just £1,313 a month – much lower than national average earnings.

Note the confusion here:

1. House prices rises are causing misery
2. House price rises are encouraging
3. Pensioners are getting wealthier because of house price rises
4. Many pensioners are in poverty

Did you spot that propositions 2 and 3 are utter nonsense?

For the second time this week, sheesh.

The Progressive Majority

We are told that Labour figures are suggesting that there is a “progressive” majority in Britain, and that this means the natural government is a Labour-Liberal Democrat coalition.

After the wasted Labour years, in which the economy and government finances have been wrecked, and inequality has increased in Britain, that’s a bit rich.

But they’re right about one thing. There is a progressive majority in Britain. And that’s why the Tories are going to win on Thursday.

UKIP Throws Down the Gauntlet to the Tories on Welfare Reform

UKIP’s Welfare Proposals will attract many – if UKIP can get them across to the public

UKIP have launched their Welfare Policy.

The document makes extremely serious reading. It correctly identifies the problems with the current welfare and benefits system, and it proposes completely sensible solutions to them. At least, that is my opinion, and I am actually a member of the Conservative Party.

As the document says:

“The current welfare system entrenches poverty and welfare dependence. UKIP believes in individual responsibility and independence. This policy paper shows that it is perfectly possible to have a simple, affordable welfare system that alleviates poverty and ensures social cohesion without discouraging work, marriage or savings, or without actively encouraging single-parenthood or fraud.”

The document then goes on to describe exactly how that could be done. The solutions proposed are absolutely common sense solutions, and they would work.

If UKIP are ever to challenge the main parties in a serious way, they will need to broaden their appeal beyond the single “out of the EU” message with which they are associated. Policy documents like this one will attract many, and clearly point the way forward for UKIP.

Three questions, then, remain.

1. Will UKIP be able to communicate policies such as these effectively via the media, so that the public begin to see UKIP as something more than an anti-EU pressure group?
2. Do UKIP have the people with the calibre to implement policies like this, against the entrenched positions of a politicised civil service?  (They do of course have Nigel Farage, who with a fair wind will be UKIP’s MP for Buckingham after the next election, but one is not enough.)
3. Will the Conservatives come up with something equally compelling as the election campaign unfolds? Their Work and Pensions spokesperson is Theresa May (of “nasty party” fame), so I’m not holding my breath, but perhaps she’ll surprise us all.