How should we define poverty?

We all agree we want to abolish poverty. The arguments about how to tackle poverty and low incomes in UK politics are not about the aim. All political parties and all sensible politicians want to wipe out poverty, want more jobs and better pay. Our arguments are about how you make that happen.

This week the government has ventured into the difficult territory of trying to define poverty. The World Bank says you are poor if you have less than $2 a day to spend, as that means you cannot afford the basics of food and shelter. They go for an absolute standard of poverty, where to be poor you go hungry or have no suitable home. In the UK most of the organisations who talk about poverty prefer to use a relative measure, so our definition of poverty is of a much higher basic required income so that people can assume a standard of food, clothing and housing related to the average that people in a rich country like the UK enjoy.

As one of the leading anti poverty charities puts it ” When we talk about poverty in the UK today we rarely mean malnutrition or the levels of squalor of previous centuries or even the hardships of the 1930s before the advent of the Welfare state. It is a relative concept”

Labour in office defined child poverty as living in a household with an income less than 60% of the UK average. This means in a recession as in 2007-9 when average incomes fall you can have the paradoxical effect that child poverty falls, though children in low income households are not themselves better off. Similarly, if we enter a period of faster income growth then children in lower income households can be better off but there could be more in poverty as defined if inequality rises as incomes rise.

The government is looking at a range of measures including poor educational attainment, long term worklessness in the household, drug and drink dependency and family breakdown to get to the bottom of which children are at risk or getting a bad deal. Do you agree with this approach?


  1. Lifelogic
    July 5, 2015

    If you have somewhere to live, something to eat, free health care, dental care, glasses etc, charity shops for clothes and free schooling and school dinners you are not poor. Why define it all? Surely far better to concentrate on getting the many fit to work (but feckless) into work?

    Perhaps we should send these alleged “poor” people somewhere actually poor for a couple of weeks, so they can understand what poverty really is.

    Finally a good move from George Osborne. He is to get rid of often huge social housing rent discounts for higher earners (over £30K of £40K in London). In fact a better approach would be just to charge market rents for all social housing as the low earners get help after all anyway. But then how do you justify a discount to buy but none to rent I suppose if forces them to buy where they can? Doubtless this will be dubbed a new “something tax” by Labour and the “BBC thinkers”?

    I happened to catch Julia Gillard lecturing in Cardiff on women in public life on the BBC in the early morning. Complete and utter vacuous tosh from beginning to end. Constant confusion of cause and effect, a totally absurd agenda. Can she really belief this utter drivel? That last think we need is more people like Julia Gillard in politics. Thank goodness she left Wales and went to mess up Australia instead. But why on earth did they elect her?

    1. Lifelogic
      July 5, 2015

      Well done to England Women’s football team and Heather Watson too.

      1. fedupsoutherner
        July 5, 2015

        I second that!

      2. Hope
        July 5, 2015

        JR, off topic, I read Shulz advocating that the democratic govt of Greece is dissolved and a technocrat govt installed! What else does anyone need to know about the dictatorship called the EU? Leaked reports showing the European members of the IMF tried to suppress reports that recognise debt relief must occur for Greece. What is our Govt position on both issues?

        Why would Cameron continually advocate to stay in a vile dictatorship institution like the EU where nation states are of no consideration to the those in charge of the EU?

    2. Lifelogic
      July 5, 2015

      Osborne is apparently going to do a U turn on the totally bonkers green subsidies too in the Telegraph today. Perhaps the man actually is becoming numerate and a real Tory at long last? Even if he is still ratting on his IHT promise of 8 years ago and still mugging pensions too. Get Peter Lilley, Lord Lawson or Owen Patterson on to it as soon as possible.

      1. Richard1
        July 5, 2015

        No mention of getting CGT back down to a sensible level such as 20% despite over-whelming evidence of the laffer curve effect kicking in at the current 28% level to reduce receipts, despite rising asset prices.

        I don’t see why it is more virtuous to own a home worth £1m than save £1m in cash and hand that to your children, making it less likely they will be a burden on the state. This IHT distortion will mean older people staying in unsuitably large homes for longer in order to get the tax advantage. If this is how the measure is enacted its Brownite.

        1. Hope
          July 5, 2015

          LL, I suspect that might be a fig leaf for his tax raid on pensions.

        2. Lifelogic
          July 5, 2015

          Indeed it seems he is ratting on his IHT promise even now and further delaying it. It sounds at though he is keeping the 45% income tax rate too.

          I note that Andrew Marr asked if it was a good time for this IHT change to help the the rich. Osborne just lied that he was keeping a promise. Well he is not he is ratting on over half of it and nearly ten years late too. Needless to say Marr is incapable of asking a question from the right these lefty Tories. So absurdly raving lefty & “BBC think” is Andrew Marr.

      2. ian wragg
        July 5, 2015

        I bet he keeps paying (we) the subsidies to the Scottish offshore windfarms despite them destabilising the grid. We don’t want to upset princess Nicola doe we.

