Poverty

Lord Desai Excerpts

Thursday 14th July 2016 Lords Chamber

[Lord Desai (Lab)]

My Lords, it is a privilege and an honour to follow the noble Baroness, who has done so much for digital literacy in this country. I entirely agree with her last suggestion that people in the charity field should improve their digital skills. The Charity Commission should also improve its website. I have been there and it is a nightmare.

The noble Lord, Lord Bird, started by saying that poverty is a complex issue. He has done a great deal about it; I have done nothing similar but I did a great deal of measuring of poverty when I was an active economist.

It is striking that when we started thinking about poverty, we thought first in terms of nutrition—do people have enough money to buy enough food for subsistence?—and all the measurements started in terms of calories. When Charles Booth was wandering around the streets of east London, he spotted poverty when he saw children playing truant from school. He put his emphasis on what it was that made those children truant. He was looking at a new-generation problem, and it turned out that their parents did not have enough money to pay the fees for primary school education because, despite England being a rich country in those halcyon Victorian days, we did not have free primary education.

Starting from there, what we have heard in the debate is that poverty is a complex issue because lots of different things are mixed up with it. At bottom, it is about a lack of spendable income. Money in your hand can solve a lot of problems. Around 40 years ago I was doing some work in connection with Peter Townsend’s pioneering efforts to measure poverty. He pointed out that national insurance, or whatever income supplement there was at the time, was inadequate and should have been 15% higher. I think that a universal law for measuring poverty is that the poverty level is always 15% higher than whatever the Government pay. We know that Governments are always slightly meaner than they need to be.

We also have problems around aspirations, problems around disability and the problems faced by carers, whose lives are blighted because they do not have enough money to have any kind of life outside caring. We need to view poverty as a multidimensional issue which Professor Amartya Sen—as many people will be aware—in the course of his lifelong work explained in terms of the notion of capabilities. We would like people to be capable of many things throughout their life, whether that is good health, activity, the pursuit of knowledge or the pursuit of happiness, whatever it might be. In a sense, the poor are those who do not achieve many of the capabilities that should be available to them.

We have spent too much time using a false measurement of poverty, which was established by the European Union; that is, 60% of median income. I think that is the silliest thing I have seen in my life. I know of no income distribution in any country where the distribution of income is such that no one is under 60% of median income. There always will be people living at that level. It depends on how high the median income is. Now that we have Brexited, I hope that one of the few things the Government could do is set up a proper measurement of poverty that really accounts for how many poor people there are, how many poor children, and how many different ways people are poor, and whether it due to dependence, disability, a lack of digital skills, inadequate housing and so on.

We must recognise that this is a complex problem that requires a suitably rational allocation of money. Of course money is not plentiful; it is always scarce, so we have to be careful about how it is allocated. We must also look beyond current poverty to the lifetime chances of people in poverty. The investment required in children’s health and education is possibly one of the highest-paying that could be made in removing poverty. Tackling poverty is a complex and multifaceted task. I am sure that the Minister will tell us in his reply how universal credit will take care of most problems. I am sure that it will, but I repeat my fundamental law: add 15% to whatever you were going to give in universal credit, and your problems might then be solved.

Let me say lastly that when we look at poverty in the UK, we must not forget that the real poverty is elsewhere. We must not slacken our efforts to fight poverty around the world as well.