Good morning.
I'd like to thank you for giving me this opportunity to talk to the Parliament of Canada and this very important committee in its important inquiry.
I had hoped to be able to show you slides, but unfortunately, the powerpoint system where I am at the moment is not working. You have a copy in English available, and I'm sorry I didn't have time to get them translated into French.
When talking about a U.K. strategy, it's important to realize that a lot of the details are devolved to the four countries that make up the United Kingdom: England, Wales, Scotland, and Northern Ireland. Peter and I are currently on the advisory committee for the National Assembly for Wales, which is designed to help implement the eradication of child poverty by 2020. It is, however, a U.K. government policy, which is agreed to by all four components of the U.K., to attempt to eradicate child poverty by 2020.
The main plank the U.K. government has pursued to do this has been a policy of full employment via active labour market interventions, by trying to get people into work they have not been in before. Attached to this is a policy of trying to make work pay through a whole tranche of mechanisms, such as a minimum wage, tax credits, a form of negative income tax, child care vouchers, and training and education of people who need it in order to be able to get paid work.
These policies have been pursued very rigorously since about 2000. By about 2005-2006, they succeeded in reducing child poverty as measured by low income by about a quarter, which was quite an achievement, given the high levels of children in poverty we had in 1999.
You'll see on one of the slides I've given you that in the 1980s and early 1990s, child poverty as measured by low income increased threefold. Since about 2000, it has gone back by about a quarter. However, recently, in the past year, those policies have stalled. In fact, by some measures child poverty has been increasing for the past year, and maybe in the previous year as well.
It is unlikely, given the academic research we have in this area, that pursuing full employment policies alone will be sufficient to eradicate child poverty forever. There will always be some people who need to receive welfare benefits because they cannot work because of caring responsibilities for children and adults.
In order for the government to make its target, it needs to do more than it is currently doing to increase the levels of incomes of families who for various reasons cannot work. The simulation models that have been done by some of my colleagues at the University of Cambridge and the London School of Economics and Political Science have shown that full employment and active labour market intervention policies alone would at best reduce child poverty by about half. To get the other half, you would need to do something about the welfare benefits.
The U.K. government had a wide-ranging consultation a few years ago about how child poverty should be measured. Much of the debate and a lot of meeting of targets depends crucially on the way you measure these things. After this extensive consultation, they came up with a three-tiered approach. There are now officially three measures of child poverty. The government argues that it will know it's meeting its targets if all these measures are going in the same direction. They all need to be declining, not only one or two.
The first one is an EU relative income measure, which is children and families below 60% of the median income across all 27 member states of the European Union.
The second measure is a fixed measure that takes the level of income that would have been needed in the mid-nineties and upgrades it only for inflation rather than for changes to income in society as a whole.
The third measure is one that comes out of academic research by my colleagues Peter Townsend, Joanna Mack, Stewart Lansley, and others, and is very similar in concept to that measure used in Ireland--consistent poverty. It is low income and multiple deprivation combined. So you measure both the resources that people and families have and also the outcome of low resources in terms of material deprivation.
All those measures need to be declining for the government's policies to be effective, and they are targets for the first and the third measure.
There are also European Union-level measures of poverty. The first is the one I talked about, the 60% of median, and the second is the number of children in households where no one is working--workless households.
It's important to understand that this is just the broad picture of how it is being measured in terms of income poverty and low resources. But the U.K. government also has other policies, which I was told you are interested in, to do with fuel poverty. These use slightly different definitions, and unfortunately the measures of income poverty used for the targets for eradicating child poverty and the measures of income used in fuel poverty are not currently aligned. Basically, the idea of fuel poverty is that households should not have to spend a disproportionate amount of their income in order to adequately heat their houses.
This is important in a country like the U.K., and also I guess in a country like Canada, where heating your house, particularly in winter, can have long-term health consequences, and short-term health consequences if it's not adequately done. And it's particularly important at the moment with the rapid increase in fuel prices.
The government's main policy for eradicating fuel poverty, which it has a statutory obligation to do--and is very likely not going to meet because of the recent rises--has been to deregulate the market in an attempt to reduce the cost of electricity and gas. That was effective in the past but is not effective at the moment. But it was also to identify a vulnerable group of population--the elderly people receiving welfare benefits--and to then provide free energy efficiency measures to improve the energy efficiency of their houses, i.e., lagging the lofts, providing new boilers, and improving central heating systems.
The government has also, every winter, given an increasing amount of money as a one-off payment to pensioners in order to help them meet the cost of their fuel bill over winter. That's equivalent to about £200 U.K., depending on various criteria.
So there are these central government planks, but the details of how the anti-poverty policy and to a greater degree social exclusion and social inclusion policy are implemented with regard to service delivery and health, education, and housing depends crucially on which country you live in within the U.K. So like Canada's federal system and provincial system, we have a U.K. government system and then a lot of responsibilities devolved to the individual country level.
The details of how this has been done vary from country to country, and I'll be happy to answer questions about the individual details. But that's just to give you a kind of overview.
Thank you very much.