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Poverty in the UK: radical social re-engineering

Summary:
There was a revealing exchange between Krishnan Guru-Murthy and a Treasury minister after Channel 4 led with the UN Special Rapporteur’s report on UK poverty. After the minister trotted out various statistics about trends in poverty and inequality, Guru-Murthy said something like you have just proved the report right when it says the government is in denial. The Treasury minister was right about some of the things he said: the poverty statistics are not getting noticeably worse and might even be getting better if you choose your dates carefully, and increases in the minimum wage have helped the poor (see the IFS here). But Guru-Murthy was also right. Under the Labour government the aim was to reduce poverty by a significant amount, and if poverty had only fallen by a small amount that was

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There was a revealing exchange between Krishnan Guru-Murthy and a Treasury minister after Channel 4 led with the UN Special Rapporteur’s report on UK poverty. After the minister trotted out various statistics about trends in poverty and inequality, Guru-Murthy said something like you have just proved the report right when it says the government is in denial. The Treasury minister was right about some of the things he said: the poverty statistics are not getting noticeably worse and might even be getting better if you choose your dates carefully, and increases in the minimum wage have helped the poor (see the IFS here).

But Guru-Murthy was also right. Under the Labour government the aim was to reduce poverty by a significant amount, and if poverty had only fallen by a small amount that was regarded as a failure. In contrast, the Conservatives have no interest in trying to reduce poverty, and many of their policies make poverty worse, and are expected to make child poverty noticeably worse. It is this change in attitude that is crucial.

Philip Alston’s report is very good, and I encourage people to read it. He makes an interesting argument that may surprise some people, but I think is correct. Here is a long quote.
“Although the provision of social security to those in need is a public service and a vital anchor to prevent people being pulled into poverty, the policies put in place since 2010 are usually discussed under the rubric of austerity. But this framing leads the inquiry in the wrong direction. In the area of poverty-related policy, the evidence points to the conclusion that the driving force has not been economic but rather a commitment to achieving radical social re-engineering. Successive governments have brought revolutionary change in both the system for delivering minimum levels of fairness and social justice to the British people, and especially in the values underpinning it. Key elements of the post-war Beveridge social contract are being overturned. In the process, some good outcomes have certainly been achieved, but great misery has also been inflicted unnecessarily, especially on the working poor, on single mothers struggling against mighty odds, on people with disabilities who are already marginalized, and on millions of children who are being locked into a cycle of poverty from which most will have great difficulty escaping.”

Blaming austerity for continuing poverty leads people in the wrong direction because it is too easily justified by ‘we had to take hard decisions’ and so forth. The key point is that the neoliberal Conservative party have no interest in making poverty reduction a major target, and their press backers have considerable interest in demonising the poor. That is not a partisan statement but a fact. For example raising the tax thresholds is not an efficient way of reducing poverty, because much of the benefits go to people who are clearly not poor.

There is another point worth exploring in that interview I noted at the beginning. Most people will be surprised to hear that aggregate poverty is not getting noticeably worse when it seems like it is. I think this paradox can also be explained by a feature of Conservative policy that Alston notes in that quote, and that is to destroy the state’s role as providing a safety net for the poor who fall on hard times, and indeed to often force them itself on to hard times. There may be a very limited role for benefit sanctions, but current policy has made them pervasive and downright cruel.

There is an obvious parallel here with immigration. In both cases the state is turned into a Kafka like organisation, that makes decisions that are not explained, are sometimes inexplicable and sometimes simply malicious. Getting bad decisions changed is costly and often requires help. There is a strong link between benefit sanctions and foodbank use. The Conservatives have known about this for some time but have done very little to change anything. And benefit sanctions are just one example. To quote the report once again.
“British compassion for those who are suffering has been replaced by a punitive, mean-spirited, and often callous approach apparently designed to instill discipline where it is least useful, to impose a rigid order on the lives of those least capable of coping with today’s world, and elevating the goal of enforcing blind compliance over a genuine concern to improve the well-being of those at the lowest levels of British society.”

There is so much more I could mention (about how disabled people are treated for example). But I will just make one final point. We have a profound change in UK policy that seems little noticed by much of the media, and it takes someone from outside to point it out.


Simon Wren-lewis
Professor of Economic Policy at the Blavatnik School of Government, Oxford University, and a fellow of Merton College. This blog is written for both economists and non-economists.

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