Britain Measuring poverty
The end of the line
The government sets out to redefine what it means to be poor
When Seebohm Rowntree, a chocolate-maker and pioneering social researcher, began measuring poverty in York in 1899, he worked out the minimum needed to buy enough food for “physical efficiency”. In 1935, when he repeated the study, Rowntree added allowances for cigarettes, newspapers and a holiday. By 1951 he concluded that poverty was on its way towards being eradicated, with only pockets among the elderly left, and stopped counting.
Few now experience the raw penury of Rowntree’s day. But measuring poverty remains an obsession. In its dying days the last Labour government passed a law committing its successors to reduce child poverty. That is causing trouble for the present lot. Under the law, poverty is defined primarily in relative terms: families with less than 60% of the median income are considered to be poor. On November 15th Iain Duncan Smith, the welfare secretary, was set to launch a consultation to come up with a better definition. He wants to include things that he regards as the real causes of want: worklessness, educational failure and drug and alcohol dependency.
There are several problems with the current measure. Because it is relative, it is influenced by changes in overall earnings. Figures released over the summer showed a sharp reduction in child poverty over the last year—mostly the result of falling median incomes rather than a genuine improvement. The measure fails to take into account the quality of services that the poor receive, such as education and health. Worst of all, from the point of view of a cash-strapped government, huge amounts of money must be spent on tax credits and other welfare programmes to raise family incomes up to the threshold.
But several charities are nervous about changing how poverty is defined and suspect Mr Duncan Smith of trying to wriggle out of a commitment to his predecessors’ targets. These had some benign effects. Since 1999, when Tony Blair announced his ambition to end child poverty, the profile of the poor has changed profoundly. Thanks to tax credits, the proportion of children living in households below the poverty line has fallen by around a third. Pensioners, who have been supported since 2003 with a special credit, are now less likely to be in poverty than younger people. But working-age adults without children are actually worse off: whereas 12% were considered to be in poverty in 1997, now 15% are.
It is not clear that this progress will continue, says Chris Goulden, a researcher at the Joseph Rowntree Foundation. The government’s big welfare reform—the universal credit—creates strong incentives for people to work for a few hours, which may help to increase incomes. But other reforms work in the opposite direction. Mr Goulden reckons that child poverty will increase significantly by 2020, mostly thanks to a change to how benefit rates are increased with inflation.
The long economic slump and the rising price of food and energy have already made life harder for the very poorest. At a church in Brixton, in south London, desperate folk wait for parcels of donated food. Many similar food banks have opened recently, mostly helping people in debt, or those whose benefits have been suspended. The church recently collected donations from annual harvest festivals in schools. In the past, children collected food for the elderly, remarks the vicar. Now they collect it for their classmates.