Impossible Targets: Poverty - 2 comments

Harpymarx has reminded me about the campaign against poverty, which was popular a couple of weeks back, before the David Davis business took off. My criticism of the use of 'relative poverty' is simple enough, and has been stated enough times, but I don't think it's pedantic to repeat it when bloggers and politicians uncritically use a measure that is effectively impossible to target, giving and receiving praise for accidental successes, and condemning worthy failures.

We continue to use 'relative' statistics, but the language of absolutes, confusing ourselves and forcing Governments into the ludicrous position where policies deliberately aimed at improving the life-chances of the poorest are unlikely to have any impact on the standard 'poverty' measure, which is determined - not so much by (a) national income/GDP-per-head, which Governments at least have a chance of influencing - but median income, something which combines the difficulty of (a), with the added complexity that comes with the continually varying distribution of incomes and (possibly also) housing costs.

This is a recipe for confusion and disappointment, that means that no advance in the fight against poverty is ever permanent: one bad year can cancel out five good ones if the statistics turn that way. There are plenty of other reasons for criticising the use of the '60%-of-mean-net-disposable-income' measure', not least the fact the State provides up-front services for free, that the poorest can use without drawing from their limited funds. It might only be a safety-net, but this reduces the moral weight of purely income-based poverty measures.

Yet the Government clings - so it may take credit in good years - to a measure of poverty that makes its child-poverty-elimination target impossible without the kind of radical restructuring of society that would bring incomes closer to the median. But the Government clearly doesn't believe in such a restructuring, and the various charities and pressure groups are hardly going to antagonise donors and activists by associating with radical redistributive politics. In that woolly world, the aim is always to 'persuade' the Government to 'do more', perpetuating the idea that there is a magic lever to be pulled. Thus it's unfair for Harpymarx - undoubtedly a backer of such redistribution - to condemn the Government for missing its own poverty targets, when they must know that (a) a deterioration cannot in itself be a sign of bad faith, and (b) that the impact of worthy measures like Sure Start can only be assessed by a closer look at the statistics than the mainstream media and casual bloggers will normally provide.

As Tom Freeman pointed out last year, there are many alternative measures of 'well-being' that are absolute, comparable, and also moving in the right direction. It must be impossible for Labour to abandon the official poverty measure now, and assuming the Tories are in power within two years, the dropping of poverty targets will make it irrelevant, but if the pressure groups have any sense they will propose a new 'quality of life' index that it is feasible for a future Government to target, that combines an absolute 'fundamentals' element, a relative element that reflects equality of opportunity, and a 'social well-being' element.

Of course one cannot write about Government targets for the poor without a little disgust that such things are necessary at all.

Hard-working families - 4 comments

The Times brings us the news that "Thousands of buy-to-let families face tax shock".

The article's feeble and shamelessly partisan rhetoric has already been cut to pieces, but what is tragic is to see the same "boo" and "warm" words traded by all mainstream political parties. How demeaning it is to contemporary politics that people out for themselves can still be held up for pity in front of a less well-off electorate, and the stupid and greedy protected on the grounds that they have a home, a spouse, and perhaps dependants.

It continues to stink.

The Agony of the Elite - no comments

This, from Sebastian Cresswell-Turner, via PooterGeek, is apparently not a joke:

A popular member of White's, the St James's club to which many of the old landowners belong, knows plenty of well-educated professionals who have fallen by the wayside. "First, they can’t afford to eat out," he told me, "then they pull their children out of [fee-paying] school, and you just stop seeing them." Brian Gill, a London-based debt counsellor, told me: "The poverty line is definitely creeping upwards."

As a result, socio-economic classes that used to be entirely immune from hardship are no longer safe; and if they do not have to contend with actual poverty, they are nevertheless plagued by a constant sense of precariousness. "Everyone we saw was utterly stressed-out over work and school fees,” said the wife of a best-selling British author now based in Italy, after a brief visit to England last summer.

Without wanting to seem uncharitable, or to advocate "levelling-down" as an end in itself, my instinct is to laugh mockingly at the phoney plight of the top percentiles of British society.

Chris Dillow believes these are the symptoms of being born to rich parents:

A household income of £140,000, even with two children, is more than 97% of the population gets. Even on £60,000, you're doing better than 75% of people in the UK. So how can someone in such a position think themselves poor?

This is where the curse comes in. Coming from a rich family raises your expectations; you expect to have (as Seb does) second homes, expensive meals out and private schools for your kids. And you often feel the need either to compete with your father, or to live up to his high expectations for you.
The upshot is that even if you do very well economically, you feel bad.

That this provides a psychological opportunity for ambitious people from ordinary families to progress at the expense of the rich doesn't leave me entirely satisfied. The ability of the rich to feed stories of their sham plight into mainstream newspapers under the cover of "Life & Style" tells us something more about inequalities of power and access.

