Monday, 3 August 2015

Poverty and inequality ......................... just words

These two words, poverty and inequality, are so often used by politicians and journalists from the left, right and centre and endlessly picked over by talking heads on the television that we can be forgiven for losing sight of what these terms represent. Before I go any deeper into this post it would seem prudent to establish a common definition.

Poverty

Defined here by the Joseph Rowntree Foundation (JRF):
"When a person’s resources (mainly their material resources) are not sufficient to meet their minimum needs (including social participation)". A very clear and precise definition.



Inequality

Now this word is a far more slippery beast so I sought help from the UK Equality Trust:
"The UK is a divided society where the richest receive the lion's share leaving crumbs for the rest." That is a very no nonsense statement but one with which I tend to agree.

Unfortunately we live in a time when those definitions have come under a sustained and relentless attack. We have Ian Duncan Smith (IDS - or as we refer to him on this blog - ODS) stating in parliament that the definition of child poverty would be changed from "living in a household with an income less than 60% of the national median income" to ............... well here I start to get very annoyed because now child poverty relates to exam results and if the parents are in work. Look here at the Daily Mirror article of July 1st 2015 for further details. So children doing well at school but living in a household with not enough money to put a balanced diet on the table even though both parents struggle to make ends meet with zero hour contracts will not now be deemed to be living in poverty. What ODS has so conveniently swept aside is that very clear definition as stated above by the JRF; if your resources are not sufficient then you are in poverty. Taken further, the inability to participate in society is a relative measure and can only be assessed by a comparison of income and opportunity. This is why the relative poverty measure was enshrined in the Child Poverty Act passed by Gordon Brown in 2010, which required the Government to eradicate child poverty by 2020. (Look I know that BelperStuff has referenced this before but there are no apologies for repetition).


What is needed

It has to be acknowledged that this is a complex issue but there are many of us who have been shocked that the Tories were returned to Westminster with a majority even though the attack on the poor had been so obvious in the past 5 years. We had not realised that the arguments put forward by the likes of ODS had taken such a hold of the electorate. The insidious drip of misinformation and redefinition have undoubtedly undermined what we thought were the values that lay at the heart of British social consensus. Obviously attempts by groups such as the JRF and the Equality Trust are not enough and any amount of blogging and letter writing would also appear to be of limited effect. So what can be done? Well ......... perhaps the first basic step is to pin down the exact meaning of the two words in question; engineer a debate that leads to an accepted standard so that every time either word is uttered, be it by Jeremy Corbyn or David Cameron, the precise meaning of "poverty" or "inequality" is understood by all. So how are these two words defined on BelperStuff? That's easy and, at the risk of baffling the followers of Russel Brand (I refer of course to the interview on Newsnight where he claimed that people like him could not understand graphs), it is best to illustrate the point with yet more graphs. In an earlier post BelperStuff pointed out that prior to the Thatcher government the ratio of net income between the bottom 2.5 million UK households with that of the top 2.5 million was 1:7 ............... i.e. that the top group earned 7 times more than the bottom group after adjustment for tax and benefits. In comparison, by 2013 that ratio had doubled to 1:14; the top group now enjoying a net income on average 14 times that of the bottom group. By the legal standard definition of poverty (60% of median income) in both pre-Thatcher and 2013 the bottom group are in poverty but that poverty is now demonstrably worse.

Source: Data from the Office of National Statistics/ BelperStuff interpretation & graph
This graph shows the relative change in wealth of each socio-economic group in the 36 years between 1977 and 2013 (adjusted for inflation), for example, the bottom decile is 10% worse off whilst the top group are 64% better off. I have to stress that these figures denote their relationship to the average income.  I am resisting the urge to shower supportive graphs upon you but the salient point here is that even though there has been a significant rise in UK GDP over this period most groups, in fact 21 million households, are comparatively worse off than they were in 1977 when compared with the average income in 2013. Ah yes, you may say, but what of the difference between the average and mean income? Not a lot really but that will be the subject of the next post on this subject.

If only our Labour politicians asked those on the right to defend this graph, to use it as a starting point for the debate to fix the meaning of the word poverty and then to determine what are the UK indicators of inequality. Is it any wonder that Jeremy Corbyn's leadership campaign has gained in traction when he seems to be the only candidate who understands the cancer of unfairness that lays at the very heart of our society.

To be continued ..................................


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