Karen Buck is absolutely right to demand that the poorest households, who are experiencing the worst of the recession, receive Alistair Darling’s help when he sets out his budget later this month. By investing in these households, he would be demonstrating not just economic sense but also his government’s continued commitment to ending child poverty.
Ten years ago, Tony Blair and Gordon Brown committed the Labour government to end child poverty in a generation.
Some may think that this is fine talk for good times and that in our current circumstances social justice will inevitably fall victim to economic necessity.
But this view misses the vital point that investing in the lowest income families makes perfect economic sense. As repeatedly stated in recent weeks, putting money into the hands of those in the poorest circumstances is one of the most sensible steps to take in an economic crisis. Evidence proves that they are more likely to spend because they need to – boosting the local economy, generating profits and creating jobs. US economists, ranking the various options for fiscal stimulus, gave the best rates of return for spending on low income households. This is just the targeted economic stimulus we need.
But this goes beyond economics – it is about moral and political commitment.
This week, Save the Children was forced to launch an emergency crisis grants programme for the first time in the UK. We usually only do this in developing countries. But with the recession throwing more and more families into dire circumstances, we have now had to do it here. Unemployment, repossessions and the rising cost of food mean that ordinary families are struggling to make ends meet and cannot afford essentials. Some are missing meals and some forced to choose between food and heating.
What we have done is just a drop in the ocean – much more is required from the government to meet the needs of these families.
There would be a moral imperative on any government to help in these circumstances, but it is surely stronger on a government that has committed to end child poverty. The government’s efforts over the past decade have helped to lift some 600,000 children out of poverty. Commitments made in last year’s Budget are expected to reduce the number of children in poverty by a further 500,000. However, the current crisis is pushing more families into severe poverty, increasing the costs of ending child poverty. Without further investment, the 2010 target will be missed, with 700,000 children remaining in poverty.
So far the government has given some help to low income families to cope with this recession – the pre-budget report brought forward increases in child benefit and tax credits from April to January and gave one-off payments to help pensioners. However, compared to the rest of the developed world, the UK is lagging behind in spending on low income households in its fiscal stimulus measures. Our research indicates, when compared to the rest of the G8, the UK has committed less targeted spending to low income families as part of its fiscal stimulus package than any country apart from Russia. Yet, none of those other countries have made a commitment to end child poverty by 2020.
The time to act is now. Save the Children, along with the rest of the End Child Poverty coalition, are urging the government to put at least £3bn into low income families in this year’s budget. It makes economic sense, is morally right and will keep the government on track to meet its most radical and historic commitment: to rid our country of the scourge of child poverty once and for all.