Neither the coalition agreement nor the Queen’s Speech said anything about it. They were about deficit reduction, not poverty reduction. But the latter must be one of the key tests by which we measure its performance. Thatcher tripled child poverty and by 1997 it had reached 3.4 million (i.e. there were nearly 3 1/2 million children living in households where the income before housing costs was less than 60% of the national median). Labour brought that down to 2.7 million by 2005, though still not half-way to meeting its target of halving child poverty by 2010. The policy then collapsed. Child poverty actually rose over the next two years back up to 2.9 million before falling again to 2.8 million in 2008-9. That still left 22% of children in poverty households.
What effect can we expect from the coalition’s announced policies? The Tory aim is to tackle poverty via strengthening marriage (tax reliefs), improving education (pupil premium for poorer children), incentives to work (cutting benefit, though JSA at £51 a week is already at rock-bottom), and sorting out the economy (with a trickle-down to the poor). The LibDem policy is to introduce £10,000 personal tax allowances which would certainly increase the incomes of many of the poorest families, but only the first very modest tranche is being brought in this year. The real problem however is that the size of the spending cuts to be announced in the spending review in October, let alone in the Budget in 4 weeks time, is likely to swamp any minor reduction in the poverty numbers that these indiect policies might have.
What makes this all the more galling is that Britain has become a hugely richer country over the last decade – for the elite. New Labour has been a golden age for the super-rich. The wealth of the 1,000 richest multi-millionaires has nearly quadrupled since 1997, and rose last year alone by £77bn to no less than £335bn. Just 100 persons in the UK now have wealth valued at £183bn, that is 54% of all the wealth in the country.
These rich-poor inequalities are now staggering. Yet all the talk, in a financial crisis brought about directly by many of these richest 1,000 individuals, is that between 100,000 and 300,000 public sector workers will now lose their jobs, most low-paid, to cut the deficit for which they bear no responsibility whatsoever. Why is there no talk instead of imposing a 10% super-tax on this hyper-elite to raise some £35bn which is after all less than half of the amount by which their wealth increased last year?