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Employers urged to share in work of alleviating poverty

01 November 2013


WORK is not a cure for poverty in Britain, which remains a "deeply divided" country, in which dis­advantage still strongly shapes life chances, the Social Mobility and Child Poverty Commission reported last month. 

The reportState of the Nation 2013is the first annual report on the Commission, established by the Government last year. The Com­mission is chaired by Alan Milburn, who served in the Cabinet of the previous government. 

Although the number of children in workless households has fallen by 15 per cent since 2010, the report argues that "child poverty is over­whelmingly a problem facing work­ing families". Two-thirds of poor children are now in working house­holds. The authors suggest that "a comprehensive approach to tackling in-work poverty is the missing piece of the Government's policy jigsaw."

Responding to the report, the chief executive of the Children's Society, Matthew Reed, said that families were being "forced to make harsh choices between heating their home and putting food on the table for their children. Rocketing fuel and food prices are outstripping pay as the minimum wage hits its lowest point for a decade this month."

The report warns that "the taxpayer alone can no longer afford to shoulder the burden of bridging the gap between earnings and prices", and calls on employers to "step up to the plate by providing higher minimum levels of pay and better career prospects, enabled by better skills". It also calls on the Government to raise the minimum wage.

The director for employment and skills at the Confederation of British Industry, Neil Carberry, said that improving routes to high-skilled and better-paid work would "come in part as growth returns and business investment picks up", but "we also need to make sure people have ways to build up their skills throughout their careers, including by boosting 'learn while you earn' vocational opportunities. Sim­plifying the apprenticeship system and making it more responsive to business needs will also help."

Mr Carberry argued that "a sectoral approach to setting a higher minimum wage would be un­­workable, because not all companies working in the same sector operate on the same margins. It would hit smallest companies the hardest. The best way to raise living standards is by first securing sustainable growth, which will then lift wages."

The Commission praises the Government for sticking to the previous government's commitment to eliminating child poverty by 2020, and acknowledges the "strong headwinds" of the financial climate. It welcomes the "energetic focus
on school reform", and suggests
that the Universal Credit could be "trans­formative" in encouraging people to work. Total employment is, it notes, at the highest level ever recorded.

It concludes, however, that the Government has been "too slow to act" on youth unemployment (one fifth of 18-to-24-year-olds are not in full-time education or em­­ploy­ment), and urges ministers to ensure "a fairer intergenerational share of the fiscal consolidation pain", noting that pensioners have been favoured over their children and grandchildren. Pension costs are going up by 17.5 per cent during the course of this Parliament, a sum equivalent to more than half of the savings from welfare reform made to 2014/15.

The conclusion of the report is that the country is not on track to meet its child-poverty target, which will be missed by "a considerable margin". Social mobility "could go into reverse", it warns.

The authors note that "the biggest taboo for public policy - parenting - has been left largely untouched, even though what parents do is the biggest factor in determining a child's life chances."

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