        1. fedupsoutherner
          July 5, 2015

          Scottish offshore wind farms will be more expensive to maintain in Scotland due to the weather, and deep seas compared to the shallow waters in England. I hope he cuts it all especially onshore wind as it is out of control and if he is doing it as he says, to save money, then he has to do it everywhere. What is the point in stopping in England and letting Scotland still rake in subsidies? All the developers will just come up here and the whole country has to pay anyway. No, subsidies must finish – end of.

      3. Hope
        July 5, 2015

        He has to follow and act within the EU energy policy and the targets Cameron agreed to last October. Any sensible UK politician would never have given away an energy policy that is directly linked to the well being of civilians of its nation and goes to the heart of many business hence economic wellbeing of a nation.

        These points need to be rammed home to the likes of the EU fanatics who want to subordinate the UK as a region of the EU superstate.

        It is also about time someone stopped Osborne, ably helped by Heseltine, trying dissolve England into regions for the EU project. We have the second highest amount of politicians, only China has more! Cuts in the number would help any the public purse/austerity agenda, they are simply not needed or required. The last thing the UK needs is more layers of politicians.

      4. turbo terrier
        July 5, 2015


        From the DT

        “Government sources say there is little that Mr Osborne can do because the subsidies have already been agreed under long-term contracts signed by DECC while Liberal Democrat ministers were in charge”.

        “However, the Chancellor will review the system to see whether further steps can be taken to cut the cost of climate change schemes such as the subsidies, sources said”.

        I always thought that in times of peril and disaster to this country that parliament has the right to guillotine any laws that are effectively detremental to the country’s well being. In my book £1.5 trillion is a very good reason to focus the minds of MPs.

        If the Chancellor cannot revoke all these stupid contracts then he has to hit the industry with taxation ie.

        All properties with solar panels become business rated. You make and sell something that is called a business

        If the above was carried out it may well have an effect on the prices of property. Not such a bad thing.

        Land owners with two or more turbines are rated as a power station.

        Land owners receive a higher tax levy on their land that supports the turbines of say 80% still leaving them with 20% clear profit.

        Farms/forestry with more than 5 turbines are either a farm or a power station and cannot have two methods of “subsidised payments”

        The most competitive and reliable power source always receives priority to the grid. Enough of these turbines picking and choosing the time and the place to operate relying on fossil fuel back up.

        The energy product being sold has to be fit for purpose 24/7 no more asking companies to use banks of diesal generators should the lights go out.

        Cometh the hour cometh the man and the Chancellor has the opportunity and the tools to do the job, anything less will be work of the boys.

        If the RE industry take him to court the cost of the fines will be way below what Ed Davey signed us up for over the long term.

        We have to face the fact that we have a problem with our debt burden and it has got to be addressed.

    3. Lifelogic
      July 5, 2015

      Meanwhile Jacque Delors, the father of the Euro mess in Greece and elsewhere is awarded the EU’s highest honour.

      1. Hope
        July 5, 2015

        And Cameron reneging on making the Lords representative of the votes awarded. I wonder if that has anything to keep the Lords completely Europhile! Another day another broken promise by Cameron. No surprise there, move on.

    4. yosarion
      July 5, 2015

      What Osbourne is proposing is another perverse Barnett formula for London, that home of the Free market that has to be subsidized to keep it ahead of the game whether it be through X rail or a new runway whilst the rest of the so called UK waits in vain for better infrastructure.

  2. agricola
    July 5, 2015

    For sure it is not the impoverishment of income alone. On that basis pensioners are in poverty after a lifetime of contributions to the wealth of the country, but immigrants with an array of hand outs on arrival and no contributions are not.

    It is the impoverishment of up to three generations through lack of ambition beyond living off the state. Add to it the impoverishment of education brought about by political ineptitude and teacher unions with another agenda. Yes drink and drugs play their part as does gambling and the pay day loan industry. Poor health , due to a number of factors such as smoking, lack of exercise through sporting competition. I remember the Duke of Edinburgh calling it “Spectatoris” back in 1957. The appalling diet choices that the food and retail industry is allowed to push down the throats of the people. People in ignorance of anything to do with nutrition because it never played a part in their education. The industry will call it choice and are happy that the NHS is there to keep picking up the tab. I find it amazing that the nation was healthier during the deprivations of WW2 than it is today

    Thereby we have manufactured our own poor and continue to lack the will to fight those forces that find it more profitable to keep us that way. I hope your government have the courage to tell the lobbying industry where to go when setting out how to deal with the problems identified.

    1. Hope
      July 5, 2015

      Poverty will always exist as it will be relative to those who are better off. There are families better off on welfare than people who work. Govt. stats would make it look otherwise. This remains so and is still being promoted by the Tory Govt ie selling houses under its social housing policy while other struggle to save for a mortgage.

