BLAIR’S BRITAIN, 1997–2007
Page 66
Minister outside the House of Commons was made from a Peckham
housing estate, where he promised that under a Labour government
there would be ‘no forgotten people and no no-hope areas’.3 In August
1997 the creation of the Social Exclusion Unit was announced, with a
starting brief to examine school exclusions, rough sleeping, poor areas,
teenage pregnancy and sixteen-to eighteen-year-olds not in education
or training. At the Treasury, one of Gordon Brown’s first priorities was a
welfare-to-work programme: the windfall tax on privatised utilities –
the only major new source of funds available during the first two years in
office – was used to fund the New Deal for Young People and the New
Deal for Lone Parents. Brown was also keen to make sure paid work
made financial sense: on the day after the election he instructed civil servants to start developing plans for a tax credit scheme for the working
poor, formally announced in the March 1998 Budget as the Working
Families Tax Credit (WFTC). A commission to establish a starting level
for the minimum wage was also established in the first few weeks in
office.
Then in March 1999, at a lecture to commemorate William Beveridge,
Blair made his now infamous pledge, not just to reduce but to eradicate
poverty among children: ‘Our historic aim – that ours is the first generation to end child poverty forever . . . It is a 20 year mission, but I believe it
can be done.’4 Sources inside the Treasury suggest that not even the civil
servants who wrote the speech were expecting this and that it was a lastminute and unilateral decision taken by Blair. Certainly the assembled
13 Tony Blair, Speech at the Aylesbury Estate, Southwark, 2 June 1997.
14 Tony Blair, ‘Beveridge Revisited: A Welfare State for the 21st Century’, in Robert Walker
(ed.), Ending Child Poverty: Popular Welfare for the 21st Century (Bristol: Policy Press,
1999), p. 7.
academics and journalists were taken by surprise; Polly Toynbee of The
Guardian has since described the pledge as ‘astounding’.5 Where did this
announcement come from? Its timing coincided with the end of the commitment to stick with Conservative spending plans, but also with the
emergence of a growing body of evidence underlining the long-term
scarring effects of childhood poverty. Research results such as those
released by the Treasury at about the time of the Beveridge speech made it
clear that real opportunities of later success in education and the labour
market were vastly reduced for children growing up poor.6 This tied in
with a growing emphasis from Blair on the importance of individual
opportunity. In a pamphlet on the ‘Third Way’ in 1998, he had declared
the four values ‘essential to a just society’ to be ‘equal worth, opportunity
for all, responsibility and community’,7 and opportunity had since
become a government watchword. The pledge to end child poverty indicated a genuine commitment to giving disadvantaged children a fairer
start in life.
The child poverty pledge was followed up with concrete interim
targets. Successive budgets reformed the tax-credit and benefit system
and made it steadily more generous for families with children, for the
remainder of Labour’s first term and throughout the second and third
terms. There were also considerable increases in investment in services
for young children and in education. But while children were at the heart
of the government’s anti-poverty strategy, 1999 also marked the start of a
broader attack on social injustice. In September, the first in an annual
series of government audits of poverty and social exclusion indicators
was published: Opportunity for All.8 It promised an ‘integrated and
radical policy response’ to the combined problems of childhood deprivation, worklessness, health inequalities, fear of crime, poor areas, poor
housing, pensioner poverty, ill-health and isolation, and discrimination
on grounds of age, ethnicity, gender or disability. A raft of policies followed, of which the most significant are summarised here:9
15 Polly Toynbee, ‘Time to Talk the Talk’, The Guardian, 29 November 2002.
16 Centre for Analysis of Social Exclusion (CASE)/HM Treasury, Persistent Poverty and
Lifetime Inequality: The Evidence, CASE Report 5 and HM Treasury Occasional Paper 10
(London: London School of Economics and Political Science and HM Treasury, 1999).
17 Tony Blair, The Third Way: New Politics for the New Century, Fabian Pamphlet 588
(London: The Fabian Society, 1998), p. 3.
18 Department of Social Security, Opportunity for All: Tackling Poverty and Social Exclusion
(London: DSS, 1999).
19 For more detail, see John Hills and Kitty Stewart (eds.), A More Equal Society? New Labour,
Poverty, Inequality and Exclusion (Bristol: Policy Press, 2005).
• welfare-to-work programmes, the national minimum wage and taxbenefit changes favouring low-income families with children, both in
and out of work;
• investment in childcare and in nursery education for three-and fouryear-olds; in Sure Start programmes for under-fours in deprived areas;
and in longer and more generous maternity leave;
• substantial increases to education and health funding, including
changes to funding formulae in favour of poorer areas;
• ‘floor targets’ for achievement in employment, crime, education,
health and housing in the most disadvantaged areas, backed up with
serious funding through the National Strategy for Neighbourhood
Renewal and through a number of additional targeted programmes
such as Sure Start and the Excellence in Cities programme for schools –
the aim being to meet a pledge arguably even more ambitious than the
pledge on child poverty: ‘within 10–20 years, no-one should be seriously disadvantaged by where they live’;10
• education maintenance allowances, paid to those who remain in education between sixteen and eighteen, aimed at increasing the low educational achievement of young people from low-income households;
• Working Tax Credits for childless couples;
• improvements in benefits for disabled children and adults;
• for pensioners, an increase in the means-tested income minimum and
the extension of means-tested help higher up the income scale through
the Pension Credit; additional special measures including winter fuel
allowances, free eye tests, free TV licences and increased income tax
allowances;
• some action to reduce inequalities in outcomes between ethnic groups,
such as Ethnic Minority Achievement Grants to local authorities to
improve educational attainment.
