Child Poverty Rates increase

Figures released today by the DWP (Department for Work and Pensions) show that 100,000 more children now live in relative poverty compared to a year ago.

Relative poverty is defined here as people living on 60% or below of average household income.

We already know that whilst tax credits have lifted those people close to the 60% barrier above it, it has in fact done little for those on 40% or below average household income, whose numbers have increased.

As George Osbourne says tax credits are not the only way. They will not on their own solve the problem. We need to tackle other issues like family breakdown, community cohesion and lack of aspiration that exists in some areas.

The BBC has this.

The great Council House debate

This seems to have some to the fore recently since a minister who seems to have profiteered by buying not one but two social housing units for herself now wants to debate who should and should not have council housing.

I was listening to Jeremy Vine's phone in on BBC radio 2, and had to stop as it was making me a tad angry. So I thought I would add my tuppence worth.

Firstly why do we need council housing or social housing at all?

In short, regulations. Or rather planning regulations and laws. In the 1930's if you could get a plot of land you could build on it. People did. They frequently started with things like railway carriages and small buses. In some parts of the country you can see odd houses with many windows so close together that it looks like a railway carriage with a house built around it. That is because it is.

These days you can't do that, so the planning system rations land. That makes it very expensive for people to get their own houses, in some jobs and in some locations.

People witter on about council houses being subsidised. That is rubbish, or at least it is in part. The "subsidy" that there is is related to the cost of the land. Try ringing up a land agent and tell them you have an acre of prime building land, for residential use in a town in the South East. They will price it at between £1 and £3 million. Tell them it is designated for social housing, and they will tell you to go away. So that is where the reduction in price comes from, the government gets the land cheap because it has planning blight. If you will, they are saying that only "poor" people can live there, and the land price falls.

People go on about passing the "house" on in a will, to a son or daughter. In fact that is not quite right. Firstly less council house tenants have wills than the average, secondly the succession happens as a matter of law* at the previous tenants death. In the case of a council house, covered by the 1985 Housing act (as amended) the right of succession extends to any family member, from grandfather to grandson, uncle to cousin who lived at the property as their primary or sole residence for a period of at least 12 months before the death of the tenant. However this only applies if tenant was not themselves a successor to a previous tenant. (For example if a wife inherits by death even if she is a joint tenant, then no one else can, though if a wife is assigned the tenancy under the 1073 matrimonial causes act, that is not a succession). If it is an assured tenancy, under the Housing act 1988, as is the case with most housing associations the right to succeed only extends to the spouse.

Then some people would like to see people move on when their circumstances are better. This seems to be a desire to have some on going means testing to see if people are allowed to live in council houses. There are some legal difficulties with this. Firstly will the new legislation be retrospective? If not it won't make a lot of difference. Secondly is it desirable? People can and do move on in any case. If you live in an area where your rent would double moving from the social sector to the private sector then saying if you earn more than X a year you have to move to less secure accommodation is an extension of the benefits trap. I also heard people say that people in council houses should be made to look for work. Well I have some news for that sort of person. Many people in council houses do already work. It tends to be in lower paid or semi seasonal work, but as I say, depending on the area quite a lot do work.

Also, if social housing is to be means tested then all social housing estates will become ghettos of the unemployed or low wage earners as opposed to the more mixed areas they became after the Right To Buy was introduced. That would be a retrograde step.

If you want to see an and to social housing then either unskilled wages have to go up, or house prices need to collapse. Either you pay more for your burgers and fries, or to have your grassed mowed, or you accept social housing.

Any way, here endeth the rant for now.

(* there is an exception. tenancies transferred from councils to housings associations on Large Scale Voluntary transfers ended up with a protected right of succession, but this is not automatic and is buried in procedure and in some case well hidden in the tenancy so that the RSL can point to the last clause which is discretionary rather than a right)

Family breakdown and government policy

Frankly there has not been enough discussion of Ian Duncan Smith's policy paper on Social Justice, entitled Breakdown Britain. You can find the website of the Center for Social Justice here, and the Breakdown Britain report here.

