Has Labour reduced poverty?
Updated on 13 September 2006
Tony Blair reckons Labour has done a sterling job of reducing poverty. But do his figures add up?
The Claim
"The number of children in absolute poverty has halved."
Tony Blair, speech to Joseph Rowntree Foundation, September 5 2006.
Background
Eliminating poverty is an essential part of Tony Blair's progressive political project - and, to listen to his Joseph Rowntree Foundation speech, you'd assume his record is pretty impressive.
But poverty is a moving target. As the economy grows and the nation as a whole gets richer, the position of the people at the bottom of the heap could be getting worse, relatively speaking, even if their incomes are actually increasing.
So what's the full story behind this claim?
Analysis
Poverty figures are collected in an annual document from the department of Work and Pensions called Households Below Average Income (HBAI). This details statistical indicators of who can be classed as 'poor'.
But the figure most commonly used to discuss poverty is one which describes households below 60 per cent of median income. This is the figure Blair uses in his speech.
A median average (for those who didn't follow our General Election coverage - where we obsessed about medians and means every day - misleadingly juggling different averages is a favourite political technique) is the person at the middle of the distribution. So, if you had a list of 100 people, and ranked them in order, the median would be the guy in position 50.
Moving target
One of the problems with this measure is that it keeps moving. As the economy grows and the population as a whole gets richer, the income you need to pass this poverty test keeps moving upwards.
Instead of chasing this moving target, the government set a benchmark for poverty in 1997 and all their comparisons for 'absolute' poverty are based on this set figure. This threshold moves up with inflation every year, but is not adjusted for changes in overall incomes.
It is this benchmark that Blair is talking about when he says 'absolute' poverty. Indeed, by this measure, child poverty has fallen dramatically; there were 4.2 million children living in 'poor' households in 1996/7, in 2004/5 this figure had dropped to 1.9 million children.
Relatively speaking
The picture changes completely, however, if you look at 'relative' poverty: how people compare to the contemporary society, rather than how they compare to the 1997 benchmark.
The figure for 1996/7, the benchmark year, is 4.2 million, but by 2004/5 this figure has only fallen to 3.4 million. By no means the impressive reduction Blair refers to in his speech
The poorest children may have more money than they did nine years ago but the society in which they live has also grown richer. Their relative position has scarcely improved.
Bare necessities
Which measure tells you more about life on the ground? That's more of a philosophical question than a statistical one.
Raising the incomes of the poorest may help them to afford the necessities of life but, if they still feel poor in relation to others, it may not seem that life is much improved.
If their income is much lower than the rest of society they may still feel, to use Mr Blair's own phrase, "socially excluded".
This point is particularly stark when you look at housing costs - the fastest rising living expense over the past 10 years. Children get relatively generous housing provision but for adults the situation is more extreme.
Home sweet home
Earlier in his Joseph Rowntree Foundation speech, Blair mentions his record on adult poverty:
"The number of individuals in absolute poverty has fallen since 1996/97 by 4.8 million. There are 2.4 million fewer people who live in relative poverty, after housing costs, now than there were when we came into government."
These figures are correctly quoted from the Housing Below Average Income report. To lift 4.8 million individuals out of poverty seems like a huge achievement and, if he'd used the figure after housing costs, it would have been even higher: 7.1 million individuals lifted out of poverty, more than half of the total.
It's interesting that he doesn't use this figure. Perhaps it seems too wildly out of kilter with the position on the ground. If you take housing costs into account, and use the relative rather than absolute numbers, only 1.1 million people have been lifted out of poverty since the Blair era.
That's no mean feat, least of all if you're one of the 1.1 million concerned. But it's not quite as impressive as Mr Blair's speech makes it sound.
FactCheck Rating: 3 (How ratings work)
Verdict
The Blair government has succeeded in putting more money in the pockets of poorer individuals, especially vulnerable groups like children and pensioners. But Tony Blair's claim exaggerates the true impact.
Given the difficulty of improving the lives of poor citizens, halving the number of children in absolute poverty in ten years would be an incredible achievement.
But, as FactCheck readers have seen before, 'absolute poverty' numbers need to be taken with a pinch of salt.
The Sources
From the Joseph Rowntree Foundation, September 5 2006:
Tony Blair's speech
From the Households Below Average Income report, 2006, Department for Work and Pensions (PDF):
Page 32
page 54
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Verdict: 3 (How ratings work)
