Chill winds are sweeping Britain’s economy with a general expectation that poverty will increase in the coming years, and that poverty reduction targets will be missed. Alarm bells rang loudly after hints that the Government is considering changing the way it measures poverty. They wouldn’t just do this because unmet targets are embarrassing. Difficult times mean that politics in Britain has primarily become an exercise in allocating pain, not spreading butter. It may be tempting to just try to protect those with access to power, a voice, or those likely to vote because they still believe the status quo can work for them.
But this would be like applying sticking plasters to a breaking dam. Ignoring the 13.5 million people suffering below the poverty line wouldn’t just be immoral, it would be nonsensical. For two reasons, economic weakness has made tackling poverty more important, not less. Firstly, the solutions to Britain’s economic malaise require the inclusion of people on low incomes. Secondly, poverty in Britain is caused by a dysfunctional economy, and in this financial crisis, this underlying dysfunction is dragging down the living standards for growing numbers of people.
Why is solving poverty more important than ever?
If Britain is going to rebalance its economy to take advantage of new global opportunities in the way that the Government and business organisations like the CBI want, then our people and their skills will become more important determinants of growth. Some economists argue that because middle classes have become more educated, they are likely to provide fewer productivity gains in future. This means that improving poor peoples’ economic inclusion is even more important - a stable, decent standard of living is a precondition for realising potential.
Instead, increasing numbers of people are being subjected to the kinds of pressures and vulnerabilities that have existed at the bottom for years. The share of national income that goes to workers has not only declined inexorably during recent decades, but has kept falling during recession. This problem is affecting the majority of people in Britain as well as those below the poverty line. People are increasingly realising that while they’re working for the economy, the economy isn’t working for them.
This isn’t really new, it’s just worse than ever. UK economy has become supremely ineffective at including people. The proceeds of growth are not allocated where they are due. So as the numbers of those struggling with unemployment, underemployment and in-work poverty all rise, the gap between an "underclass" of the workless and millions more people in work will become more blurred. Now is the time to make common cause, to commit to tackling the underlying drivers of poverty, because it is more obvious than ever that doing so will benefit the majority. This is why a plan to come together to deal with the fallout of the economic crisis is an essential part of a bright, attainable vision of the future.
What needs to happen?
Firstly elites need to change the way they talk and think about poverty, being clear that it’s a problem for everyone. For most people, although extreme deprivation persists, poverty is decreasingly a question of ‘them’ and ‘us’.
Secondly, Britain needs big changes that work for the majority. Policymakers must make sure new forms of growth include society from the bottom up, and commit to reversing the rise of economic inequality that is making the financial crisis more painful for millions. And economic policy must focus on increasing the quality as well as the quantity of work. Work is now a debasing experience for millions of people: it offers low pay, few chances of progression, and little security. This is why, if you are a British child in poverty, the chances are, at least one of your parents is working. A work ethic can’t thrive when work is becoming an increasingly ineffective way to support a family.
Thirdly, policymakers need to inject urgency into making policy across the board pro-poor. There are plenty of low-cost and no-cost ideas out there that need a hearing. For example improving the Welfare Reform Bill should be an urgent priority, a Robin Hood Tax to protect services and safety-nets for the poorest should be another. Strong signals from the top that reducing poverty is a priority will give bureaucrats and junior ministers the courage to innovate.
Finally, leaner years require a more equitable distribution of the crop. A majority of people seem to think two things about the deficit: it is real and needs to be dealt with (56 per cent in a November YouGov poll), and that it’s not being closed fairly enough (57 per cent). In Westminster, closing the deficit can seem like the crucible of the political contest. But people outside the bubble know it’s not a game. For some communities it’s a question of life or death. To policy elites deficit reduction looks like a myriad of ‘difficult decisions’, each one subject to intense lobbying by those who can afford a voice. But the important question is do we get through this together or split apart? Does society share the burden, ensuring a decent standard of living for everyone – or do various interests fight over the scraps in a contest that can only condemn the vast majority to a poorer future? It’s the decision over the kind of society we want our children to grow up in.