There is a huge amount government can do, for example as well as having a minister for women, or children why not have a minister for families?

Apparently according to this article in yesterdays Telegraph Gordon Brown is quoted thus:

"Gordon Brown said in his 1998 Budget that 'support should be based on family need – not family structure."

Which appears in part responsible for 200,000 families lying about their status to get more benefits. It seems to make sense to live apart, or at least to pretend to. What is more of a concern to me is how many of the 1.9 million families that do genuinely live apart do so in part because of crazy benefit or government related pressure?

There is no doubt, or at least there should not be that a stable family is the best place in which to bring up a child. We need to make it clear that stable families are supported.

People also equate living together with being married. After all, what bigger commitment is there than having children together?

Well, it has to be said that having children together is a big commitment, but it is a different commitment to being together in sickness and in health for richer or for poorer.

We do need to preach values.

Relative Poverty and the fallacy of redistribution

Much waffle has been spoken today about this document revealed to the world by Guido Fawks (Big hat tip to Guido again). The document is not a policy document but a discussion document by Greg Clark MP and Peter Franklin. Guido has it here.

It seems to me much of the the vacuous chattering classes assume we have signed up for some sort of massive tax based redistribution of wealth. We haven't.

It seems the document looks at measuring poverty in relative terms defined as those living in households with 60% of contemporary median household income.

Fine, but there is an issue. Firstly what about young single people living on their own? How much of a problem would it be if their income was less than 60% of the median household income?

The second issue is that many families now have dual incomes, out of which they pay for child care. Families with much lower overall income who have a stay at home adult look poorer, but do not have the expense of paying for childcare either. People make choices. Some want a high pressure high pay job, others don't. Some have good luck others don't. Some work hard through school and then a career and others don't. The people who don't are not bad or indolent, they may just choose to enjoy life a little more and have less ulcers or what ever. Some people do difficult high pressure jobs that don't pay very well because either they enjoy that job or they feel called to do it. It would be daft to consider any of that a problem that should concern the state.

That said we do have a hard core underclass who are either unemployed or are not in full time well paid work. This group is much harder to help.

Some seem condemned by postcode in that because of where they live, people make assumptions about them which then limit their ability to get a job, and education or socialise with some other people.

Some people have poor literacy and/or numeracy severely limiting job prospects, whilst others may have mental health issues or drug addictions.

The question is would redistribution help, and what do we mean by redistribution any way.

If we mean that we try to remove people on low incomes from the tax system altogether then the Conservative party has been in favour of that for years.

If however we mean taking tax revenue and giving it to people on low incomes then we need to look at all the implications of that. People who do poorly paid work do so because they either can't or won't get better paid work, for a variety of reasons, however employers who engage people on low incomes do so because they can. If the state then tops up those earnings, then we are all subsidising an employer who is not paying a reasonable wage for the work he is asking people to do for him. In a free market you would hope as employment rises that employers would be competing for staff.

Alas a lot of unskilled, and indeed semi and fully skilled work gets filled by immigrants who will accept lower wages because they have their household in another country where living costs are less. This makes it impossible for low wage earners to have their wages driven up by scarcity of supply.

In short I take the view that if you pay people to be poor, then as there is money in it, people will be poor.

If we want to genuinely tackle poverty we have to deal with a number of issues.

• As Greg Clark's report rightly says people are becoming entangled in our welfare states safety net. We need to find better ways to assist the transition out of it.
• Many people end up with a poor education because no one thinks they can or should do better.
  
• We need an immigration policy to suit the whole country not just the economy. By that I mean we need to beware of the effect on wages of large numbers of unskilled immigrants.

In short the situation is complex. Just throwing money at it is not the answer.

Incidentally Iain Dale links to this piece on Conservative Home by Greg Clark whilst Borris Johnson has written this for the Telegraph.

I forgot to mention Greg Clark's piece on Conservative home points out that whilst those just within the 60% of median household income has fallen, those in the bottom 40% of median household income has risen.