Centre For Small State Conservatives

This article originally appeared in Centre Write, the online journal of Bright Blue where John is an Associate Fellow.

In the last 40 years, the spread of capitalism to Asian ‘tiger’ economies and then India and China has meant that the number of people living in poverty has dropped dramatically worldwide. We are delivering a higher quality of life to more people, and a higher proportion of the planet’s population, than at any stage in our species’ history.

This rising tide has benefitted Britain too. Things like washing machines and fridge-freezers were rare luxuries when today’s grandparents were young but are common and affordable now. Watches and cameras have gone from precious pieces of expensive engineering to free apps on phones with more computing power than the Apollo moon-lander. Personal assistants aren’t butlers and maids anymore but cheap software that everyone can afford. Knowledge has gone from being slow and expensive to find to free at everyone’s fingertips through an internet search. ‘Abroad’ has changed from somewhere most people had only been with the army to mass-market holidays in the sun.

But even though our standard of living is enormously higher than it used to be, poverty in UK and many other developed nations has barely budged for decades. We spend billions on benefits every year but somehow quietly accept that poverty will never end. It has become a long term, chronic and enormously expensive condition that we have to live with forever; because it can only be managed rather than cured.

The cause of this awful fatalism is that our public, political debates are stuck down a blind alley, built by the political left, which has successfully defined anyone getting less than 60% of the national median earnings as being poverty-stricken. Even though the 60% threshold was officially abandoned as the UK Government’s poverty line in 2015, it still dominates and defines the terms of any discussion about poverty in Britain and many other countries too.

Framing the problem this way makes no sense. After the 2008 banking crash, incomes were compressed so reported poverty levels actually fell – even though everybody was worse off! Or, if the ten richest people in the country died and left their money to Battersea Dogs Home – or even just threw it into the Thames – poverty would fall even though nobody’s standard of living would have improved at all.

Why does the political left keep framing the debate this way? Because defining poverty purely in terms of how much smaller my pay packet is than yours leads, inevitably and inexorably, to answers that involve taxing you a bit more and giving the proceeds to me through benefits instead. It embeds a powerful income-equality ratchet into the heart of Britain’s welfare state.

The problem is that income equality isn’t a solution to poverty. No country on the planet that uses it — even the much-admired Scandinavians — has either come close to eliminating poverty completely, let alone expects to do so.

The true causes of poverty are different. Using the benefits system to give a chaotic drug addict enough cash to lift their income above 60% of the national median will fund their next fix but won’t improve their standard of living at all. Or, if academic success in a post-industrial community is labelled as ‘snobby,’ the solution is to restore pride and ambition by changing deeply entrenched social attitudes – not just tweaking benefits – so that fewer people are on 59% rather than 60% of national median income.

In each of these cases, low income is a symptom of poverty, not its cause, and treating the symptoms without curing the underlying condition that’s creating them will never be more than a temporary, unsustainable solution.

Yet, if the political left is guilty of preferring to redistribute wealth instead of genuinely trying to eliminate poverty itself, the political right must shoulder a share of the blame as well. We have allowed these deeply entrenched, wrong-headed definitions to dominate British politics without fighting back with an equally powerful alternative approach.

We need a new, better and more honest measure of poverty, which includes the underlying causes like long-term disability and addiction, unstable jobs and housing, childcare costs and low emotional and financial resilience to deal with problems and emergencies.

Some far-sighted researchers are already focusing on this problem. Organisations like the Social Metrics Commission, the Joseph Rowntree Foundation and the Office of National Statistics are all working away. The political right must use the next few years of political opposition to partner with them to create a finished result.

Because if we frame poverty properly, rather than just focusing on the symptom of low incomes, policymakers will — at last — have to treat its underlying causes rather than just expensively bandaging the symptoms to make the public headline figures fall.

The results would be transformational. Joblessness, benefits bills and taxes would all fall as we shrink the need for parts of the welfare state by equipping more people to live proudly independent lives.

Our aim should not be to live with poverty, or manage its symptoms so the pain becomes a bit more bearable, but instead to abolish it completely. Forever.

John Penrose is a Bright Blue Associate Fellow, the Founder of the Centre for Small-State Conservatism and the Chair of the Conservative Policy Forum, as well as a former MP, Anti-Corruption Tsar and Minister.

Picture is ‘Feast in the House of Simon the Pharisee,’ sometimes referred to as ‘The Anointing at Bethany,’ by Peter Paul Rubens. It is in the public domain. “For the poor always ye have with you; but me ye have not always.” (John 12:8).