Wednesday, July 07, 2010
Poverty Set to Rise but Tories Now Accept 'Relative' Version of it
Given the deep cuts we are going to suffer in public spending, it is inevitable poverty is going to intensify over the next few years, but it will be of the relative and not absolute variety. The Economist offers a typically acute analysis of poverty in its current issue. It lists Labour measures-Minimum Wage, Tax Credits, The Child Trust Fund- acknowledging that runaway pay at the top end exacerbated relative inequality: the UK has more people living in homes earning below 60% of the national median wage than all but six of the EU's 27 members. Moreover, the percentage of people living in poverty 1997-2008 fell only from 19.4 to 18.3.
How will such figures fare in the 'new austerity'? Clearly the Lib Dems will want to hold Cameron and Duncan Smith to their stated aim of not 'balancing the budget on the backs of the poor'. The IFS has already predicted that the 22nd June Budget will bear down mostly severely on the poor and I suspect the Coalition's stability will come under its most severe pressure in about a year's time. I wouldn't be surprised if it founders then either. The Economist article concludes with the reflection that few would have expected the party of Thatcher to have moved to accept the concept of 'relative poverty', something against which Norman Tebbitt used to rage in the 1980s.
A decade ago, the prospect of the Conservatives accepting the idea of relative poverty—rather than an absolute measure of want, such as a basket of goods that every household should be able to afford—would have been fanciful. Nowadays, it is a reality. The government has retained Labour’s goal of ending relative child poverty by 2020. Labour now admits that the target, which is unlikely to be met, was aimed at cutting inequality and not just deprivation. A welfare state invented, in the words of Gordon Brown’s maiden speech as an MP, to “take the shame out of need”, now has a more ambitious equalising mission that commands the support of the three main parties. If the ultimate victory in politics is changing your opponents, this was among Labour’s
But will they succeed in protecting the poor from the worst effects of the new austerity or will they return to the default position of previous decades? It is the issue on which the future of this government will depend.