No progress in reducing poverty in Wales or the UK

The publication of the Social Metrics Commission 2019 report highlights how little progress has been made in reducing poverty since the millennium.

The publication of a new report by the Social Metrics Commission has made headline news across the UK. Their findings, in particular the finding that there are over 14 million people living in poverty across the UK, with over 7 million of these living in persistent poverty are shocking. But what does the report have to say about poverty in Wales, and what actions could we take to solve poverty?

The Social Metrics Commission

This is the second major report published by the Social Metrics Commission looking at the extent of poverty in the UK. Their first report, published in September 2018 set out to find a more accurate measure of poverty, drawing together the work of a range of experts and individuals. Their approach to measuring poverty differs from the more commonly used relative income measure of poverty (HBAI) in some important ways:

1. It seeks to more accurately calculate resources: The new measure includes the full range of resources people can draw on e.g. savings as well as earned income (salary) or income received through welfare payments.
2. It seeks to more accurately estimate of costs: The new measure includes an allowance for unavoidable costs such as housing and childcare, and the additional costs faced by disabled people. The current measure includes only some housing costs.
3. It seeks to measure the persistence of poverty: the new measure considers the length of time a family has lived in poverty, and the risks of a household falling into poverty. It also considers the factors that help or hinder people moving out of poverty, such as health conditions and qualifications.

The Social Metrics Commission’s findings in Wales

The first report published by the Social Metrics Commission in September 2018 found that 24% of people in Wales lived in poverty. This figure remains unchanged in their 2019 report and is also consistent with the figure obtained using the HBAI measure. There are some important differences when looking at different age groups, however.

The proportion of pensioners living in poverty in Wales has increased in the last twelve months. In their 2018 report, the Social Metrics Commission had found that just over 10% of pensioners lived in poverty. This has increased to 15% in 2019. Despite this increase the Social Metrics Commission figure of 15% is still 4% lower than the figure obtained through the HABI measure which stands at 19%.

The proportion of children and working age adults living in poverty have remained relatively unchanged at 32% and 24% respectively since the publication of the Social Metrics Commission’s 2018 report. As with the 2018 report the Social Metrics Commission’s work suggests that whilst HBAI may be relatively accurate in measuring working age poverty with the proportion living in poverty being the same under both measures, it may be underestimating the number of children living in poverty, with the HABI measure suggesting that 29% of children in Wales are living in poverty.

What can we do to solve poverty in Wales?

The report highlights, once more that poverty is not a problem that is going away in Wales. There are actions we can take however, to solve poverty. As the report makes clear, the drivers of poverty across the UK are a combination of high living costs and low income, either as a result of workers not earning a decent wage or through the social security system not providing people with enough income. It is by taking action to solve these root causes that we can ensure that the tide is turned on poverty.