Series: CASE Studies on Poverty, Place and Policy

 

Poverty is still a real issue within Britain today and this essential series provides evidence-based insights into how communities and families are dealing with it.

Published in conjunction with the Centre for Analysis of Social Exclusion (CASE) at the London School of Economics, this series draws together fresh research and sheds important light on the impact of anti-poverty policy, focusing on the individual and social factors that promote regeneration, recovery and renewal.

CASE Studies on Poverty, Place and Policy

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This chapter is about New Labour’s efforts to reverse the long-running negative impact on urban conditions of concentrated poverty within deprived areas and to break the connection between poor social and physical conditions. It comprises three parts:

  1. the situation New Labour inherited and the development of the National Strategy for Neighbourhood Renewal;

  2. the measurable results of the strategy; and

  3. the relationship between wider urban, regional and housing policies and the more focused neighbourhood renewal agenda.

We conclude by assessing the likelihood of future progress.

The multiple problems of poor neighbourhoods are nothing new and have been the focus of urban policy interventions in the UK since the turn of the 20th century (Atkinson and Moon, 1994; Hill, 2000). However, by 1997, there was evidence that some of these problems were getting worse. Divisions between declining cities and industrial areas and small towns and cities and rural areas had been widening for several decades, while the 1980s saw a particular increase in intra-urban polarisation, with growing contrasts between poorer and more affluent electoral wards within cities (Hills, 1995). There was increasing concern about so-called ‘worst neighbourhoods’, with concentrations of poverty and worklessness and the associated problems of high crime and disorder, diminishing and dysfunctional services, empty housing and environmental decay.

New Labour responded in 1997, asking its newly formed Social Exclusion Unit (SEU) to produce a report on neighbourhood problems. The report, Bringing Britain together (SEU, 1998c), identified approximately 3,000 neighbourhoods with common problems of poverty, unemployment, poor health and crime. Public services in these neighbourhoods tended to be less good, with a higher proportion of schools failing their OFSTED inspection and fewer general practitioners (GPs), many of them in substandard premises.

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Labour signalled that education was a policy priority well before the 1997 General Election. In his now famous Labour Party Conference speech in 1996, Tony Blair announced that the three highest priorities in government would be ‘Education, education, education’. In December 1996, Blair outlined Labour Party thinking on education policy; themes, which, as we shall see, have continued to be important since 1997:

I believe there is the chance to forge a new consensus on education policy. It will be practical not ideological. And it will put behind us the political and ideological debates that have dominated the last thirty years. The foundations of the consensus are clear. Early support for children under the age of five. Primary schools delivering high standards of literacy and numeracy. Rigorous assessment of pupil and school performance, and action based upon it. Improved training and qualifications for teachers, especially Heads. Early intervention when things go wrong. Support from all sections of the community to ensure that all our children are given the best possible start. And we must never forget that education is not a one-off event for the under 18s. The new consensus must be based on wide access to higher education and continual opportunities for all adults to learn throughout life. (Tony Blair MP, Speech given at Ruskin College, Oxford, 16 December 1996)

Education also featured in both the 1997 and 2001 election pledges. In 1997, as one of the five ‘early pledges’, Labour promised to cut class sizes to 30 or under for five-, six- and seven-year-olds by using money from phasing out the assisted places scheme.

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Labour’s strong focus on employment is rooted firmly at the historical heart of the party. Full employment is still clearly an aspiration. However, New Labour’s approach to employment policy represents a departure from previous Labour governments: both the approach to achieving full employment and arguably the motivation have changed. After the high levels of unemployment in the 1980s and early 1990s recessions, Labour was cautious about pledging a commitment to full employment. However, shortly after Labour came to power, a new definition was put forward. In a speech launching his first pre-budget report in November 1997, Chancellor Gordon Brown stated that:

We need a new approach – Employment Opportunity for All – to face the challenges of today’s dynamic labour market, creating a modern definition of full employment for the 21st century. (HM Treasury, 1997)

The emphasis, therefore, shifted from employment for all to employment opportunity for all.

Brown identified five vital elements needed to meet the new challenge:

  • a framework for macroeconomic stability;

  • a flexible and adaptable labour market, underpinned by minimum standards;

  • skilled and adaptable people;

  • policies which encourage people to move from welfare to work; and

  • a tax and benefit system that makes work pay.

One of the main departures is the greater emphasis on supply-side policies; for example, helping people become more employable, search for work, equip themselves with marketable skills, provision of financial incentives to seek and remain in work and more conditions placed on many out-of-work benefits with greater coercion to find work. In the past, Labour placed more emphasis on demand-side policies, viewing unemployment as a problem of lack of demand which could be stimulated through a variety of policies.

