How do the general election manifestos from the Conservatives, Labour and Liberal Democrats address UK poverty? Chris Goulden takes a closer look.
Last September, JRF published its evidence-based strategy, We can solve poverty in the UK. This set out a five-point plan to:
- increase incomes and reduce costs
- provide an effective benefit system
- raise skills
- strengthen families
- deliver inclusive growth.
It is clear that all of the parties recognise the need to take action to make sure that the economy and society work for all, raise living standards, and provide a secure foundation for the post-Brexit UK. But how do the policies actually stack up? I’ve had a look at what each has to say on these five areas and where the common ground is on solving poverty. Whichever party is in power in June, they will need to get to grips with deep-rooted poverty across the UK.
Increase incomes and reduce costs
Poverty arises from a mismatch of high living costs and low incomes and increasing the earnings of low-income households is at the heart of JRF’s strategy. All three manifestos focus on the important role of minimum wage levels in improving living standards for people in poverty:
- The Conservatives re-affirm their commitment to increasing the National Living Wage (NLW) to 60% of median earnings by 2020 and with the median thereafter.
- Labour aim more ambitiously for a tenner an hour by 2020 – and for all those aged over 18.
- The Lib Dems want to set up an independent review into a ‘genuine’ living wage rate. JRF research into the minimum income standard is currently used to set the Living Wage.
Housing is typically the biggest cost for families, and proposals to increase house-building feature across the manifestos. The Lib Dems want 300,000 new homes a year, the Conservatives an extra 250,000 a year by 2022 and Labour an extra 100,000 a year specifically in the social sector by 2020.
In JRF’s strategy, our analyses at the time suggested we need to invest an extra £1 billion per year in building genuinely affordable homes to rent and buy in England every year. Action on reducing consumer energy bills also features across the three manifestos.
Provide an effective benefits system
The Conservatives, for the first time in some while, break with the consensus on pensions by proposing replacing the triple lock with a double lock after 2020 (getting rid of the 2.5% minimum; leaving just earnings or inflation). They also will consult on means-testing Winter Fuel Payments (WFP) to provide more money for social care.
Labour and the Lib Dems both would stick with the triple lock but the Lib Dems would withdraw WFP from higher-rate taxpayers. On working-age and disability benefits, the Conservatives commit to making no more changes, while Labour and the Lib Dems would like to reverse many if not all of them. Only the Lib Dems suggest unfreezing annual increases in working-age benefits. JRF’s modelling showed that the freeze erodes living standards in the long term and is especially acute when prices are rising, as they are now.
The fiscal implications of the differences between the parties on benefits and pensions are already resulting in heated debates and will continue to after the election, as the proposed changes are implemented.
Adult skills, including literacy, numeracy and digital, are highlighted in JRF’s strategy as needing a boost in funding and strategic terms. The importance of improving vocational education in the UK is recognised across all three manifestos. The Conservatives propose new Institutes for Technology, the Lib Dems a national skills strategy and Labour a ‘cradle to grave’ National Education Service.
In terms of schools, the Conservatives focus on continued structural changes including greater selection, while Labour look to invest to reduce class sizes. JRF’s strategy highlights the prime importance of getting the best teachers working in schools with the largest numbers of children in poverty.
I’d expected there to be more about the role of families across the manifestos. In JRF’s strategy, we highlighted the need for support and services for families to be rationalised and co-ordinated in local areas and for major, long-term reforms of childcare support to be put into place. The Lib Dems propose setting up a ‘Family University’ to provide parenting advice and guidance, and they and the other parties look to extend and broaden free childcare places.
In terms of more extreme issues affecting people and families, all three parties commit to ending rough sleeping – Labour by 2022, the Conservatives by 2027 and the Lib Dems don’t set a date. In JRF’s strategy, we recommend the rollout of ‘Housing First’ for homeless people and this gets support from the Conservatives and the Lib Dems.
Deliver inclusive growth
An economy that works better for people and places in poverty is fundamental to JRF’s strategy. Perhaps not surprisingly, it is also at the core of the manifestos. All three seek to continue to devolve powers over economic development and skills policy to city regions and local areas so that policy-making is closer to those who should benefit from it. The Conservatives discuss two funds – a £23 billion National Productivity Investment Fund and a new UK Shared Prosperity Fund (recycling EU structural funding post-Brexit); Labour a £25 billion a year National Transformation Fund and the Lib Dems £100bn of structural investment, including a British Housing and Infrastructure Development Bank.
Do these add up to a strategy to solve poverty?
The ingredients for solving poverty – as set out in the JRF five-point plan – all feature to varying degrees in each of the manifestos of the Conservatives, Labour and the Liberal Democrats.
Devolution, major investment in struggling areas of the country, raising minimum wages, building more homes, reducing energy bills and improving vocational and adult education provide common ground. Differences in tone and content exist on these too but the real battle is likely to continue to be social security, with the Conservatives opening up a new front on pensions and WFP. Issues of intergenerational fairness therefore look set to take centre stage as the UK prepares itself in earnest after the election to leave the EU.
While all parties also commit to action on child poverty specifically, we know that poverty is a problem at all ages and costs the country £78 billion every year in lost potential and extra spending on services. With budgets set to be tight for some time yet, it’s a cost the UK can ill afford.
Whoever wins, there is an opportunity for the new Government to put serious energy into a bold programme of economic and social reform. Tackling the deep-rooted drivers of poverty will be a challenge, but getting to grips with them to create a more prosperous society is a prize worth pursuing.