What Can Be Done?
On the home front there is much that can be done but it does require a strong government and a real desire to push through the needed changes. Several tax changes could lighten the burden of the poor, giving them more disposable income. However, you cannot dictate what they chose to spend it on. Moreover, Tim Worstall, (Forbes.com) is quite adamant that giving welfare and tax credits does not reduce poverty, “by a fraction of a percentage point, it does not reduce poverty by one single person.” An astute observation but you achieve nothing by sitting on your hands.
Based on the premise that we retain the ‘relative poverty’ criteria – though I feel that we need better indices or a least a common one – we have to identify the causes of poverty. Ron Haskins, (ibid) has come up with a series of good indicators:
“…less jobs, stagnant wages, rise of single- parent families, inferior education and the arrival of millions of immigrants with poor education and low skills are little engines pushing up the poverty rate.” (a slightly long but very good read)
While Haskins is talking about America, the same can be true of any developed nation.
The Department of Work & Pensions (DWP) UK in their 2012 report state that the “root causes must be tackled.” The report goes on to suggest that the best way to escape poverty is “…through achievement in education and work.” Both of these may appear prerequisites but must be implemented properly. Tony Blair gave us thirteen years of: education, education, education and that was a miserable failure. More needs to be done to identify the ‘root causes’ of poverty and to devise a plan to overcome them.
Public Service Europe (.com) suggests that more money should be spent on “… after school clubs, youth clubs and community work.” Haven’t we been here before? Yet we must not dismiss the rationale, if we can get empirical evidence that they make a credible impact.
To add to the list, economicshelp.org proposes a long hard look at indirect taxation. Here is where I believe the Government, any government, can make a substantial contribution, if not to eradicate poverty then at least to ease the hardship of trying to make ends meet.
- VAT a pernicious tax which takes a larger chunk of the income of the poor than that of the rich. Cut it!
- Petrol, the government take 57% of pump price in tax. This affects every aspect of travel and distribution. A cut would reduce costs for everyone.
- Alcohol, Tax on drink hits the poorest hardest.
- Council tax, it is estimated that this tax takes 5% of the income of the poor but only 1% from the rich. Cut it!
- Tax banding, raise the band at which you start to pay tax to £12,000
- Universal Benefits’, e.g. child benefit – keep it – and raise it in line with inflation as it has a better take up rate than any other benefit.
- Minimum wage, increase in line with inflation
- Hire Purchase (HP), restrict HP interest to 5% above the Bank of England rate –National bank rate. Many retailers charge 29.9%. Many people rely on HP to furnish their home.
- Immigration, curb it. I noted that not one of the charities mentioned the impact of immigration as a cause of poverty. Perhaps they were trying hard to be ‘politically correct’. This is where politics really does stink! Bias it holds no truth!Unless you identify all the factors that contribute to poverty then you can never deal it a fatal blow. Immigration does affect so many aspects of people’s lives: housing shortages + higher rents, education = schools trying to cope with multi-lingual classes, wages =kept low, jobs = fewer jobs & no training.
We are starting to build a comprehensive list of what can be done. The top priority, perhaps the biggest hurdle is a programme that encourages all parents to read to their offspring. We do perhaps need to devise a book subsidy scheme to help in this area.
“No human capital program is so widely believed to be effective as pre-school education for children from poor and low-income families.” Ron Haskins (ibid)
“Move from tax credits to affordable child care.” John Denham, Member of Parliament.
If we accept that one-parent families and poor single income families are trapped in the vice of poverty and that work is an essential element in breaking free then we must get people to work. Therefore good affordable child care has to be a priority.
How can the Government pay for the ‘wish list’? They can close every tax loophole that comes to light. Cut tax evasion altogether. Drive hard and fast on welfare cheats. Have a systematic onslaught on the ‘Black Economy’. Altogether, this could net £100bn+. Stop the spin and put income tax up by 2p in the pound.
I said at the start that the Government would not eradicate child poverty by 2020, why not? According to the Institute of Fiscal Studies and cpag.org.uk child poverty is set to rise, reaching 4.2 m by the target date. Moreover, there is little hope that the Government will implement the changes necessary to achieve an end to child poverty.
You can cross your fingers or tell the Government to get their finger out!
There is so much more that could be said but I’ll leave that to the man who wrote extensively on the subject and brought it to a mass audience.
Charles Dickens, Life of Our lord. Cited by Michael Slater, introduction to Christmas Carol.
If you have skipped the first three articles on child poverty, check them out here: