Think tanks point towards growing political consensus on the need to reduce poverty

Published to mark the start of the Foundation’s centenary year, Overcoming disadvantage supports the feasibility of a sustained, 20-year programme for defeating poverty by identifying a range of innovative approaches for policy makers, in and out of government, to consider and debate. The authors – from the IPPR (Institute for Public Policy Research), the Social Market Foundation, Policy Exchange, the Scottish Council Foundation and the Institute of Welsh Affairs – differ on the types and combinations of policy that will be needed. Income redistribution and the proper balance between universal and means-tested benefits are among the disputed areas; as are the merits of targeting disadvantaged communities, rather than low-income families and individuals.

But as Nicholas Timmins, Public Policy Editor of the Financial Times, argues in an introduction and overview, the chances of some consensus about aims in tackling disadvantage, if not the means, appear to be higher than for many years. He draws particular attention to the Policy Exchange chapter, written by Nicholas Hillman, until recently the senior researcher to Shadow Work and Pensions Secretary David Willetts MP, as a far cry from statements by Conservative Ministers in the 1980s and 1990s belittling the implications of widening inequalities.

David Willetts will be a keynote respondent at the Westminster launch of the report, together with Des Browne MP, the Minister for Work at the Department for Work and Pensions. (See Note to Editors for further details.)

The key points and proposals in Overcoming disadvantage include:

Chapter 1) Loud and clear: an open and persistent poverty strategy
Sue Regan and Peter Robinson, IPPR

• We urgently need an updated analysis of trends in income inequality to understand why market inequality stopped rising in the mid-1990s, and why the effectiveness of the tax and benefit system in offsetting inequality appears to have declined.
• Instead of ‘doing good by stealth’, the Government should seek active public support for tackling poverty and disadvantage, including an open debate about tax and income redistribution.
• The ‘welfare contract’ between state and citizen should be comprehensively redesigned to give a clear description of people’s rights and responsibilities in relation to benefits and other support.
• One of the biggest outstanding challenges is to respond to the rise in people claiming incapacity benefits (around 2.7 million in 2003), so as to help more than 1 million disabled people who want to work but have no job.
• Inequality between regions has been neglected. Stronger regional polices are needed to increase the number of jobs in disadvantaged areas.
• Efforts to prevent disadvantaged children from growing into socially-excluded adults require greater early-years help for parents. Children and young people should be offered integrated support modelled on the Sure Start pre-school programme.
• Asset-building programmes, like the Government’s Child Trust Fund to endow babies with savings, should be extended to provide young people with security in times of crisis or change. 

Chapter 2) Labour’s unfinished business
Roger Wicks, Social Market Foundation

• A 1p increase in the rate of income tax or National Insurance is required to give the Government’s child poverty programme new momentum. The money should be used to raise the Child Tax Credit, support a new phase of the welfare to work programme and pay for a more generous Social Fund (see below).
• The Government should investigate options for getting more help to large families, given that half of all poor children live in families with three or more children.
• The Social Fund, which makes repayable loans to people claiming Income Support, should be radically reformed to help poor people on the brink of serious debt problems.
• Housing Benefit for tenants should be replaced by a Housing Tax Credit, payable to low-income households irrespective of whether they own or rent their homes.
• A permanent ‘New Deal’ should be introduced for the long-term jobless. Incentives to find work would be supported by basic skills training and incentives for employers in disadvantaged areas to hire unemployed workers.
• Asset-building measures should be extended to provide grants for 18-year-olds (around £10,000 for the poorest) to spend on education, training or investment in a business venture. 

Chapter 3) Condemning a little less and understanding a little more
Nicholas Hillman, Policy Exchange

• Benefits for pensioners and families with children should be simplified and means testing under the new Child Tax Credit and Pension Credit reduced. One option would be to raise the basic state pension for older pensioners to the level of the means-tested Minimum Income Guarantee, and then to extend the policy downwards as resources allow.
• Social Fund support should be extended to people on low incomes when they move off out of work benefits and into employment, especially parents. Loans should be offered in a less humiliating way, as if they were a private financial service.
• Flexible support for people out of work, including personal Job Brokers and targeted initiatives in deprived areas, are likely to prove more effective than most existing New Deal programmes.
• Differences between the benefits for people who are unemployed and those classed as ‘economically inactive’ should be reduced. A Jobseeker’s Allowance Plus could be introduced for people on Incapacity Benefit, but who are capable of some work.
• Assessments of future poverty rates should take account of migration trends. While refugees should be welcomed to Britain for humanitarian reasons, the Government should do more to repatriate those who have been refused asylum.
• Pressure for new housing is reflected in rising prices and growing numbers of homeless families. Politicians should confront local ‘nimbyism’ and make the case for necessary new housing and socially diverse communities. 

Chapter 4) Beyond the bounds: resources for tackling disadvantage
Jim McCormick, Fiona Spencer and Corinna Gamble, Scottish Council Foundation

• Poverty can be reduced by cutting costs for low-income households, not only by increasing state support. Social housing landlords could tackle financial exclusion by negotiating pooled packages for insurance and other services. Government could promote cost-cutting partnerships between local shops and major retailers, helping local markets to function more effectively.
• More investment is needed in the health of pregnant mothers and the wellbeing of the infants, especially in low-income families. Child Benefit payments could be made available during pregnancy through antenatal clinics. The Government could also encourage the retail sector to promote ‘loyalty cards’ giving mothers a discount on baby products and ‘healthy living’ purchases.
• Cities like Glasgow, with the highest proportions of residents claiming out of work and incapacity benefits, should set campaigning five-year targets for raising employment rates. Improvements in the existing New Deal and Employment Zone programmes could be coupled with extra investment in social enterprise and undertakings from local employers to each hire at least one jobless resident from the city.
• More attention should be paid to the potential for converting ‘unofficial’ economic activity by people claiming benefits into legitimate small businesses rather than simply treating it as fraud.
• Advice on money, jobs and volunteering could be made easier to access in low-income neighbourhoods by extending the roles of service providers that local people trust (including health centres and primary schools). 

Chapter 5) Community approaches to poverty in Wales
John Osmond and Jessica Mugaseth, Institute of Welsh Affairs

• Wales has taken a more holistic approach to tackling poverty, making the collective condition of disadvantaged communities its starting point for initiatives to improve the life chances of individuals.
• The Welsh Assembly Government’s Communities First programme, targeting 142 deprived areas, should learn from examples of empowerment like the Gellideg Foundation in Merthyr, where estate residents have created their own organisation to provide job training, restore buildings and establish new community facilities.
• The Community Enterprise Wales initiative, helping local people to identify and meet their own social and economic needs, should be given a mainstream role within the Assembly Government’s programmes. Such empowerment strategies will contribute to local regeneration and challenge traditional boundaries between the public, private and community sectors.
• Impoverished rural areas in Wales can be helped to attract new investment and jobs through planning strategies that link them with nearby towns to form ‘development domains’. 

Speaking at the launch conference, Lord Best, Director of the Joseph Rowntree Foundation, said: “Last year we published our own working paper arguing that a 20-year mission to reduce poverty was affordable provided the political will existed to see it through.”

He added: “As the Foundation begins its centenary celebrations we are pleased to be moving the debate about tackling poverty forward with this challenging report from five influential think tanks. We believe it paves the way for a political consensus about the value of tackling poverty that would have been unthinkable a decade ago.”