Low wages undermine work route out of poverty

from The Guardian

Lucy Ward, social affairs correspondent

Labour's drive to tackle poverty is being undermined because persistent low pay means work is no longer a reliable route out of poverty in Britain, according to a report published today.

A study for the Rowntree Foundation examining the record of Tony Blair's government finds that, though many children and pensioners have been successfully lifted out of poverty since 1997, the root causes of the problem have not been addressed.

The ninth annual Monitoring Poverty and Social Exclusion report argues that the large numbers of people on low pay and the "seeming acceptance of gross inequalities of rates of pay" mean future poverty is as inevitable as ever.

Though the government has achieved "limited success" in cutting poverty, it has done so through the use of targeted benefits rather than resolving underlying issues such as workplace inequality and high numbers of jobless and unqualified young adults, the authors say.

The central premise of the government's anti-poverty strategy, that work is the best route out of poverty, is questionable given that half of the 3.4 million children living in poverty have a parent already in paid work, the same proportion as in the late 1990s, the study concludes. A low-paid couple, it says, can only avoid poverty if both are working.

The report is being published to coincide with the national poverty hearing on Wednesday, when faith leaders, politicians and others will gather in Westminster to hear from those living in poverty and debate solutions.

The study, conducted by the New Policy Institute, points to government successes in putting both child and pensioner poverty "firmly on a downward course".

Child poverty has been cut by 700,000, reversing an entrenched trend but falling short of the government's target of taking a million children out of poverty by March 2006, on the way to ending child poverty completely by 2020.

The big fall in poverty among pensioners, especially single pensioners, has been a major success of the anti-poverty policy, the researchers say. The poverty rate for pensioners overall has fallen from 27% in the late 1990s to 17% in 2004-05, and among single pensioners the rate has halved from 33% to 17%. But for working adults, the poverty rate remains unchanged since Labour took office at 19%, reflecting Britain's low wages.

The government's failure to bring down this figure is "a major weakness", the report concludes.

The report highlights other persistent problems, including the continuing unemployment rate of at least 10% among adults under 25, and the lack of progress since the late 1990s in the numbers of school leavers failing to achieve basic qualifications.

Such issues need to be addressed directly by the government, say the researchers, who point out that on issues where the government has taken a stand - such as bank accounts and central heating - exclusion through poverty has fallen substantially.

But the overall picture, says co-author Guy Palmer, is "not so much a mixture of success and failure of policy as one of success and neglect. Where the government has acted, change has happened. Where it has not, previous trends have continued."

Colette Marshall, UK director of Save the Children, said the government's strategy of getting low-income families into work was "clearly failing". "The government needs to address the issue of low pay but also acknowledge that work is not possible for all."

The charity is calling for two seasonal grants to support families during the run-up to Christmas and the summer holidays, when they face acute financial pressure.