Monday, 21 January 2013

Mr Duncan Smith is wrong on poverty

In 2011 the Secretary of State for Work and Pensions, Mr Ian Duncan Smith set out a 'new approach to child poverty'. At its heart he says are the principles of "work, fairness, responsibility and support for the most vulnerable". It is set to fail;  and the reason it is set to fail is because the underlying assumptions are wrong.

At its heart is the idea that the cause of poverty is that people don't work. It adopts a carrot and stick approach based on the notion of "welfare dependency". It sets out to "reward those who work". The flip side of the policy is to punish those who do not. It seeks to drive feckless people into work by cutting their benefits. The poor are to be blamed for their poverty.

It adopts a Victorian approach with the assumption that poverty is to do with behaviour. If only the poor would adopt different lifestyles, the idea runs, then they could 'help themselves out of poverty'. It raises the image of drug and alcohol abuse, poor parenting, and a host of other stereotypic assumptions about the poor.

It is politically convenient because it sets out to divide the poor into the virtuous and the sinful. But it is on the whole wrong. And because it is wrong it will drive more families into poverty. It will systematically withdraw benefits from those who need them including the majority of poor working families.

Mr Duncan Smith's policies are based he says on "the belief that work, not welfare, is the best route out of poverty for those who are able to work." To make his point he chooses to emphasise those families where 'no one works' which the Department of Work and Pensions (DWP) estimate is about 1/6. But this is a very simplistic assumption; at best it is only one part of the anatomy of UK poverty.  His approach to poverty is based on a stereotype; on a minority rather than on the substantive causes of poverty. As a result it stigmatises the poor as architects of their own condition.

The Universal Credit, he says, will support those who "do the right thing", who "take a full time job." The language is clear. It seeks to divide those who are 'virtuous' and 'do the right thing' and those who are 'sinful'. So why is this wrong?

The idea that poverty arises from fecklessness, drug or alcohol dependency, or is the fault of the poor themselves from poor lifestyle choices is cruel and unsustainable. According to statistics from the DWP there are 3.6 million children living in poverty in UK today. That is 27% of all children. This is now set to rise as a result of the government's policies by at least a further 300,000 in the next few years. But these are not the children of the work-shy. They are not the children of parents who have been 'doing the wrong thing'. At least 62% of these children are in working families. Mr Ian Duncan Smith's first assumption is wrong.

It is wrong because the root cause of poverty is low pay coupled with poor work opportunities. And much of this stems from the cycle of poverty; poverty increases morbidity which reduces productive capacity, educational attainment and opportunities for work. But geography also plays a major part. Poverty is multifaceted and cannot be simply solved by cutting benefits. Cutting benefits simply drives more people into poverty.

But it is wrong for another reason. It is based on the assumption that cutting benefits will drive those who are unemployed into work. But it can only do this if there is work available and they have appropriate skills.

The geography of poverty reveals a different story.  Poverty is unevenly distributed; it is clustered.  In the most deprived areas it is as high as 70% of the local population (see figure modified from The Guardian Data Blog).

Poverty clusters in England
click to enlarge
Analysis by the ONS demonstrates a clear mismatch between availability of jobs and the most deprived areas.  Private sector employment is clustered in a few key areas, such as the south east of England. The north of England, the Midlands and Wales, show low private sector job densities and poorer job prospects. Adopting policies blind to this mismatch is reckless.

The sobering fact is there are far fewer real jobs available in those areas most blighted by poverty. By emphasising 'welfare dependency' it makes a wrong assumption. Welfare dependency doesn't come from people not wanting to work, but from the absence of job opportunities and from low pay.

The real cause of poverty is low income. It is true that 42% of all families below the UK poverty line have no working member. Unemployment is clearly a factor. But there is no simple solution to matching job opportunities with skills and geography. Joblessness is complex. A family cannot move simply to regions of higher employment. Costs of housing and child care and moving away from family support are all barriers. Unemployment and poor job opportunities are economically structural rather than behavioural. Any policies that tackle poverty must also tackle the economic realities behind it.

Simply cutting benefits and 'driving people' into work to 'make them better people', to use Mr Duncan Smith's words, is not a recipe for success. We need real economic policies aimed at growth and renewal of the most deprived areas, the areas hit most by the recession, and we need strategic policies to tackle low pay and skills.



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