Living standards· Inequality & poverty· Welfare Half time The UK’s commitment to halve poverty by 2030 18 September 2023 Adam Corlett On 18-19 September, representatives from around the world – including the Deputy Prime Minister Oliver Dowden and the Foreign Secretary James Cleverly – will meet for a UN summit on the Sustainable Development Goals (SDGs). These goals are not just about development in poorer countries: the targets and the discussions around this summit have relevance for progress within the UK too. In particular, it may be a surprise to many that the Government is committed to halving UK poverty by 2030. Domestically, in contrast, there is strikingly little debate about reducing poverty. This short report explores how we might start to bridge that rhetorical gap, turn around an outlook of rising poverty, and perhaps even meet our SDG commitments. The UK has committed to halving poverty, among other Sustainable Development Goals The SDGs were adopted in 2015, with leaders including then Prime Minister David Cameron declaring collectively that “On behalf of the peoples we serve, we have adopted a historic decision on a comprehensive, far-reaching and people-centred set of universal and transformative Goals and targets. We commit ourselves to working tirelessly for the full implementation of this Agenda by 2030.” Clearly, the reduction of extreme poverty, hunger, and a lack of safe drinking water in countries much poorer than the UK is critically important. But the SDGs also present shared goals for progress within richer countries. A particularly significant and challenging target relates to UK poverty. SDG target 1.2 commits the UK to “by 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions”. And we are now over halfway through the SDGs’ 2015 to 2030 lifespan. But we are not on track to halve poverty… Figure 1 shows the history of UK absolute poverty (the proportion of people living below 60 per cent of the 2010-11 median household income, after housing costs, adjusting for inflation). It also shows what would be needed to halve that measure of poverty by the end of this decade, and our modelled projections for that period (albeit with very large uncertainty out towards 2029-30). Against a fixed poverty line, poverty declined between 2015-16 and 2020-21, from 20 per cent to 17 per cent – almost on track to halve by 2030 – in part due to extra welfare support in 2020-21. But we project that poverty has since been edging upwards as a result of the energy price shock, the removal of temporary pandemic support, ongoing welfare cuts (such as the two-child limit and frozen housing support), rising housing costs and the overall weak economic outlook. In 2024-25, for example, the number of people in poverty on this measure is projected to rise by 300,000. Overall, given current economic forecasts and stated government policies, absolute poverty is projected to be higher in 2029-30 than in 2020-21. The rate is projected to be lower in 2029-30 than in 2015-16, but by only 8 per cent (or around 300,000 people, accounting for population growth) rather than the cut of over 50 per cent (or a fall of 5.9 million people) that the SDG target 1.2 implies. Meanwhile the poverty rate for children is currently projected to have actually risen slightly from 27 per cent to 28 per cent of children, with the reduction in absolute child poverty between 2015-16 and 2020-21 being entirely undone. Figure 1: The UK is not on track to halve absolute poverty by 2030 Changes in economic forecasts for the second half of this decade could easily alter this long-term, uncertain outlook; as could major policy changes. But at present, the UK is nowhere near on track to meet its poverty reduction commitment, or even put in a creditable performance, and with each passing year the speed of change that would be required to meet the target increases. It should be noted that halving relative poverty (whereby the poverty line should grow over time as the country becomes more prosperous) would be an even more stretching goal. (At present, the UK’s SDG data tracker includes only relative poverty, but this is not a reflection of any political choice.) Halving relative poverty compared to 2015 would require this form of inequality to fall to levels even lower than existed in the 1960s and 1970s – before the big inequality rise of the 1980s – and lower than rates of relative poverty in Norway for example. The easier – but far-from-easy – target of halving poverty against a fixed real line would therefore be more credible. There was a time when it was assumed that aspiring to simply reduce absolute poverty would not be stretching enough, given the impact of steady economic growth, but the UK’s economic experience over the past 15 years or so has lowered expectations. …and indeed there is no strategy for reducing poverty and destitution In contrast to our nominal commitment on the world stage, domestically the UK is clearly not really committed to halving poverty at present. If ministers were asked “does the government intend to