The scope and scale of action outlined here is certainly very different
from anything that could have been anticipated from the election manifesto of 1997. Yet while some of the priorities continued throughout – for
instance, tax credits for families with children became more generous
each year right up to and including the Budget of 2007 – the final years of
Blair’s leadership can be seen as representing a third and more disappointing phase. While Blair described the 2005 Qu
een’s Speech as ‘quintessentially New Labour: economic prosperity combined with social
10 Social Exclusion Unit, New Commitment to Neighbourhood Renewal: National Strategy
Action Plan (London: Cabinet Office, 2001), p. 8.
justice’, the public sector reform agenda was given far greater emphasis
during the third term than any policies to tackle disadvantage. In May
2005 Blair used his first press conference after the election to argue that
‘our task is to deepen the change, accelerate reform and address head-on
the priorities of the British people in the NHS, schools and welfare
reform . . . [Reform] means driving innovation and improvement
through more diverse provision and putting people in the driving seat’;
something of a contrast to the Peckham speech of June 1997.11 Towards
the very end of his leadership, in April 2007, it was on public sector
reform, not social justice, that his close friend Lord Falconer said Blair
wished he had moved more quickly.12
A related point is that the agenda went just so far and no further. A
number of issues remained strictly off limits, even after the record
second-term landslide and the third-term victory, after which Blair
himself had nothing to lose. Non-disabled adults without children were
expected to work, with little patience (and falling benefits) for those who
found work difficult. Asylum-seekers (and their children) faced increasing exclusion, from benefits, from work, from local authority housing
and from education. But perhaps most striking is the issue of overall
income inequality: the focus remained clearly and explicitly on the situation and opportunities available to those at the bottom, and on the
income gap between the bottom and the middle. The incomes of those at
the top end of the distribution were never considered relevant. These
omissions are serious, and have resulted in a mixed record for Blair: he
leaves behind a country with less poverty, in which many people face
more promising opportunities than before, but one in which inequality
of outcome is greater than it has ever been, with consequences for the
next generation, and with implications for how we see ourselves as a
society. In this chapter we look at changes during the Blair years to
income poverty and income inequality and at policies designed to
improve life chances through investment in early years services, education and health. For discussion of Labour’s broader record in addressing disadvantage in poor areas, ethnic inequalities and low political
participation, and its treatment of asylum-seekers, the reader is referred
elsewhere.13
11 Cited on the BBC News website, 12 May 2005, http://news.bbc.co.uk/go/pr/fr/-/1/hi/
uk-politics/4540723.stm.
12 Nicholas Watt and Patrick Wintour, ‘“He Has Proved Incredibly Resilient”’, interview
with Lord Falconer, The Guardian, 30 April 2007.
13 See relevant chapters in Hills and Stewart, A More Equal Society?
Poverty
Reducing both child and pensioner poverty was an important goal for
Labour under Blair, with a wide range of measures introduced to raise
income for each group. However, concern did not extend to the workingage population without children, and specifically those without work.
This section looks at what happened to levels of poverty for each of these
three groups in turn, and considers how far government policy can be
said to be responsible.
Children
Table 19.1 shows the change in the share of children living in poverty
between 1996/7 and 2005/6, the latest year for which figures are available.
Figures are given both before and after housing costs (BHC and AHC);
each measure has advantages, but the Blair government adopted the BHC
indicator as its measure of choice.
It is clear that there were substantial drops in child poverty over the
period as a whole, especially for households with at least one member in
work. These changes are particularly significant when one considers that
this is a relative poverty line, measured as a share of median income, and
the median itself rose rapidly over the period. Measures of material
deprivation show more striking improvements in real living standards,
even among those who remained below the poverty line: the share of the
income poor who said they were behind in paying bills fell from 41% to
31% between 2000 and 2004; while the share who could not keep their
home warm fell from 18% to 12%.14
However, progress was not sufficient for the government to meet
its first target of reducing relative child poverty by one quarter between
1998/9 and 2004/5. Furthermore, as table 19.1 also shows, much of the
improvement had been achieved by mid-way through the second
Labour term: between 2003/4 and 2005/6 the overall rate of child
poverty was in fact steady or even slightly increasing. It should be
noted that this disappointing result came as a surprise not just to
government, but also to researchers and commentators, who were
predicting right up to early 2005 that the target would narrowly be
14 Maxine Willitts, Measuring Child Poverty Using Deprivation Indicators, DWP Working
Paper 28 (London: Corporate Document Services, Department for Work and Pensions,
2006). Willitts uses a poverty measure of 70% of median income BHC.
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tables 5 and 6.
No
housing c
met.15 The flagship anti-poverty strategy, the tax credit programme, had
been made increasingly generous annually from its introduction in
1999, with a particularly sharp increase in April 2003 aimed directly at
meeting the 2004/5 goal. In 2005/6 £17 billion was paid out on tax
credits – around 1.5% of GDP.16 Let us consider both the contribution
of policy to the fall in child poverty witnessed in table 19.1 and the
explanation for the failure to meet the first child poverty target.
Labour’s child poverty strategy was based heavily on promoting
employment, through active labour market programmes such as the New
Deal for Lone Parents (and more recently the New Deal for Partners),