      The UK is flooded by immigrants who want a slice of the free public utilities, health and housing. Stay here long enough and the govt gives you the house! Why would they not come in their droves? The current policy is that if you buy your home next to a person in social housing it is either given to them or at the end of your mortgage you have to sell your house to live in the same care home as your neighbour who has paid nothing all their lives! Who is in poverty in this situation? Moreover who is mug for working?

      Your first priority as a govt should be to curtail the overseas aid bill that has little effect on anything other than making fat cats fatter! Very little to do with vaccinations or feeding the hungry. Overseas aid should be for humanitarian aid or where there is a clear unambiguous British interest. Cameron gives a sixth of overseas aid to the Eau to spend and does not have any say what it spends the. Only on or whether it fits any poverty criterion whatsoever. Sort out the travesty of Cameron wasting so much of our taxes would be the first step to rationalise what we could afford to help those in genuine need.

  3. Richard1
    July 5, 2015

    Certainly we need a new definition. If poverty is having less than 60% of the mean presumably in Monaco the millionaires are in poverty because of the billionaires?

    It is now possible for a family in the UK with working age parents and 2 children to receive the equivalent of c. £32K pa pretax in benefits without doing any work, plus free healthcare, education, pension provision etc. this isn’t riches but it’s absurd to define it as poverty. I suspect the only people in the UK who could now really be said to be poor – other than those whose lifestyle has contributed adversely to their circumstances -are pensioners on the basic state pension.

    We need investment and jobs not dependent on public subsidy. That means a stable transparent and simple low tax regime, balanced budgets, stable currency etc. like Switzerland, Singapore etc. we never hear this from the poverty industry and its amplifier, the BBC.

    1. Lifelogic
      July 5, 2015

      Over 52% (I think is was) of households get more back in tax credits, benefits and benefits in kind (like schools and health care) than they pay in tax. What an absurd situation to have constructed.

  4. Iain Gill
    July 5, 2015

    Poverty for me is not being able to choose your child’s school, not being able to choose your GP, not being able to afford to take the kids swimming. Being subject 100℅ to state allocation.

  5. alan jutson
    July 5, 2015

    Poverty is surely when you cannot afford even the essentials of a life.

    Food, shelter, heat, water, basic clothes etc.

    Real poverty is where you do not have a choice of anything.

    1. Cheshire Girl
      July 5, 2015

      I agree. I was a Barnardos’ child and grew up in a Foster home in a tied cottage in Norfolk. There was no electricity or running hot water, no central heating, no flush indoor toilet . Needless to say there was no fridge, or any of the luxuries we take for granted today. However I had enough to eat and enough clothes, even though some were hand me downs from other families. No one told me I was poor, so I didn’t know it.
      I’m not trying to be unsympathetic to the poor of today, but poverty doesnt seem to mean what it did just after the War.

      1. alan jutson
        July 5, 2015

        Cheshire Girl

        One of our past family members was also bought up in a Shaftesbury children’s home.
        Was given a good but basic education, and taught a trade so they could earn a living.
        Thus they supported themselves, then eventually married and bought up a family who also all worked, all done without without any benefits or State aid, as it did not exist at that time.

        Not suggesting that is how it should be today, but we have gone too far in recent decades with the Government (taxpayers) attempting to look after those who should be able to look after themselves.

  6. Michael Walzer
    July 5, 2015

    8:39, seven messages following JR’s post of the day, four from Lifelogic: that’s diarrhoea. Do you want Imodium?

    1. fedupsoutherner
      July 5, 2015

      No thanks. I find what he says is just common sense and enjoy reading what he has to say.

    2. turbo terrier
      July 5, 2015


      Some of us find his input informative and at times amusing.

      The joys of blogging!!!

      Cannot please everybody all of the time.

    3. forthurst
      July 5, 2015

      Michael: you may be under the mistaken impression that JR’s highest priority is to get us out the EU’s deadly embrace, however, there are overly sufficient grounds for believing an even higher priority is attached to the involuntary editorship of the commentaries of Lifelogic on every topic under the sun not necessarily inclusive of the topic of the day.

  7. Ex-expat Colin
    July 5, 2015

    Seems having as many children as you can keeps you housed and well fed + iphone, 50 inch box, holidays/bling etc. Meanwhile the rest of us get insulted by HMRC to pay for it along with the TV tax and massive troughing at Westminster.

    While the Tories are in Gov trimming again takes place, then of course the likes of Brown/Clegg are returned and back we go. And that is the biggest problem!

    How to make life difficult..for everybody:
    Drugs, drink and smoking is down to using cash largely. Relieve that with food only vouchers that can only be used by a named person. Identify person and harshly fine those who thwart the system. I know its been tried…try harder by using people who are not going to rob the state by taking salaries for little impact.

    No drinking on the streets still needs to be hammered.

    Force jobless, feckless into any work available after short qualifying period. Go to education classes and if not go to prison education classes…. and skills training. Not business training classes or of that ilk. I know its been tried…try harder by using people who are not going to rob the state by taking salaries for little impact.

