Publications

Income and Poverty

Monitoring Poverty and Social Exclusion 2012

  • Published 26th Nov 2012
  • Authors: Hannah Aldridge, , Peter Kenway, , Tom MacInnes, , Anushree Parekh,
  • Category: Income and Poverty

Our most recent report for the Joseph Rowntree Foundation looks at the current trends and patterns in poverty across the UK. Using official data, it covers a range of indicators including low income, ill health, homelessness and low educational outcomes. This year's report includes a set of indicators that go back as far as the 1940s, as this shows how long term trends can help us understand current changes. It also focuses on the impact of welfare reform, looking at the people who will be hit several times over by changes to the benefits system.

The key points were:

  • The composition of those in poverty is very different today than 10 or 20 years ago. The proportion of pensioners in poverty has halved since the early 1990s, while that of working‑age adults without children has risen by a third.
  • Over half of children and working‑age adults in poverty live in a working household. In‑work poverty has been rising steadily for at least a decade.
  • Poverty is no longer concentrated in the social rented sector. The numbers of private renters in poverty are now as high, having doubled in the last decade.
  • Health inequalities between deprived and non‑deprived areas have grown in the last decade. A man in one of the least deprived areas can expect to live longer than a woman in one of the most deprived areas.
  • Some 6.4 million people now lack the paid work they want. There are 1.4 million part‑time workers wanting full‑time work – the highest figure in 20 years.
  • The populations of people in poverty and those out of work are not static. While one in six people live in low income at any one time, around one in three has had a spell in low income over a four‑year period.
  • Similarly, while 1.6 million people are claiming Jobseeker’s Allowance (JSA) at any one time, 4.8 million have claimed JSA at least once in the last two years.
  • The welfare cuts so far are likely to hit low‑income households more than once, through changes to both income‑related and housing benefits. Changes to disability benefit could mean low‑income disabled people being hit even harder.

The report was written at a time when the measure and concept of poverty was being questioned by central Government. Poverty was increasingly portrayed as the result of individual decisions, which could be reduced by improving the incentives for those individuals to live differently. But no government can expect to do much about poverty if all it does is try to change the choices made by those who are poor while leaving unchanged the situation in which those choices are made.

The state of the economy and the number of jobs within it are obviously one part of that. So too are changes within society itself, usually slow but over a long period of time often profound. The shame of this is that Universal Credit, the government’s big idea for tackling poverty, is wholly owned by the Department for Work and Pensions (DWP), subject to strict Treasury oversight. As a result, strategic responsibility for poverty reduction falls almost entirely to the DWP.

Yet at the same time, the Child Poverty Unit is also consulting on how child poverty should be measured. Part of the rationale is that the current measurement, focused on income, is too narrow.

This MPSE report, now into its 15th edition, has always represented the view that other aspects of poverty, exclusion, deprivation and disadvantage should be measured alongside income and seen as part of the subject. Our only condition is that a specific problem only belongs here if it is more likely on average to occur among those with low incomes than among those with middle or high incomes. A good outcome from this consultation would be for a wider range of measures to be introduced alongside (although not in place of) those for low income, leading to a broader acceptance of responsibility for poverty both across Government and outside Government. This broadening would reduce the focus on the individuals in poverty, shifting it instead to the situation in which those individuals find themselves.

There is no single factor here: instead, consideration has to be given to all of the factors entering into the long view above, including demographic change, employment levels (both jobs and hours), qualifications and housing. Other elements not discussed including pay, taxation and public services are certainly relevant. There is also a strong case to be made about the importance of the cost of essential goods and services.

A broad approach to the causes of poverty is not a new idea. So what might it take to make it happen? Two changes are needed. The first is to give up the belief that welfare reform is the key to ending poverty. For as long as this belief holds sway, the more complex, broad approach stands no chance. Universal Credit and the claims made for it are the latest expression of it. But the belief has dominated thinking about poverty policy since the introduction of Child and Working Tax credits ten years ago.

The second is to focus on in-work poverty because the problems of the in-work poor are the same as those of most working people, but worse because money is tighter. Restoring ‘poverty’ to the mainstream in this way opens up the possibility of arguing that responsibility for it belongs with mainstream organisations.

Welfare reform is obsessed with whether the social security system provides adequate work incentives. Sideline welfare reform and the question that reappears is whether the safety net the system provides is adequate. Since adult benefit rates have been tightly controlled for years, rising social security spending is symptomatic of greater need. Suppressing those symptoms by cutting entitlement just weakens the safety net, and there are eminently good reasons why people may need it. Bringing these reasons to the fore can challenge that most pernicious idea that the poor are to blame for their own poverty.

 

About this report
This report was funded by the Joseph Rowntree Foundation and written by Hannah Aldridge, Peter Kenway, Tom MacInnes and Anushree Parekh. The facts presented and views expressed in this report are those of the authors and not necessarily those of the Foundation.