at least halve poverty by 2030?”, it is questionable that they would both be aware of the SDG target and willing to say “yes”. This can be seen in the lack of current UK-wide poverty goals, but also in the current discourse ahead of the next election. Look at trends in food insecurity, for example. According to The Food Foundation, the proportion of food insecure households rose from around 7 per cent (1-in-14) in mid-2021 to 17 per cent (1-in-6) in mid-2023. Measures of income-based poverty can sometimes sound a little academic, but the data on food insecurity in Figure 2 reflects the fact that many people are literally going hungry. A debate about how to bring those numbers down would therefore be warranted: lower energy prices, falling food inflation, and growing real pay will help, but given that our projections point to falling average real incomes for lower-income households in 2024-25 (due in part to the end of Cost of Living Payments), we should not bank on food security improving rapidly. Remarkably, however, there is currently more discussion about whether there should be new working-age benefit cuts than about the high levels of food insecurity or – to give another example – the record highs of over 100,000 English households and 130,000 children living in temporary accommodation. Figure 2: The prevalence of food insecurity has more than doubled since 2021 If there were a desire to target lower poverty across the UK, the SDG goal would be a reasonable one The disconnect, then, between the SDG poverty goal and current UK debate is large. But is not inconceivable that the SDG goal could rise in prominence. Canada offers a strikingly different and clearer approach. In 2018 it produced a Poverty Reduction Strategy, including an official poverty line and targets to reduce poverty by 20 per cent by 2020 and by 50 per cent by 2030 relative to 2015 – explicitly aligned with the first SDG. (The poverty measure itself is mostly ‘absolute’ but may change somewhat over time as views about people’s basic needs evolve.) At least halving absolute poverty by 2030 would be challenging, but not unthinkable. For children (and ignoring future data revisions), it would mean reducing the rate to around 13 per cent or below (or 9 per cent before housing costs) by 2029-30. For comparison, Scotland is aiming for under 5 per cent by 2030-31, which is also what the UK Child Poverty Act previously envisioned for 2020-21 (before housing costs), and an absolute poverty rate for children of 13 per cent in 2029-30 would be higher than the recent pensioner poverty rate of 12 per cent (i.e. hardly fanciful). If absolute poverty was used as the SDG measure – as illustrated above – then it would be affected both by inequality and by economic growth, and would therefore be a goal with a broader political consensus than relative poverty. (Relatedly: our Economy 2030 Inquiry is setting out policies to tackle the UK’s twin challenges of low growth and high inequality.) Delivering on the SDG poverty goal would likely also help the UK achieve other SDG targets, such as ending hunger and seeing the incomes of the bottom 40 per cent grow faster than the average. And although it is quite possible for politicians to ignore all of these international goals, despite the commitments of previous Prime Ministers, this is not ideal and it will prove at least a little bit embarrassing for the UK to completely miss its poverty target – particularly if other rich countries do much better. While 2030 may previously have seemed to be far in the future, achieving targets by 2029-30 could well be the job of the next parliament alone. Regardless of whether the Government adopts formal poverty goals again, the UN summit is an extra reminder that the UK should get serious about reducing poverty and destitution.  It could be argued that meeting targets in the UK’s financial year 2030-31 would be consistent with delivering the SDGs “by 2030”, but we assume a conservative reading here.  For poverty stats wonks, there is the further question of how absolute poverty should be defined. In Figure 1 (and in previous reports), we have focused on disposable incomes after housing costs: the logic being that a pensioner who owns their home outright should be considered less at risk of poverty than a pensioner who has to rent, for example, even if the two have the same income before housing costs. However, the DWP uses absolute poverty before housing costs as a departmental performance metric; and in the 2000s it was decided that the Government’s child poverty targets would be assessed using incomes before housing costs. On the other hand, there have been calls to exclude more expenses – such as childcare and mortgage capital repayments – from disposable income; while the calculation of ‘imputed rents’ (for home owners) represents an alternative way of dealing with housing costs. These questions, however, are secondary to the arguments made in this spotlight.  Remarkably, a halving was achieved by 2020 – although poverty is expected to have worsened since then.