    Doubt anybody is going to impact on family breakup, so that will be ever more a problem. But birthrate needs to be curtailed in some instances. And thats amplified by the EU invite. In fact the EU itself is another big problem in the whole context of your post.

    Cease operations of the international NHS. And non essential services that were never the remit of the NHS. You want that…you pay for it, not all of us. Like the BBC!

    Agreeing is one thing. Effective and lasting action/impact as we know from long observation is quite something else.

    Most people won’t like a miserable life for too long. There are others (too many) that could not give an everlasting toss I think. Identify them and deal with them harshly so that others following with a similar view might review their path through life.

    Not going to happen though…is it?

  8. fedupsoutherner
    July 5, 2015

    One definition of poverty: Paying for your neighbour’s electricity through your bill for his solar panels and watching the farmer up the road rake in thousands of pounds every year for his turbines while you struggle to pay for your own electricity and gas bills.. sickening!

  9. Douglas Carter
    July 5, 2015

    I suppose I’d agree with the approach but for reasons of genuine progress in the matter rather than political soundness, the links of these matters will have to be proven as rock-solid, because some of them aver outside the approved left-wing approach that it’s all down to cuts and Conservative nastiness.

    With regard to poor educational outcome, I’d want to see a possibly more strident approach not necessarily ‘linking’ poor education with poverty but making the direct accusation – that poor education contributes to a very large degree to the likelihood of poverty.

    Crime would also have to come into it. Whist some are intent on casting Police as social workers, there must also be a link in that poverty seems at its most pervasive in areas which are, for want of a better term, anti-social. Whether ghettoised, poorly-policed or neighbourhoods where a tiny number of individual troublesome families or figures dominate the nature and culture locally, more effort needs to be expended on tackling that directly. From that, as others have said, and sticky subject that it is, it’s insane to sustain the levels of imported poverty which have been prevalent across the past twenty years.

  10. turbo terrier
    July 5, 2015

    Poverty is all things to all people.

    Here I am pushing 69 working and paying my taxes on both my business and my pensions and when I go round to the “poorer” houses I see 52″ wide screens TVs plus TVs in the kids bedrooms, all manner of the latest gadgets in the kitchen and computer toys, mobile phones and i pads spread around add to which the tenants are carrying all the regalia of modern Britain, tattoos and designer clothes and to add insult to injury they all go on one if not two foreign holidays a year. You don’t call before 11am as they are still in their pit have let the kids out to school. They need to earn £18 hour to make it worth them getting out of bed. With no skills and poorly educated is it any wonder we have “poverty”. All on the back of state handouts and tax credits. If as some do find casual work, it is all cash in the hand. None of this is ever mentioned when hardship and poverty is discussed.

    Then you see the other side the pensioners who everyday in the winter have to make the choice on heat or eat no car albeit a bus pass but no money to use when they get anywhere. They have worked all their lives and due to circumstances loss of a partner, divorce, ill health funding their kids through education etc they find themselves in the position they are. They get no handouts as the little bit of extra private pension which they have to pay tax on takes them outside the safety net. They like me grew up in a generation where debt was frowned upon and you went without until you could afford it.

    Then there is the self inflicted queing up in the chemist for their methadone couples with babies in prams none working all claiming handouts. They I assume are all labelled the poorest in society.

    When will we get a situation you have to be held accountable and responsible for your actions?

    How much debt is in this country on credit, debit and store cards let alone agreed overdrafts? Sounds a bit like Greece to me and we will all know the ending of that story very soon.

    As hard as it is for the do godders to understand people have to be forced to stand on their own two feet and get into the real world. We have to have a process where if there is no contributions in there is nothing taken out.

    What a crazy world we are living in.

    July 5, 2015

    Yuri Gagarin flew into Space in 1961. This was such a cultural shock for the Clark Kents of the Western world. Akin to George Osborne discovering all the truly successful aspirational dastardly rich people had been extremely thrifty, intelligent, showing remarkable commonsense in not buying grotty little hundred year old terraced homes with iffy lead piping but flew into the economic stratosphere by staying in their council houses. Why indeed say so many Conservatives should people be penalized who have not gambled and wasted their money but made sensible choices in their savings and investments. Often, what NOT to buy or “invest” in brings greater wealth than the opposite.

    Of course it has rarely been intelligent to borrow money at a terrible interest rate, buy a commodity, in this case housing, which rises in childish-value dependent on how many more suckers do the same thing. Naturally, they sometimes fall from their lofty day dreams and thud down to earth with broken heart, and still in poverty due to the fact they have not learned by the experience, as Solzhenitsyn put it : Why can’t we understand the simple truth as Mohammed, the Lord Buddha and Jesus Christ taught us… that with property we destroy our soul? ”

    A satellite was sent into space by NASA though properly speaking it should have been called a sputnik, just after Yuri Gagarin’s Osborne moment in the 1960s. It scanned Earth and remarkably reported back to Houston that it found our planet not conducive to human life.
    If the UK government and the Labour Party need to probe Poverty then clearly we British earthlings have got a set of Clark Kents in Parliament.

