Gordon Brown on the Tory lies about poverty

In a speech to the Child Poverty Action Group on 11 November 2015, former Labour leader Gordon Brown said that unless George Osborne completely abandoned his tax credit cuts, he would push child poverty to its highest level for 50 years. Cutting tax credits was a mistake as profound as the poll tax, he said.

This is the Guardian's summary of Brown's speech.

Even a phased in or watered down version of tax credit cuts will condemn Britain to higher levels of child poverty than at any time in fifty years and what is ‘government induced poverty’ will leave us a more divided, more polarised, harsher, ‘two nations’ Britain, inequality set to rise faster than anywhere in the world.

Because the Tory analysis is so fundamentally wrong, a mistake on a par with the poll tax and far worse than the Bedroom Tax - the impact of the cuts cannot be massaged or phased as if we can soften the blow: even a modified version will destroy jobs, stunt children’s development and impoverish hard working families ...

Marginal changes that massage the cuts will not work: root and branch surgery on the proposals is required.

There will be under the Conservatives more child poverty now than in the Thatcher years, creating a Britain more divided, more stratified, more polarised and more segregated, in which the advances made in thirteen years of Labour government are to be reversed in just five years from now to 2020.

The two nations Disraeli feared are now not only with us: over the next five years, we will see each of the nations driven further apart from each other. And the greatest sadness of all is that this is all avoidable.

Brown also used his speech to accused the Tories of peddling what he described as eight “fictions” about poverty. Here they are.

1 - “Most poor people are lazy”. In fact, Brown said, most people living in poverty are living in working households.

While, according to one opinion poll, people believe 40 per cent of the welfare state budget goes to those registered unemployed, it is only 1.5 per cent (and even if we include disabled and single parents who stay at home to bring up their children it is only 8 per cent).

2 - “Most children who are poor are poor because their parents don’t want to work”. In fact, Brown said, poor children are much more likely than not to be living in working households.

An astonishing high number of poor British children – two out of every three – live in a family where at least one adult works. Indeed, 75 per cent of these children are in working families where the main breadwinner works all the hours he or she can.

3 - ‘People are poor because they live chaotic lives.” In fact, Brown said, the biggest group of families in poverty are “traditional” families.

The biggest group of families in poverty is the country’s traditional families – working single earner couples – with the father at work, mother at home doing unpaid work bringing up their children in the home.

4 - “Globalisation allows young people to escape poverty.” In fact, Brown said, “millennials” are the new poor.

The new face of twenty first century poverty, the new poverty generation are the millennials – young people in their twenties, including young couples whose income from work is low and stagnating when their rents and living costs are so high – who fall into poverty when they have children ... Even if you are young, aspirational and hard-working, with a get-up-and-go attitude, you will not necessarily get on in today’s Tory Britain.

5 - “Child benefit encourages people to have children”. In fact, Brown said, child benefit only covers a small part of the cost of having a child, and is becoming considerably less generous.

Child benefit which paid for 26 per cent of a first child’s essentials in 2010 will cover 19 per cent in 2020. For the second child the respective figures are 18 per cent falling to just 13.5 per cent. Quite simply, child benefit in itself cannot contribute enough to the costs of a child and is probably worth only half of what it was originally intended ...

Britain’s own new two child policy – cutting children’s benefit off after the second child – is of course different from China’s. In China all families are hit equally: in Britain it is the already poor who are hit further.

6 - “People get stuck with low pay because they do not try hard enough to get better jobs.” In fact, Brown said, the problem with low pay was structural, not cyclical; there has been a permanent shift to a low-wage economy.

The problem that Britain has more low paid jobs proportionately than most advanced countries – is not a temporary, post-recession, cyclical problem but more akin a long-term structural problem rooted in the decline of manufacturing and heavy industries, the exposure of the British economy to global competition and the scale of technological change which has destroyed or deskilled thousands of jobs ...

Instead many of the low paid – half of them are in social care, retail or hospitality – want to work longer hours to make ends meet but no matter how much they want to do so they cannot.

7 - “Increasing the minimum wage will make up for the tax credit cuts.” It won’t, said Brown.

No matter how generous a minimum or even living wage is, it has to be complemented by tax and benefit support if we are not to leave millions of working families in poverty ..

It was not an accident that the minimum wage and tax credits were introduced together. If tax credits had been introduced without the minimum wage, then we would indeed have been subsidising employers to pay their workers less. But a minimum wage without tax credits cannot take full account of the family circumstances and in particular the needs of children.

8 - “One group pays money into the welfare state and another group takes money out of it.” In fact, said Brown, we all benefit from welfare spending some of the time.

From time to time, almost every family depends on the Welfare State and that we are not a nation permanently divided between the contributors and the claimants or as Tory propaganda ‘strivers and skivers’. As John Hills of the LSE has shown, the bulk of Welfare State spending goes to health (£4,000 per family), education (£2,800 per family) and pensions (£2,600 per family).