Income poverty and material deprivation in the UK: an EU comparison
Today the ONS published its analysis of EU poverty data. At first glance, it seems to show that the only parts of Europe with higher levels of poverty are the accession states and those most seriously affected by the Eurozone crisis. But their deeper analysis shows something quite different: while income poverty is relatively high in the UK, the proportion of people who cannot afford everyday items is not.
The ONS report draws on SILC (Statistics on Income and Living Conditions) data. The data used here is based on a sample of about 130,000 households and 270,000 people across all EU states.The headline measure, “People at risk of poverty or social exclusion”, is based on three different measures. A person is considered at risk of poverty or social exclusion if one or more of the following applies
- They have a household income below 60% of the national median;
- They cannot afford at least four of nine essential everyday items;
- They live in a household with little or no paid work.
The first two of these, or variants of them, are included in the Child Poverty Act: they are official measures of child poverty used in the UK. The graph below shows how different EU countries line up on this measure. The figures are for 2011.
Graph 1 - People "at risk of poverty or social exclusion" in the EU, 2011
On this combined measure, the UK is right in the middle of the distribution; 22% of people are at risk of poverty or social exclusion. However, this proportion is lower only than countries in eastern Europe or around the Mediterranean. These countries either joined the EU in the last decade or are those who have been hit hardest by the Eurozone crisis. (Ireland would also be included in this latter group, disrupting the geographical pattern, but has no data available for 2011. In 2010, Ireland had a higher level of poverty under this measure, having risen sharply since the crisis began).
So on this measure, the UK is doing badly compared to other northern European countries. But in order to be classed as “at risk” on the headline measure, an individual only needs to be in one of the three groups. On the low work intensity measure, the UK is actually higher than the EU average. In 2011, 12% of people lived in households where the adults worked less than 20% of available hours. The EU average was 10%.
On the low income measure, the UK was slightly lower than the average (17% compared to 19%). Moreover, 2011 was the first year in this series (going back to 2005) where the UK rate was lower than the EU average. The fall in UK median income, against which the poverty threshold is calculated, actually accounts for much of this fall in poverty.
It is these two measures that contribute most to the UK’s headline figure. The reason we know this is because the material deprivation level in the UK is well below the EU average. The graph below shows the distribution, with the member states again divided up into the three categories used earlier.
Graph 2 - People "severely materially deprived" in the EU, 2011
Only 5% of people in the UK were unable to afford four or more key everyday items. This was lower than the EU average, around the same level as France and Germany and lower than every EU accession state. So compared to northern Europe, the UK is pretty average.
This raises two thoughts. Firstly, when comparing countries, particularly in the EU, the material deprivation is surely as important a measure of poverty as the low income measure. It is constant across countries and looking at what people can and cannot afford tells us about people’s exclusion from the norms of everyday life; the very essence of poverty.
The second point, following this, is that the idea of material deprivation deserves a higher profile in the discussion of poverty in the UK. The precise measure could be argued with: the 5% figure above does seem rather low, and the particular material deprivation measure used by the DWP gives a substantially higher figure for children (15% in the most recent year).
The government currently consulting on how to measure child poverty, it is worth pointing out that material deprivation is already a part of the suite of measures included in the Child Poverty Act. Rather than designing a whole new measure, the government could simply make better use of one that already exists.