Staying married, staying poor

It was certainly ambitious of the new Labour government on coming to power to embark on a plan not simply to reverse the three decade old rise in child poverty but to remove it entirely. Targets were set to reduce the number of poor children by at least a quarter by 2004/5 compared with 1998/9, to reduce it by a half by 2010 and to eradicate poverty by 2020 or ‘within a generation’.

As has happened, child poverty fell by around two-thirds of that required to meet the quarter target in 2005, putting it roughly back at its 1994/5 level. If a report to the Office of the Deputy Prime Minister found it disappointing there was worse to come as, after come down from 34.1 per cent of children to 28.4 per cent, it rose again to 29.8 per cent in 2005-06.

It might have helped if the government had an accurate perception of who poor families really were. Instead, they were fixated with the image of poor parents as lone parents, though they never constituted the majority of low income people at any point in time: couples with children were 32 per cent of all people in poverty, and lone parent families 24 per cent in 1999/00, with poor children split 55/45 per cent between couples and single parents.

The equation of poor parent with lone parent suggested a solution in tune with the ideology and objectives of Labour feminists, rather than the evidence: the independent working mother.

What was anathema was any recognition of men’s financial responsibility for families, since this might undermine the ability of women alone to provide for themselves and their children. It was a reason why low income couple families were disregarded as the undeserving poor. The confident expectation was that, if they were not being prevented by a lack of crèches and other state support then between 70 and 90 per cent of lone parents would eagerly rush into work, substantially solving the problem of lone parent’s children’s poverty.

The rising tide of lone parenthood — unwed births rose from eight per cent in 1970 to 42 per cent today and a quarter of children now live with one parent — certainly contributed much to growing levels of workless households and long-term benefit dependency. By 1997, only two-thirds of single, childless adults and under half of lone parents had any employment.

The focus on mothers’ employment ignored the role played by the depletion of male incomes in the growth of both child poverty and lone parenthood. It also ignored how workless lone parenthood is only one way in which inactivity is concentrated in one-adult households.

 By 2005, 17 per cent of working age men were completely inactive, compared to five per cent in 1971. As men’s employment gap by marital status increases, a growing proportion has very low prospects of ever working. This is an ongoing trend, with a recent sharp growth in young males who are not in employment, education, or training.

This is all making a big contribution to the climbing proportion of working age, childless single people in the poverty statistics, which seems to have been completely overlooked by policy makers.

Since it makes men marriageable, more remunerative male employment might bring a reduction in benefit dependent lone parenthood, and responsibility for supporting a family might keep more men productive — and many out of jail.

 As motivating lone parents to work by cutting their entitlements would defeat the object of targeting needy people, the onus has been on bribes to ‘make work pay’. An early move was to make the Working Families Tax Credit pay two-and-a-half times more for working 16 hours a week than the Family Credit (the previous benefit for poorer working families it replaced in 1999).

 It was soon apparent that the ‘welfare to work’ strategy couldn’t fulfil the ‘make child poverty history’ commitment since it didn’t move no-work households over the poverty line. So out of work benefits were increased on a similar scale to in-work credits; with the introduction of a Child Tax Credit separate from a Working Tax Credit in 2003 the link was broken between receiving tax credits and work. Alongside this, disability benefits expanded significantly.

The result of juggling the competing objectives of eradicating poverty while making work pay has been a chaos of changing and multiplying benefits and credits. Lone parents’ proportion of child contingent support has increased faster than their proportion of children: with payments more than five times larger than those going to couple families by 2004. With extra allowances for childcare at 80 per cent of the costs by 2006, even for the lowest earners.

Consequently, the parent is either a full-time mother courtesy of the breadwinner state, or a supplementary earner with the state as primary provider. We have shifted the costs from one form of welfare to another.

For all the expenditure, the increase in the proportion of lone mothers working 16 or more hours per week is about five per cent and largely limited to mothers with one child, while around 93 per cent of couple families have at least one parent working 16 or more hours a week and over two thirds have both parents working. Having targeted the easier to place lone mothers, the government’s target of 70 per cent looks increasingly remote. The reduction in non-working lone parents has itself been partly offset by the continued increase in children with lone parents. There is also the reduction in the hours of those already working, with a continued shift from full time work towards the minimum hours for maximum top ups and child care payments.

