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Reversing the rising poverty tide requires fundamental change

Stewart Lansley 25/2/15
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Reversing the rising poverty tide requires fundamental change

Stewart Lansley is speaking at the launch of our election guide on the economy, in Birmingham on Thursday 26 February. You can download the guide here.

Poverty in the UK is at a thirty year high. Levels of deprivation are higher today than in the late 1990s, and in some respects, than in the 1980s. The number living in a damp home has almost doubled compared with 1983. Those who cannot afford to heat their home adequately has trebled since the 1990s. One-in-five children live in a home which is cold or damp; one-in-ten miss out on essential clothing like a warm coat; one-in-twenty households can't afford to feed their children adequately.

These are some of the key findings of the Breadline Britain study that has tracked poverty since 1983. Using four large scale surveys - in 1983, 1990, 1999 and 2012 - the research asks the public to define a minimum living standard below which nobody should fall. Based on public opinion, this is the nearest we have to a democratically defined poverty line. On this basis, poverty levels have doubled over the last three decades and stand at 30% today.

The findings of these surveys show conclusively that the rise in poverty is not explained by a sudden explosion of a culture of poverty, nor by out-of-control benefits as claimed by the government. Rather, it is down to a surge in the numbers of working poor and the shrinking of the share of the cake going to the bottom half of the labour force, with growing numbers at the mercy of low-pay and job insecurity.

Whoever forms the next government, poverty figures will continue to rise. While unemployment will go on falling, an increasingly polarised labour market, rising housing costs and a continuing squeeze on benefits will put further downward pressure on low incomes. Britain’s poorest fifth already have incomes that are well below their counterparts in other wealthy nations, 40% lower than in Germany and a third poorer than in France, for example.

The rising tide of poverty in Britain adds up to a serious failure of the economic, political and democratic system. Growing affluence is now, remarkably, associated with rising, rather than falling, poverty. Indeed, a high level of poverty is now endemic to the British economic model, driven by an increasingly hostile jobs market, punitive policies towards the poor themselves and an economic system that allows the richest to colonise a growing share of economic growth.

Thirty years ago Mrs Thatcher attempted to bury the issue by banning ministers and civil servants from using the ‘poverty’ word. Labour made tackling poverty a priority, but by allowing inequality to continue to rise, did so with one hand tied firmly behind its back. The coalition government has simply tried, unsuccessfully, to redefine it away. The reality for close to a third of the population is very different – a steady decline in housing and job opportunities and an unacceptably low living standard.

Reversing the rising poverty tide requires fundamental change. Tinkering is not enough. It means tackling core inequalities, a more progressive tax system bearing more heavily on the rich and a war on exploding personal and corporate tax avoidance. It requires a radical shift in the political mindset, one that stops pinning the blame on the poor themselves, that accepts that poverty is driven by an accumulated reduction in opportunities, pay and life chances.

It also means a very different economic model, with measures to boost the share of national income going to wages, to narrow the yawning pay gap between top and bottom and to close the gender pay gap by raising women’s wages. Achieving this requires much more than modest rises in the minimum wage and in the top rate of income tax. It means challenging corporate interests and reversing the sustained decline in workforce bargaining power.

Few of these measures are on the political agenda. The epoch-changing decision of the 1980s to take Britain down the market, union-busting, de-regulation road, with its disinvestment in public housing and rolling privatisation has weakened the productive base of the economy, spread social recession and plunged millions, unnecessarily, into poverty. Despite its evident flaws, the post-1980 model with its bias to capital and the upward transfer of wealth is still very much intact. Keynes’s warning during the slump of the 1930s of the continuing grip of old thinking, ‘practical men… are the slaves of some defunct economists’ is only too relevant today.

Stewart Lansley is the author (with Joanna Mack) of Breadline Britain: The Return of Mass Poverty, published by Oneworld. (https://www.oneworld-publications.com/books/joanna-mack-stewart-lansley/breadline-britain#.VOxV38-zWP_)

Register here to see our panel speak at our event in Birmingham on Thursday 26 February 2015.



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