    Joking aside, the reality is that many people particularly in the north of England, managers of various kinds among them, would have been delighted indeed if in their entire working lives they had ever earned average salary.

  12. A different Simon
    July 5, 2015

    Social mobility has been virtually abolished . Increasingly your outcome is decided at birth .

    Society has to choose whether it will devote it’s resources to making it clear to people what their position is in the grand scheme of things or providing them with the opportunities to reach their potential .

    As it is either you inherit enough to get yourself an over priced house or you are condemned to paying rent to the higher born for your whole life .

    You either grow up in an affluent area with access to good schools or there may not be a good school within an hours bus journey . What chance do those children have ?

    One of the truisms in life is that an education always costs . For children that cost is borne by others .

    I remember the head of an independent school talking about the level of funding his counterpart in the state sector got per child per year . It’s scandalous .

    Doubling the budget per child for education up to the age of 18 would be a start .

    As it stands the message from a toff govt and toff civil service to children in less affluent areas is clear – they are a worthless inconvenience – and unfortunately the kids are receiving it loud and clear .

  13. Bert Young
    July 5, 2015

    I do agree with the approach outlined ; standards have fallen in this country substantially and the work ethic has to be revived . Some few years ago I offered an unemployed bricklayer the opportunity to make good a wall at my property – he said he had not been well for a while and would welcome the opportunity to earn a few £’s . The day came when I expected him to start ; he did not show up . I phoned him in the afternoon to see if he was OK ; his wife said ” He was under the weather ” ; he had been drinking .

    I am sure there are many examples to highlight how being ” on benefits ” is a deterrent to the work ethic ; it is also mentioned many times in the media how the system is also an attraction to migrants . I believe the steps being taken by IDS is slowly making itself felt and is encouraging the community to eliminate benefits fraud ; equally the exposure of the cases where advantages have been taken do help .

    Pride and success at work with the benefits that come with it should be an example worth emulating – particularly to the young . Parents who create good households and set standards for their offspring to follow are the salt of the earth ; everything should be done to stimulate them .

  14. JimS
    July 5, 2015

    ‘Poverty’ will never be removed as long as it is measured relatively, which is why the Poverty Industry needs to keep that measure to keep themselves in work.

    But then I think most politicians, would-be politicians and media hacks just don’t understand percentages or averages, or the ‘Lake Wobegon’ effect – ‘every child above average’.

  15. DaveM
    July 5, 2015

    The government is looking at a range of measures including poor educational attainment, long term worklessness in the household, drug and drink dependency and family breakdown to get to the bottom of which children are at risk or getting a bad deal. Do you agree with this approach?

    Sounds like an essay question.

    Q. So, what causes idleness?

    A. Overgenerous benefits paid by leftists trying to secure votes from people who won’t even bother to vote anyway.

    Q. Why do kids eat crap making them MALnourished as opposed to UNDERnourished?

    A. They are not taught how to cook or do home economics at school so they follow the example of their lazy parents who buy pizzas and cheap burgers, and give the kids money so they buy sweets, crisps, and fizzy drinks instead of proper food.

    Q. Why do people choose benefits as a lifestyle rather than looking for a job?
    A. Because it’s easier.

    [Q. How come all the people you see who are supposedly living in poverty have expensive phones, computers and tellys, and I work 60+ hours a week and have average priced items?]

    The problem with the govt’s approach, Mr R, is that it will involve lots of people sitting behind computers compiling statistics.

    My answer would be this:

    1. Disregard the ‘lost generation’ of lazy drunken gits, because no matter what the kaftan-wearing tree-huggers might think, they are a waste of oxygen. Teach children at school that there are many, many jobs they can do. Teach them that living off the state is not a lifestyle choice. Teach them how to shop, cook, and economise, and give them a sense of self-worth by targeting their talents rather than assuming that every child is going to grow up to be a dull-headed office worker sitting behind a computer.

    2. More importantly, ensure that there is a strong tie between education and work, and stop allowing immigrants to pour in to our country and take newly created jobs and low-skilled jobs that could be done by kids (on Saturdays and in school holidays), mothers of young children, and students. Ensure welfare benefit and housing allowance is distributed on a fair basis (best done at local level I would suggest, in order to allow a bit of human interaction – shock horror – and judgement).

    3. Turn Job Centres back into Job Centres rather than computer-based benefit claim centres.

    OT – One of the stated aims of Defence is to defend the UK’s trade and interests abroad. I concentrate here on the word “trade”. I have never usually agreed with the lazy attitude of “send in the army” for any situation, but, unless I am much mistaken, don’t the lorries who cross the channel back and forth and use the port of Calais contribute to the UK’s trade?

