Rishi Sunak facing probe over use of poverty statistics

Comments came after warning from statistics watchdog

Andrew Woodcock
Political Editor
Saturday 17 July 2021 19:24
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Rishi Sunak says income inequality and poverty has fallen in recent years

Chancellor Rishi Sunak has been reported to the UK’s statistics watchdog over Labour claims he misled the public by saying the number of people in poverty is falling – at a time when internationally recognised measures show it has risen by 1.5 million under Tory rule.

Shadow chief secretary to the Treasury Bridget Phillipson said the “cowardly” chancellor was corroding public trust by trying to cover up the truth on “appalling” inequalities which have seen the numbers of children in poverty rise to 4.2 million.

Boris Johnson has been repeatedly rapped over the knuckles by the watchdog over his claims that poverty has fallen under the Tories, with Office for Statistics Regulation chief Ed Humpherson issuing a formal warning to Downing Street only last month that the prime minister’s cherry-picking of statistical measures was getting in the way of public understanding of the problem.

The row arises from the government’s break with the practice of previous administrations and other countries which have used measures of “relative poverty” to establish how many of their citizens are deprived of the living standards generally enjoyed by those around them.

Instead, Tory-led administrations have increasingly focused on “absolute poverty”, which measures real incomes compared to a fixed date in the past and tends to show falling levels of deprivation as societies get generally richer – except in times of recession.

Only days after Mr Humpherson’s letter, Mr Sunak repeated the PM’s claim in a TV interview on 8 July in which he referred to falling “poverty” without making clear that the claim was correct only on the absolute measure.

Defending his plan to cut £20 a week from universal credit payments to poorer households from September, the chancellor cited the record of the Conservative government in ensuring that “the number of people in poverty had fallen” in the years ahead of the coronavirus pandemic.

In fact, the proportion living in relative poverty rose steadily in the years before Covid from 15 to 18 per cent between 2012 and 2020 before housing costs are taken into account and from 21 to 22 per cent after housing costs. By contrast, the absolute poverty level fell from 16 to 14 per cent before housing costs and 22 to 18 per cent after housing costs.

In her letter to the UK Statistics Authority, seen by The Independent, Ms Phillipson also raised concerns about comments made in the House of Commons by work and pensions minister Will Quince, who cited absolute poverty figures as proof that the country was in a “strong position” before the pandemic, without pointing out that relative poverty measures gave the opposite message.

“The chancellor failed to clarify which poverty measure he was using, while the minister’s use of the ‘absolute poverty’ measure masks the true reality of poverty in the UK and risks misleading the public on this issue,” Ms Phillipson wrote.

“Internationally the accepted way to measure poverty is by using the ‘relative poverty’ measure. Since the Conservatives came to power in 2010, we have seen an increase of 1.5 million people who live in relative poverty, after housing costs, across the country. The number of children living in relative poverty has been steadily rising over recent years, with the figure standing at 4.2 million in the latest data.

“These figures paint a very different picture of the government’s record on poverty than claimed by the chancellor.”

She also blasted Mr Sunak’s claim in the same interview that inequality was falling before the pandemic, pointing to estimates from the Household Finances Survey that suggest it rose steadily between April 2019 and March 2020.

Ms Phillipson told The Independent: “The government’s record on child poverty in this country is appalling. But rather than fix the problems they run away from the truth. It’s cowardly, and it corrodes trust. They should focus on making work pay for families, not on dodging difficult questions.”

Tony Blair enshrined both absolute and relative measures in the official metrics for judging progress on his target of abolishing child poverty, with both indicators having to fall in order for the government to claim success.

But Iain Duncan Smith led an assault on the relative measure as work and pensions secretary, claiming that factors like family breakdown, workless households and educational attainment were better ways of judging a child’s life chances. His Welfare Reform and Work Act in 2016 ditched Blair’s targets and indicators, removing relative poverty from its central role in the government’s methods for judging its own success.

Anti-poverty campaigners regard both absolute and relative measures of poverty as useful, but note that it is impossible to see from the absolute figure whether disadvantaged individuals and families are falling further behind the rich.

The independent Joseph Rowntree Foundation (JRF) uses the relative measure after housing costs as its headline figure for understanding what is happening with poverty.

“JRF defines poverty as when someone’s resources are well below what is enough to meet their minimum needs,” explained the think tank’s deputy director of evidence and impact Peter Matejic.

“Relative poverty is defined as below 60 per cent of average incomes in any given year, whereas absolute poverty is defined as 60 per cent of incomes from a specific year, currently 2010/11.

“Relative poverty is therefore able to measure whether people on lower incomes are catching up with those on higher incomes, and whether or not they are benefitting from overall economic growth. Absolute poverty measures when people on lower incomes see their incomes grow faster than the cost of living even if they are falling even further behind people higher up the income scale.”

The Treasury declined to comment on Ms Phillipson’s letter.

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