Budget/Poverty thoughts - 5 comments

This is mainly a collection of Budget- and poverty-related thoughts, the former only about a week late, thanks to endless editing and the fall-out from my newly-reimposed discipline of 6.20 am wake-up calls. I'll also deal with a few points raised elsewhere, especially those I haven't seen answered satisfactorily.

Firstly, on the Budget, here's the Institute of Fiscal Studies's summary, via Tom Freeman, if you haven't already seen it:

• Sensible tax reforms with revenue recycled to minimise losers
• Higher-rate tax-payers unaffected, 65+s paying tax gain, hard to generalise about others
• Tax credit rises for low-income families generally exceed income tax losses
• Around a fifth lose, two-fifths gain, two-fifths largely unaffected
• As usual, low-income families with children gain, but still much to do to hit 2010 child poverty target
• Overall impression of Brown’s record unaffected
• Highly redistributive, especially to families with children and pensioners

Effectively replacing the 10% tax band with increased Working Tax Credits [WTCs] - that work rather like a negative income tax, and whose take-up is currently poor - still strikes me as odd. Neill Harvey-Smith at the rather fine Vote NHS blog argues that this is an unwelcome move away from individual self-reliance. In contrast to those welfare systems that operate a Citizen's Income (that is to say, none), dependency can only be prevented by carrots and sticks, within systems - such as our own - that are based upon reported or assessed need, and potential recipients who prefer to be self-reliant must miss out in many ways. To single out WTCs therefore seems to miss the bigger picture. I still can't say I entirely understand the idea behind the Chancellor's move; that being the case, does anyone have a possible explanation other than the cynical hope that take-up will be low and benefits unclaimed, that is ascribed to Mr. Brown by political opponents?

With all the arguments over benefits, lower tax bands, minimum wages, and withdrawal rates, let's not forget that being out of work - and being kept out of work, whether by macroeconomic policy, poor skills, a lack of mobility, high withdrawal rates, or wage floors - is the most damaging scenario the poor face, and we should not forget what we rightly argued in the 1980s and 1990s, that increased unemployment is not something we should lightly play off against, say, higher statutory minimum wages for easily-replaced workers.

*

There's been a lot of recent attention given to the apparent increase in the number of children in poverty. What appeals most to me, politically, are significant increases in the quality of life and the number of opportunities opening up to the poorest and thereafter to others, working up through the wealth/opportunity/power scale. The "60% of median income" poverty line is a statistical measure, that guides policy but also distracts. It tells us nothing about opportunity, or power, or job security, let alone health or education, and it tells us things about higher earners, as any average must.

There must be statistics, but misunderstandings will arise when those who use the statistic argue with the majority, who determine poverty subjectively, using both senses intermittently, such as at this David Osler post. Using the 60% measure of poverty it is indeed almost impossible to escape it while on benefits. Probably only a recession, or a large increase in the basic rate of taxation can lower median income sufficiently to raise a single parent on benefits from being poor to 'not poor', and that without a penny of extra money being spent on them, but with prices continuing to rise. Undoubtedly a perverse way to escape poverty. And the more the effort to alleviate poverty is focussed on the most disadvantaged groups, the smaller the effect on the total number of poor.

If the term 'poverty' is to remain a condition that encourages Labour supporters to advocate the most urgent preventative action, it must be an accurate guide to the disadvantage that traps and restricts people and causes suffering, and to any injustices that bring this about - one which doesn't simultaneously try to measure income inequality. A measure like the Human Poverty Index, while including a relative income element, also factors in long-term unemployment, literacy levels, and life expectancy. A richer measure like this would be more likely to identify disadvantage, and potentially a figure could be calculated for each socio-economic group or income quintile. Of course there can be no substitute for looking for the Budget's effects on individuals themselves, particularly those at the bottom, to see how the people are affected materially, what problems the measures solve, what problems they create or leave standing, and how they affects the people's prospects and ambitions for the future. It might also encourage politicos to pay more attention to the effectiveness of public spending, rather than its scale.

*

I notice some bloggers have used the cut in the main corporation tax rate to introduce "city bonuses" to the conversation. I'm not going to whitewash that issue, but I feel I ought - once again - to interject to tackle a bad and misleading argument, before the two concepts become one in people's minds. So here's an alternative hypothesis: that companies employ workers, and might - as a result of the cut - be able to employ more in the future, for more hours, and for more money, just as companies are able to do in healthy economic conditions, and not in recessions.

Thinking of benefits as only affecting the poor, income tax the middle class, and corporation tax the rich, when they are - as are we all - interdependent, has (had) an unfortunate effect on left-wing attitudes to government spending in the UK. It might well be responsible for the popular idea on our side that - whatever you or I think about current rates - income taxes cannot be acknowledged as being close to "too high" while poverty and social problems remain, even though those same taxes affect most of us. I fear that this tax anxiety is not simply a product of the "Blairite" imagination, or (insert something about Murdoch), the real challenge being that both poverty and politically unsustainable taxes may coexist, and the issues of rising expectations and the effectiveness of public spending must be looked into, by those who are serious about tackling poverty but know they cannot do so from the Opposition benches.