  16. Denis Cooper
    July 5, 2015

    “All political parties and all sensible politicians want to wipe out poverty”

    Are you sure about that? It seems to me that the Labour party in particular thrives on poverty, and unemployment, and substance abuse, and disease, and crime, and all manner of social problems, and their eradication would be the last thing some of its leaders would want as it would largely destroy the raison d’etre for their party.

    And if we ever get close to eliminating problems generated internally within the country, then Labour’s answer to that impending shortage of problems to secure their electoral base will be to import more of the problems from abroad.

    1. Hope
      July 5, 2015

      Well said. The sentence is absolutely not true. Labour scoured the world for mass immigration to get them votes! After reading the reports on overseas aid the Tory govt is not properly addressing the issues or even attempting to do so. How can it give about £2 billion of overseas aid to the EU to spend without having any say on what it spends our taxes on! This is in addition to the £14 billion EU club fee. If the Tory govt was genuine then the £28 wasted on overseas aid and EU contribution would be spent on those in real need. I suppose using the navy as a ferry to transport people from North Africa to Europe Mir be considered helping poverty?

  17. formula57
    July 5, 2015

    You have not yet asked us what we want to see in next week’s budget. I am concerned that the Chancellor will not have enough time to make the changes you will recommend to him in consequence.

    New in recent days is the disgraceful consequence of the EU’s demand to recalculate the FSCS limits that sees a downward revision so that the word and bond of HM Treasury must now be seen as flexible guarantee or, in Blair-speak, an aspiration not a commitment. Surely the Chancellor will use the early opportunity presented by his budget speech to correct that view by restoring the limit to that promised?

    1. Graham
      July 5, 2015

      It’s not what they say it’s what they do – yet again.

      There are so many EU tentacles across our society that it would take a Herculean will to cut them off. Can you see anyone (perhaps Farage) on our politicially barren landscape able to even contemplate that!!!

    2. Denis Cooper
      July 5, 2015
      1. formula57
        July 6, 2015

        Thank you for the link. The preamble to the directive offers scope for the UK government deviating from its provisions, it seems to me, but in any event as Chancellor Merkel has said, where there is a will, there is a way.

        The FSCS misdescribed the guarantee if the Directive was to be complied with and HM Treasury permitted the misdescription. The least they can do now is provide for their original lie to be preserved by keeping the amount of the guarantee at £85,000 for fixed term deposits that extend beyond the revision date. Yet signing up to the Directive as drafted seems a wrongheaded thing to have done.

        1. Denis Cooper
          July 6, 2015

          It’s a long and complicated, and frankly very boring, Directive, and I didn’t want to spend the time reading every word to see whether there might be a loophole that Osborne could use if he wanted to do what you want him to do.

          If not, legally he could only go against the Directive if Parliament authorised him to disapply it through an Act using the “magic words” which have been proposed by Bill Cash, “notwithstanding the European Communities Act 1972”.

          Scanning the Directive I see that like many other EU measures it is presented as Single Market legislation:

          “This Directive constitutes an essential instrument for the achievement of the internal market from the point of view of both the freedom of establishment and the freedom to provide financial services in the field of credit institutions, while increasing the stability of the banking system and the protection of depositors.”

          and therefore presumably it was decided by qualified majority voting, without the UK government being able to veto it even if Osborne had objected to it.

  18. formula57
    July 5, 2015

    And on child poverty, I agree with the government’s approach but it might expressly address social exclusion, notwithstanding that such phenomenon is not necessarily a fucntion of poverty.

  19. Edward2
    July 5, 2015

    There certainly needs to be a different way of measuring relative poverty.
    Under these rules we can correctly say there is more poverty today that a century ago.

    Under the current definition poverty cannot ever be eliminated.
    It is mathematically impossible as there will always be people under the set average.

    If the population rises poverty, as defined, will inevitably rise.
    So to reduce poverty simply reduce the population.

  20. English Pensioner
    July 5, 2015

    I believe that the World Bank is correct when it defines poverty in terms of an absolute figure, it shouldn’t depend on other people’s earnings. I feel that it should be defined in terms of income, linked to the RPI, plus possessions.
    Only too frequently when we see so-called “poor” people on television, they seem to have all the trappings of modern life from computers, mobile phones, huge televisions, etc, so the money must have come from somewhere. Are the “poor” children who arrive at school without breakfast doing so because the money is being spent on smart-phone rental or some similar luxury? With all the benefits and allowances payable by the state to those with low incomes, I find it hard to believe that there is anyone in this country who is genuinely in poverty.

    1. Monty
      July 5, 2015

      Indeed, our threshold measurement of poverty should be defined in absolute, objective terms, as a function of the costs of neccessities. Wholesome and nourishing food, a decent, secure home, space and water heating, clothing, boots and shoes, beds and blankets, the resources to keep one’s family clean and presentable, money for dentistry and opthalmic services, with maybe a modest margin to allow for rainy day savings.
      I reckon we’re not far off that already though.
      What government can’t and shouldn’t try to fix, is the fact that some of the claimants will always run off and spend their food and gas money on expensive hair extensions and a designer handbag, then bleat that they’ve only got £11.47 to live on for the next two weeks.

