Why Fight Poverty?. Julia Unwin

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Figure 1.1. Proportion of people living in absolute and relative poverty before and after housing costs (BHC and AHC). Source: Households Below Average Income, Department for Work and Pensions (figures are for Great Britain up to 2001/02 and for the United Kingdom thereafter).

      For research shows that poverty is neither overcome by welfare, nor caused by it. The structure of society, the choices made and how money is allocated are much more significant in the long term. We know that offering £4bn to low-income families will not be enough to meet the child poverty target without also taking into account employment, training, education, childcare and so on.1

      Assumptions and assertions about social security blind us to the real questions about poverty:

      •How does a good society cope with the fact that some people do not have enough to meet their needs?

      •What methods are most effective and what outcomes are acceptable?

      •Where does the responsibility lie and who pays for it?

      The focus on welfare has a long and enduring history. The Elizabethan Poor Law’s principle of ‘less eligibility’ stipulated that the pauper’s condition inside the workhouse should be less attractive than the poorest labourer’s situation outside the workhouse, otherwise poorer people would simply choose not to work. This principle continues, largely unquestioned, to this very day in attitudes towards poor and long-term unemployed people, the long-term unemployed and those on welfare. It is rooted in pragmatic (cost) concerns and deep emotional responses including shame, fear, disgust, mistrust and envy.

      The only disagreement is about how minimal the provision for a life without work should be. The objective – ‘making work pay’ – that surrounds the debate over welfare reform policies is a twenty-first-century version of the long-standing idea that the only spur for poor people to work is the threat of even greater poverty if they do not. Benefit sanctions serve the same apparent objective. Whether they work to drive behaviour, or only result in ‘poor job matches, lower wages and higher turnover’,2 is a matter for loud political debate, but only occasionally the subject of careful analysis.

      The welfare system undoubtedly needs massive reform. It has been criticized for trapping people in poverty and for demeaning those it seeks to help, and it is complex and expensive. In 2011–12 over £200 billion (or 13.5 per cent of GDP) was spent on social security benefits. This includes:

      • £36,998m of benefits for families with children;

      • £5,164m for unemployed people;

      • £41,811m for people on low incomes;

      • £85,011m for elderly people;

      • £31,215m for disabled people; and

      • £623m for bereaved people.3

      The system is not fit for purpose, and it will need to adapt as we live longer and need more care. In an ever more volatile labour market, with changing family structures and working patterns, we need a more secure and flexible welfare system.

      However, the current approach to reforming the system is piecemeal and frequently poorly evidenced. The cumulative effect is risky for individuals as well as the local and national economy. The development of Universal Credit is a welcome and potentially very important way of ensuring that people can cope with a fluctuating labour market. However, there are well-founded concerns about the ways it is to be implemented and the impact of the tapers. Research carried out before the implementation of Universal Credit reveals the risks of changing to monthly single payments and highlights the need for clarity over financial support.4

      The move towards engaging with people mainly online will need sustained support. Changes to Working Tax Credits, Housing Benefit and many other benefits, along with caps on benefit uprating, will create significant social upheaval and hardship for individuals and communities.5

      Furthermore, of course the role of welfare needs examination, but if we think poverty can be relieved by welfare alone we are missing the point. Poverty is much more complex and challenging than that. More than half of children and working-age adults in poverty are in working households,6 so while work is undoubtedly a way out of poverty for some, low pay and irregular hours mean that working poverty is a visible feature of our times (Figure 1.2). We will need to change how labour is rewarded, the type of work, opportunities for progression, stability and number of hours, as well as the cost of housing, food, fuel, childcare and other essentials.