(c) world development movement

A report has found that UK poverty has been rising since before the recession. This news will be greeted by many as another sign of Labour’s failure. If after 12 years in government, nothing has been done to halt poverty, surely it’s time to give someone else a go? A closer look shows that this attitude is dangerously mistaken. The findings make clear precisely why the New Labour project – greeted with such optimism in 1997 – has widely met with failure.

The report finds that progress on child poverty has stalled (by 2000, Labour had lifted a million children from poverty) and the number of children in poor families (with a parent in work) has risen to its highest recorded level (2.1 million). Labour’s line throughout the period has been that ‘the best route out of poverty is work.’ The focus has been on reducing unemployment to solve child poverty.

This is emblematic of the whole New Labour philosophy; the way to solve social problems like poverty (the traditional aim of the left) is by strengthening the economy (the traditional aim of the right). This is why we had the neat compromise of the ‘Third Way’, through ensuring economic growth and with a little tinkering the poverty crisis will solve itself.

The folly of this approach is obvious. The facts are that most children in poverty are in households where a parent is employed (54%). Under Labour the number of children in working households has risen, yet child poverty remains stationary.

Yet on other social problems the picture is rosier.  Educational results among children have improved across the board. The report finds lower levels of premature deaths, less crime and less fear of crime. This represents a series of improvements in all the areas where Labour is supposed to be failing. Not a day goes by without Labour’s big state, ‘command and control,’ strategy being accused of ploughing taxpayer money into creating inefficient bureaucracy. In fact, Labour’s strongest state interventions have most effectively tackled social problems, despite a worsening economy.

So what is the equivalent strategy for tackling child poverty? The problem is that it is standard redistribution. The whole point of New Labour was to avoid association with such socialist tactics. As a consequence, while ‘tax credits‘ have been employed, directly lifting 1.1million children from poverty, the numbers in need of tax credits stands at 2.5million. Extending and deepening this proven strategy would eliminate poverty for millions.

Persistent inequality lies at the root of this problem. The ratio between median income and that of the poorest fifth has worsened; no surprise that 700,000 more children need tax credits. Strikingly, the poorest fifth pay more in taxes than they receive in non-contributory social security. This shows an appalling failure, not just in the private economy, but in our distribution of benefits. The worst off are systematically harmed by this problematic system. Again, this invokes the customary reaction that Labour have disproportionately ‘pummeled Middle England‘.

The conclusions to be drawn are as clear as they are contrary to conventional wisdom. Where Labour have been boldest in intervening, results have been impressive. Where they have stressed their ‘New’ credentials the situation has worsened. The tragic irony is that Labour’s concessions to the right and fear of progressive solutions have left its social agenda hamstrung – a failure that will sweep Cameron, champion of ‘small government‘, to power. The Tories will be voted in, while enthusiastically promising to ‘roll back’ the measures which have proven effective and embracing the strategies that have failed. Somewhat fittingly, it is a direct reversal of the 1997 campaign song that this time, ‘things can only get worse.’

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