    July 5, 2015

    Poverty could be described as not having the money to buy a kalashnikov. So many in the UK are in that poverty-trap

  22. Stephen Berry
    July 5, 2015

    I would go for an absolute standard of poverty such as the $2 a day proposed by the World Bank. That was also, I believe, the way that Beveridge looked at matters. The unfortunate thing about this sort of measure is that, for practical purposes, it would mean poverty has been abolished in the UK. Why unfortunate? There are many academics, social workers an politicians whose very working existence depends on the continued existence of poverty.

    The relative definition of poverty – really inequality – leads to some paradoxical conclusions. Imagine that we take the present average UK wage as £25,000 a year and assume UK output doubles roughly every 25 years, as it has for the last 200 years or so. Within the next 100 years, average wages (in current prices) will comfortably reach £200,000 a year. So, someone with an income of £100,000 could then be classified as poor.

    A further problem with these statistics is that they are snapshots of people in a society at a particular point and do not estimate a person’s lifetime’s earnings. A person in their twenties generally earns less that an person in their thirties. A person in their thirties generally earns less than a person in their forties. There is a natural ‘inequality’ built into the income of a person at different stages of life. Statisticians need to look at the lifetime earnings of individuals and I suspect they would find that much present inequality disappears.

  23. turbo terrier
    July 5, 2015

    Answer to your question is yes.

  24. Rods
    July 5, 2015

    Breadline: Water, food, basic energy, clothes, accommodation and a telephone.

    Poor: Can’t afford the accepted normals in life like adequate heating, transport, basic household appliances, being able to replace or repair things that break, TV tax, basic leisure activities or any holiday. In such circumstances personal productivity goes down as everything is dictated by cost. Eg. self-repair of anything that breaks, walking / cycling everywhere or when absolutely necessary using public transport, cooking everything from basic ingredients etc., which is one of the reasons why escaping the poverty trap generally requires working harder / longer hours than for richer people. But with dedication and hard work you can and will escape.

    When you hit hard times, which most serial entrepreneurs will probably do, at some point in their life (only 10% of businesses survive more than 5 years), you find out how little you can actually survive on and what are the real basics and what are luxuries. Don’t make the mistake in thinking that the Government will help in anyway (however much tax you have paid in the past and I’ve paid more than 95% of the people in this country) as in my experience, they vary from total incompetence to liking nothing better than kicking an entrepreneur when you are down, whereas most other people and organisations are much more helpful.

  25. turbo terrier
    July 5, 2015

    Another reason to re-examine the RE industry. If all the jobs promised had materialised then some good would have come out of the projects. Todays report in the Scottish sunday herald asks the basic question. Where are they? Another reason for the chancellor to wield his axe.

    Only six per cent of the 30,020 jobs projected to be created in Scotland by
    2015 through the growth of the offshore wind industry have actually
    materialised, the Sunday Herald can reveal.

    A 2010 report on the future of the sector commissioned by industry body
    Scottish Renewables forecast that, under the most optimistic scenario,
    30,020 full-time equivalent jobs would be in existence by 2015 and that
    this number would grow to 48,554 by 2020.

    But the most recent figures show that in 2013 just 1,842 people were
    employed in the sector in 2013: a figure that is unlikely to have changed
    substantially as no offshore wind farms have been built in Scottish waters
    since then.

  26. acorn
    July 5, 2015

    As IDS is slashing the DWP / Welfare budget, it is natural that he would want to frig the poverty numbers, which he knows are going to get worse and give the opposition something to aim at. I assume that he knows that the definition of “poverty” is an OECD and EU common standard for international comparison (EU-SILC).

    EU-SILC data is calculated by an independent National Statistical Office in each EU state, to try and keep the data honest. Except in the UK, where the job was taken away from our own Office for National Statistics in 2011 (NOTE: 2011), and given to the DWP. Basically putting the Fox in charge of the poverty data Hen-House, four years before the 2015 election. EU-SILC uses the last four years of data in its calculation.

  27. The Prangwizard
    July 5, 2015

    I made a ‘trip down memory lane’ recently to the part of Yorkshire where I was born and brought up.

    There wasn’t much money around then, but most people seemed to have work. There was a very limited amount of state benefits. Most people were not fat, they did not have enough spare money to make themselves fat. They could not afford good clothes but they did not complain about being deprived. I tire of watching people on TV today in their well furnished houses complaining about their deprived lives with their bellies bursting out of their shirts and hanging over their trousers. They have too many apologists in the media and politics.

    The limited types of work there in my youth did not appeal to me and with the support of my parents and with the education in which I was encouraged and helped, I left.
    I’m glad I did.