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The New Labour party elected to government in 1997 came to power inheriting a legacy of ethnic inequalities in housing, education, employment, health and criminal justice outcomes. The early research evidence from the First Survey of Ethnic Minorities carried out in the mid-1960s documented racialised disadvantage and discrimination in the lives of all minority ethnic groups, most of whom had arrived from Britain’s colonial territories to fill job vacancies in the post-war period (Daniel, 1968). Since the mid-1970s, however, while the broad pattern of ethnic inequalities has persisted, there has also been considerable differentiation, with those of Pakistani and Bangladeshi origin, and to a lesser extent those of black origin, generally faring worse than those of Indian and Chinese origin (see, for example, Smith, 1977; Jones, 1993; Modood et al, 1997). While the earlier period provided unequivocal evidence of both direct and indirect racial discrimination, the empirical research has additionally, over the intervening years, accumulated to reveal a complex interplay of socioeconomic, demographic, institutional, structural and cultural factors as contributing to the less favourable outcomes for minority ethnic groups.

In its first period of office, New Labour’s policy response to ethnic inequalities was framed by the public inquiry into the Metropolitan Police Service’s investigation of the racist murder of black teenager Stephen Lawrence in 1993. The government is to be applauded for fully endorsing the inquiry team’s findings that ‘institutional racism’ had played a part in the flawed police investigation, and that it was endemic to public organisations such as the police, schools and government departments.

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One of the legacies of the Thatcher years was the marked shift towards greater inequality. While average incomes grew rapidly during the 1980s, the benefits were spread very unevenly. Between 1979 and 1996/97, the median income of the richest 10% increased by over 60% in real terms, but that of the poorest 10% rose by just 11% (or fell by 13% if incomes are measured after housing costs). Although inequality did stop rising during the recession of the early 1990s, it started to rise again in the mid-1990s. When Labour came to power in 1997, the distribution of incomes in Britain was more unequal than at any time in recent history. The increase in inequality over the preceding twenty years was also exceptional in international terms.

Previous research suggests a number of factors contributed to rising inequality (Hills, 2004a, ch 4):

  • a dramatic rise in the dispersion of earnings between low- and high-skilled workers, which is widely attributed to technological changes favouring those with greater skills;

  • a large increase in the proportion of workless households, even after individual employment rates returned to the levels they were at in the late 1970s;

  • the increasing importance of other sources of income, such as occupational pensions and income from savings and self-employment, which are even more unequally distributed than earnings; and

  • tax and benefits policies that did not dampen the rising inequality in market incomes: uprating benefits in line with prices, rather than earnings, meant that a growing minority fell gradually further behind the rest of the population, while discretionary changes in taxes during the 1980s favoured the rich.

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The Labour government that took office in 1997 inherited levels of poverty and inequality unprecedented in post-war history. More than one in four UK children lived in relative poverty, compared to one in eight when Labour had left office in 1979 (DWP, 2004a). Poverty among pensioners stood at 21%1. Income inequality had widened sharply: in 1979 the post-tax income of the top tenth of the income distribution was about five times that of the bottom tenth; by the mid-1990s that ratio had doubled (Hills, 2004a, Table 2.5).

In opposition, the new government had been careful to avoid major commitments to addressing social and economic disadvantage. In practice, it has implemented a broad and ambitious social policy programme, taking on a wide range of social ills, including child poverty, worklessness, area and neighbourhood deprivation and inequalities in health and educational attainment. How much has this programme achieved? Shortly after the election, one of New Labour’s prominent strategists had challenged “the doubters” to “judge us after ten years of success in office. For one of the fruits of that success will be that Britain has become a more equal society” (Mandelson, 1997, p 7). There is some time to go before that particular deadline, but as Labour nears the end of its second term in office, this seems a good moment to take stock. This volume aims to assess the impact of government policies since 1997 on poverty, inequality and social exclusion. Is Britain indeed becoming a more equal society than it was when Labour was elected?

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New Labour, poverty, inequality and exclusion
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This major new book provides, for the first time, a detailed evaluation of policies on poverty and social exclusion since 1997, and their effects. Bringing together leading experts in the field, it considers the challenges the government has faced, the policies chosen and the targets set in order to assess results. Drawing on research from the Centre for Analysis of Social Exclusion, and on external evaluations, the book asks how children, older people, poor neighbourhoods, ethnic minorities and other vulnerable groups have fared under New Labour and seeks to assess the government both on its own terms - in meeting its own targets - and according to alternative views of social exclusion.

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