I was interviewed yesterday for a Radio 4 programme called Analysis which will be transmitted sometime in the future.
The issue was inequality. Some people believe that income inequality and poverty are serious problems in Britain and should be addressed by government. 'Income inequality' and 'poverty' are, effectively, the same thing in their minds since they define poverty as someone having 60 per cent or 50 per cent of average incomes, regardless of how high average incomes might be.
I don't want to minimise the problems of those who are relatively poor. In Britain, they have been trapped in a dependency culture which has done them enormous damage. However it is worth remembering that when it comes to 'poverty' and 'inequality', government statistics on income and financial assets are virtually useless. The relatively poor have an incentive to get rid of any financial assets. As the story of Frank Stent shows (in The Welfare State We're In), they are incentivised to exchange financial assets and buy consumer durables and holidays instead. If they don't do this, they risk losing their means-tested benefits.
Someone with over £8,000 of financial assets entirely loses any entitlement to income support. So a lone mother, for example, who was dependant on income support would damage her financial interest if she kept financial assets of more than that sum. So the official statistics on income and financial assets don't genuinely tell us about poverty (either relative or absolute) or inequality. Something else gives us a more commonsense idea.
The idea that poverty and inequality have seriously increased in the past two decades is undermined by the following figures from the Office For National Statistics:
Since the early 1970s, the GHS has recorded a steady increase in the ownership of consumer durables. Ownership of a refrigerator rose from 73% of households in 1972 to 95% in 1985.Other household amenities that were available only to a minority of households in the early 1970s were also more widespread by 2002. For example, the percentage of households with central heating rose from 37% in 1972 to 93% in 2002.
By the mid-1990s, most homes had access to a freezer, a washing machine, a telephone and a television. The proportion of households with access to more recently introduced items (such as the dishwasher, tumble drier and microwave) continues to rise.
Since their introduction to the survey, entertainment items have become much more widely available. Access to a television has always been highly prevalent (93% of households in 1972, rising to 99% in 2002).
And again,
Under half (42%) of all households had a telephone in 1972. In 2000 98% had a phone. Since then, the proportion of households with fixed telephones has remained almost constant. There has however been a significant increase in the availability of mobile phones. The proportion of households owning mobile telephones increased from nearly three fifths (58%) in 2000 to three quarters (75%) of households in 2002.
When people say that poverty has increased, they have to explain in what way those people in the 1970s were less in poverty and while not having a telephone, a freezer or central heating. Going back a bit further, were the people between the wars less in poverty when they had no inside lavatory and, earlier in the century still, when the cost of food absorbed 30% of average incomes rather than 10 per cent as it does now. In those days, the cost of food was major issue for those with below-average incomes.
It is absurd and insulting to our intelligence to suggest poverty has got worse. The real problems of Britain are much more those of dependancy, incivility, cultural decline, crime, bad healthcare, bad education for the least well off one third and so on.
The full press release is here.
Posted by James Bartholomew • Indexed in Politics
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While not necessarily disagreeing with your basic premise, one of the biggest barriers to independence for those on low incomes is the cost of property i.e. high rents. HMG money saved on subsidised rent and the sale of council housing instead goes on inflated private sector rents for the poor and B&B for the homeless.
Posted by: Observer at August 11, 2005 01:45 PM
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Quite right James - this poverty cliche has been flogged to death by liberals who can't grow up
Posted by: David Vance at July 25, 2005 07:32 PM