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Poverty, or The Giants Who Wouldn’t Die
by Moussa Haddad
Source: UK Poverty Post
What single national policy change would most reduce poverty amongst working age people? That’s the question I’m being asked to address; but before I do so, it’s worth taking a bit of a reality check. There are 13.5 million people who live in poverty in the UK, and of those, there is a pretty much 50/50 split between those in working and in non-working households. So the solutions are not and cannot be clear-cut or one-dimensional. We need more than just one change.
That said, Oxfam works and has worked with a diverse range of people and groups up and down the country, and through all the individual characteristics and unique experiences, one common denominator keeps rearing its head. Designed in particular to tackle want – ‘one of the five giants’ – the social security (or benefit) system is neither particularly effective at this (living in a workless household gives a working-age adult about a 70% chance of being in poverty), nor at empowering people on benefits to improve their circumstances.
So what’s going wrong? The Beveridge Report hints at a possible answer: ‘organisation of social insurance should be treated as one part only of a comprehensive policy of social progress’. As well as being merely one of Beveridge’s five giants, want is ‘in some ways the easiest to attack’. To anyone concerned with ending poverty among people currently out of work, then, there are broadly two issues. First, benefits need to be enough to live on. There is a long way to go before that becomes the case, but reversing the trend of the systematic running down of benefit levels would be a good start. Second, social security needs to be more than a safety net: it needs to act as a springboard to a more rewarding, sustainable livelihood.
For well over a decade, fighting want has been a central policy goal. Admittedly, it’s been under the guise of the commitment to end child poverty, but to end a child’s poverty, you need to end the poverty of their parents. So, in effect, this target has been about ending swathes of adult poverty too – even if it is wrong that any government should be tacitly acquiescing to ongoing poverty for anyone in the world’s fifth richest country. Yet with a narrow (and only moderately successful) focus on want, have the other giants been left to grow?
Here, I’d like to put to one side disease and ignorance (if only it were that easy), where enormous investment in health and education require detailed analyses of their own (though recent news on health inequalities isn’t great). On squalor, the government has been undershooting its own targets for new affordable housing by about half (as well as targets for what one most suppose is its corollary, non-affordable house building). Consequently, the number of households on local authority waiting lists has gone up by about 75% in a decade. But that argument, too, is for another place. For the biggest failing of today’s benefit lies in its failure to cut down to size the fifth giant – ‘idleness’.
At this juncture, it’s worth taking a sidestep into etymology. Today, idleness is generally used pejoratively, as more or less synonymous with laziness. In Beveridge’s day, however, the term carried no such connotations; so in today’s language, forced, or involuntary idleness is probably closer to the mark. That matters becausepolitical and media discourse around the problem of idleness has tended to focus on ‘idle’ people themselves, rather than on the structures that keep people out of work. Of course, idleness in common discourse is seen as absence from the labour market, whereas we know very well from our work that people out of work make an enormous contribution to society – through activities such as unpaid caring work, volunteering, or support for local communities.
The figures for involuntary idleness make for stark reading. If you add together the number of unemployed people (2.5 million) to the number of people who are classed as economically inactive, but who want work (2.3 million), you get a total of 4.8 million people who are forced to be idle (in the narrow sense of not having a job). Add to that 2.8 million people who are underemployed (who would like an extra job, a different job with longer hours, or more hours in their current job), and it’s clear that involuntary idleness is endemic. Perhaps most shockingly, during a decade and a half of growth since the last recession, involuntary idleness never dropped below 3.7 million, and underemployment never fell below 1.9 million.
So what’s the policy change that I’d like to see? In some sense, it’s not that different to the answer to the second question we’re being asked to address this week: what public myth or misperception about poverty is it most important that we challenge? At all levels, from policy, through media, to society, we need to reclaim the concept of idleness from those who have been driving welfare reform for a decade and more. For too long, it has been seen through the prism of individual failing, which has led to endless increases in ‘conditionality’ – or bullying people into jobs which may or may not exist, and which may or may not pay enough to live on. Public policy needs to recognise that idleness is enforced, and to start to address it from that perspective.
And when governments tackle want, they need to think about the impact on the other giants – so fighting child poverty through means-tested benefits is great when considering any point in time, but these benefits create financial barriers to moving up the income scale, and so can have the effect of leaving people trapped where they are.
Happily, the terms of debate are starting to shift. The Centre for Social Justice (CSJ)’s game-changing Dynamic Benefits has led to similar research accepting its main premises. In essence, if you start from the assumption that people in poverty make decisions that are rational in the context of their own lives, then you start to ask the right sort of questions. How can we structure the benefits system so that work – including the type of short term, part time, low paid jobs that tend to be available to people coming off benefits – always pays more than being on benefits (and not forgetting to count the hidden costs of working, like transport or clothing – or the loss of passported benefits)? How can the system protect people from the high risk of financial difficulties and debt caused by cashflow problems between benefits stopping and wages being paid (or vice versa)? And what about the non-financial costs and challenges – like costs of caring; challenges to physical and mental health; or of maintaining the social networks upon which poor people especially rely – of moving to work, which can make a sustained exit from benefits impossible?
On the financial side, the CSJ’s research has produced detailed analysis, with costings (at a net £2.7 billion per year initially), of what ending the benefit trap could look like. In essence, it comes down to three things: simplifying the range of benefits that are paid, both in and out of work; increasing the amount someone can earn before their benefits start to be taken away; and decreasing and standardising the rate at which they’re withdrawn after that. A small slice of revenue from a Robin Hood Tax, the campaign for which Oxfam is supporting, could pay for that comfortably.
The new government has an opportunity to use this thinking as a starting point, towards doing welfare reform differently. Working from the financial landscape people on benefits are actually facing, and treating them as rational agents of their own destiny, policymakers can begin to address the structural causes of involuntary idleness. The next step is to look at the non-financial aspects of people’s livelihoods, and the things that matter beyond paid work. Nor is making idleness easier to escape any substitute for benefits that pay enough to live off. And there’s the small matter of that half of people living in poverty who are already in working households.
Yet that just reinforces that there’s no silver bullet for poverty. For a single policy change, a benefit system that allows people to make their way gradually into work, while keeping more of they earn, without losing the security that comes with benefits – that would be a great start.