While so much was stacked on lone mothers’ employment as the front line solution to child poverty, questions were not asked about their employment potential: lone mothers’ average age has declined and their number of children has risen substantially, more of them are single, low ability girls, who have never worked, live in social housing and almost a half do not have even a single ‘G’ grade GCSE.

Even if there are work opportunities, they have to compete with the alternative of being with children, and over a third of lone mothers on income support claim to have a sick or disabled child, with five per cent having two or more. It is not surprising that the lack and expense of childcare seem to worry only five per cent or less of lone mothers on income support and only 15 per cent are at all interested in accessing childcare to work, which many consider financially unworthwhile. Even when the last child reaches 16, a third move onto incapacity benefit themselves.

If child poverty is understood as lone parent poverty, then there has certainly been a successful reduction, with a significant fall for children with no work, full-time working and, in particular, part-time working families, and for children with disabled adults or for disabled children, local authority tenants, those in households with young children or with four or more children. Particularly when lone parents work at least 16 hours at the minimum wage, most are lifted clear of poverty.

What made the overall fall stall, then reverse, is the poverty rise for couple families. A greater percentage of poor children now have two parents — 57.4 per cent in 2004-05 and 60.3 per cent in 2005-06. Children in a working household also make up a higher proportion of the poor because the poorest working people are in two parent families. Over 80 per cent of poor children with at least one parent working live in couple families and are expected to increase enormously by 2010.

Making lone parents central to a tax and benefit system which is unresponsive to two- parent families has backfired and helped to sabotage the campaign to end child poverty.

For two parent families their combined income counts against their benefit entitlements, yet there is no exemption or allowance made in recognition of the cost of supporting another adult. While a working lone mother can keep all contributions from the non-resident father without losing subsidies, if he lived with them then all of his income would count against what the family received. A system based on family structure and not family need makes couples less eligible for help and poorer people subject to marriage penalties.

 A two-child couple needed to work 74 hours a week at the minimum wage to clear poverty in 2004/05, when a lone parent with one child working only 16 hours was already above the threshold. The lone parent in social housing would have needed to earn £78, while a comparable couple would have needed more than four times as much — an increase from three times as much in 2003/04.

 Much emphasis has been placed on encouraging mothers’ employment with extra money. Yet the role of incentives in household formation has always been denied, together with the way that preferential payments transfer social values as well as cash.

But can poverty ever be said to be relieved when it only falls because there is more welfare dependency with the result that, as soon as rises in entitlements decline (as in 2005/06) the total in poverty rises?

Despite the bottom income groups receiving the lion’s shares of public transfers, Labour’s redistributive programme was barely sufficient to halve the growth in inequality up to 2003-04, but not to reduce it, and it is rising again.

Even researchers on the left have been driven to acknowledge that changing household composition, formation and dissolution, with more lone parents, single adults and double income couples, have done much to drive the inequality that so exercises politicians and policy makers.

There is a huge downside to any means-tested strategy and the more ambitious this is, the more it destroys in terms of work, savings, self-advancement, honesty, mutual care and co-operation. Given the incentives to split up or live separately, not only is support paid to at least 200,000 more lone parents than actually exist, but ‘strategic single parenthood’ has become the way to get housed and maximise resources for lower income people.

Whites and Afro-Caribbeans in less affluent areas now raise children almost entirely with lone parents. Only when joint incomes reach £50,000 per year is there no loss from being a couple. The transfers individuals make within households are the first line of welfare and route to raise living standards, yet collaboration is penalised because it is deemed wrong to share within families.

While couple families numerically make up more of the poor at any one time, they are more able to capitalise on help, improve their living standards and more likely to move into and stay in higher income groups. This is prevented or impeded to the degree that handicaps are imposed on mutual support at the starting line. These handicaps dissolve the links that bind people together, promoting household atomisation and long-term dependency that increase children’s disadvantages — not least by denying them the two live-in parents committed to their welfare that will do most for positive development.

Patricia Morgan is author of ‘The war between the state and the family: how government divides and impoverishes’ (IEA, 2007).