Poverty Reduction

Lord Desai Excerpts

Thursday 22nd February 2024 Lords Chamber

[Lord Desai (CB)]

My Lords, as the last speaker from the Back Benches, I will concentrate very much on my work on poverty. I was born in a poor country and have worked professionally as an economist on poverty for much of my career; I will not go into the details of my writing.

There is obviously a very complicated set of conditions, circumstances and consequences of poverty. Poverty is a global problem. A sociology scholar, Peter Townsend, wrote a very good book, Poverty in the United Kingdom, a fat book published by Penguin in the 1970s. He had an interesting idea. He conducted a survey asking people what sort of foods they ate: “Did you have roast beef for Sunday lunch”, things like that. People asked why he was doing it. He said, “You’re poor if you don’t feel part of the community where you live”. Something about having normal foods and things like that is very important. He conducted a very large survey with more than 2,000 observations and tried to establish that when you think about poverty, you think of people and whether they feel part of the community. It was very interesting.

A famous economist, Amartya Sen, has done a lot of work on poverty. He said, “You’re poor if you cannot develop all the potentialities that you have”. For example, it is not good enough to say that we all need a certain kind of income. If I am disabled or cannot walk, I need extra facilities and extra income to be able to do what you do. We have to think of the variety of circumstances that prevent people doing what they should be able to do.

I am going to say something fairly controversial. There is one answer. People do not like it but I have to say it. It is the only satisfactory answer that I know, and it is to have a basic income or a citizen’s income. I have been advocating that, in one way or another, for 30 or 40 years now. The idea is that just as we all have the right to vote, we should have a right to income. Some areas, such as Alaska, and some countries have implemented a basic income plan. The idea is that every adult who is eligible to vote should have a certain basic weekly or monthly income. Of course, this is a very controversial issue. People say, “Why should you pay people for not working? If they get money for not working, they will never work again and that is terrible”.

As the right reverend Prelate said, a lot of us do unpaid work, especially women. One way to think of poverty is that, at various stages of their lives, women have circumstances that force them into poverty, or at least into low-income jobs. Suppose we implement a policy I proposed in my recent book, The Poverty of Political Economy. We pay every woman who is on the electoral register £100 per weekend. I am being moderate because I do not want to frighten the horses too much. That is £5,000 per year. Let us say that there are 30 million women voters. I am making all this up, but I do not think it is impossible to finance that sort of thing. If we do that, one thing is quite certain regarding things such as child poverty, lack of heating in the house or lack of food. If the woman in the family gets an income supplement, she is going to spend it on the family as well as herself, on things such as household expenditure and heating. This has been shown in some countries that have tried it.

I know people say that income is not enough, but if you want a single policy, let us try it and let us make it universal. Rather than saying, “Let me first identify who is poor and give it only to them”, give it to everybody. Then, if you want to allow the people who are rich not to have it, they can either give it up, use it as part of a tax payment or whatever. Make it completely universal.

If you make it universal, many of the problems that families have from poverty would be tackled. Obviously, there will be problems of what to do for poor single men or elderly people, but we have pensions for the elderly. If we find that there are people who would not be helped because they are not in any of these categories, that is all right.

I am not the only person who advocates this. James Meade, a Nobel Prize-winning economist at Cambridge, was another, as was a man whose name I am trying to remember—the FT’s economics correspondent, whose first name was Sam—

[Lord Lamont of Lerwick (Con)]

Brittan.

[Lord Desai (CB)]

Yes, it was Sam Brittan. Sam Brittan, James Meade and I were the three people advocating a basic income back in the 1960s and 1970s. This is not a new idea; there is a whole volume called the Palgrave International Handbook of Basic Income, in which I have a contribution. The whole idea of a basic income is the most convincing way I have seen to tackle poverty.

There was a social justice commission appointed by John Smith, when he was leader of the Labour Party. I submitted evidence to it, but it came to nothing because he passed away.

I do not have any more time, but the whole idea of a basic income, paid to women on the electoral register, is something that we should explore seriously to see whether it works.