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Iain Duncan Smith: Poverty 'About More Than Income'

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IAIN DUNCAN SMITH
Work and Pensions Secretary Iain Duncan Smith has sparked questions over the Government's commitment to child poverty targets inherited from Labour, with a speech in which he argued that the problem cannot be addressed by money alone. | PA

Work and Pensions Secretary Iain Duncan Smith has sparked questions over the Government's commitment to child poverty targets inherited from Labour, with a speech in which he argued that the problem cannot be addressed by money alone.

In a significant intervention in the debate on poverty, Mr Duncan Smith said that the "hugely expensive" drive to lift children out of poverty by boosting family income had failed.

It was time to consider new measures of wellbeing which take into account factors like health, family security and education, and incentivise action which will make a real difference to a child's chances in life, he said.

His comments came after Prime Minister David Cameron said there was "a real problem" with the way poverty is officially measured, under which a child is deemed to be in poverty if its family is on 60% or less of the median average income.

Mr Cameron said the "illogical" method meant that children could fall into official poverty because of increases in the income of childless households, like pensioners, even if their own income is unchanged.

The relative poverty measure is enshrined in Labour's Child Poverty Act, which last year created a legally-binding requirement for the Government to end child poverty in the UK by 2020.

Some 2.8 million children are living in poverty, according to official statistics and measures in George Osborne's Autumn Statement are expected to increase that figure by 100,000. The respected Institute for Fiscal Studies think-tank said on Wednesday it was now "inconceivable" that the Government would hit its target.

In a speech, Mr Duncan Smith said the relative poverty measure produced perverse incentives for the authorities to focus on lifting income through higher welfare payments and to pursue programmes which will lift families from just below the 60% level to just above.

He added: "This is a hugely expensive approach and it looks set to have failed. Though some progress has been made on poverty, the last government were set to miss their targets by a wide margin, having already missed their interim targets.

"Poverty is about more than income alone. We must remember that levels of family income are just an approximate - and by no means perfect - measure of family wellbeing. This is not to say that money isn't important. Of course it is ... But I do believe that increased income and increased wellbeing do not always follow the same track."

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