    People and local politicians should stop complaining and expecting others, and by that I mean the State and the taxpayer to help. I’m all for helping those who cannot help themselves, but not the ‘undeserving poor’. I’m sick to death of hearing from and about them.

  28. turbo terrier
    July 5, 2015

    If we really really want to help the poorest in our society, you cannot ignore figures like this. Do hope the Chancellor reads this blog.

    RE windfarm jobs in England and Wales subsidy £100K/per job
    In Scotland £154K/job
    £1.2 billion paid to land owners.

    How can the RE industry bleat on about the removal of subsidies not being fair?

    Hopefully there are more than a few in Westminster loading his budget day guns.

    Totally unjustifiable and unsustainable. What a legacy from Mr Davey?

  29. fedupsoutherner
    July 5, 2015

    Can I suggest that madcap schemes such as renewable energy will make us all poor soon. The link tells us how mad it all really is and I hope George Osborne is going to be relentless stopping this crap.

  30. Dennis
    July 5, 2015

    Abolishing poverty – Mr R says, ” Our arguments are about how you make that happen.

    Again Mr R has no conception (this is my criticism -remember you asked for it?) of first principles. He doesn’t think of what is required to fuel this ‘happening’. Is there anything? If so how much is available? If available and it is used what are the consequences not just for the UK but for all.

    Again Mr R’s thinking implies one can just pluck economic wealth out of a infinitely deep hat full of goodies. Unfortunately he is not alone even among posters here.

  31. Qubus
    July 5, 2015

    This seems to me to be a nonsensical definition of poverty. First of all, it is NOT poverty but relative poverty. Since I assume that there is a distribution of incomes in the UK, there will always be an average or mean value of income. This means that there will always be a figure that it 60% of this mean. So, whatever we do, relative poverty will always exist. What we need to be concerned with is absolute poverty.

  32. Margaret Brandreth-J
    July 5, 2015

    This is a difficult one and it is a sin for people working every hour God sends and still not be able to afford holidays, a social life, and have the ability to pay for maintenance of their home.In my life I have been relatively well off and relatively poor, but I look at those living on the street, dying in the cold, hungry and I still regard myself as lucky. There are days when I went without food to buy petrol to get to work, but I had an old car, yet when I was training I had to get 3 buses to get to work.The difference was single parent hood and 2 young children to look after. We cannot compare peoples individual lot, but it doesn’t do any harm if we look at our own existence and then other peoples and ask ourselves if we could manage.
    No one, absolutely no one should be homeless:this situation is the epitome of cruelty.

  33. forthurst
    July 5, 2015

    Why is it the government’s responsibility to undertake the work of the Sociology profession? Cannot the Sociology profession not produce one insightful, off-the-shelf report into ‘child poverty’, not one that instead of calibrating ‘deprivation’, defines of what a child has been deprived and by whom and what possible remedies are open to the child’s guardian or other agency beyond throwing more taxpayers’ money at the ‘problem’?

    I believe that the worst deprivation a child can suffer by far is that of the love and protection of a parent; consequently, when I read about children, having been removed from their parents ‘for their own good’ by social workers, become subject to exploitation for the purposes of the adult gratification of vibrants or others, I am enraged that the aforementioned social workers are neither prosecuted nor summarily dismissed, but I am even more enraged by the fact that some of those social workers might feel genuinely intimidated by the copious thoughtcrime laws inflicted on the English by people who are not and enacted by parliaments that put the interests of those of alien ancestry, as a matter of course, before those of the English, even when it means that some parents have not been able to requisition the authorities’ protection for their own child from predation when called: the purpose of thoughtcrime law is to intimidate the English into silence, as such it is as malevolent in theory as it is malefactory in practice.

    1. Margaret Brandreth-J
      July 6, 2015

      I feel the same anger and have every reason to back you up in your assertions.

  34. sm
    July 5, 2015

    The system seems designed to trap people in poverty and is particularly severe on singles with no children. Indeed it’s difficult to see how honest people who strive are able to claim anything- as they continually self finance any loss of income.

    1) No help – unless assets are below £16k- being restricted until £8k.
    2) Contributory principle on benefits almost completely removed- JSA for 6 months only.
    3) Savings (if you are able) are therefore not logical if they lead to draconian cutoffs on any help. Difficult to save a mortgage deposit.
    4) Savings via a pension usually fund the financial industry rather than a future return of purchasing power in the future. True unless we more carefully calibrate removal of state help.
    5) Savings are now at risk to be seized (slowly or more quickly) when governments need to fund currently favoured spending. (Overseas aid etc)
    5) Council Tax unrelated to income.
    6) No ability to claim back taxes paid in prior years or benefits based on REAL contributions.
    7) No ability to carry forward unused allowance if no income.

    Perhaps thought should be given to this ridiculous notion that saving is a logical option rather than spend now and retain state help. Work and Labour is being undermined/undervalued and or unavailable or subject to massive pressure due to immigration hence deflation on labour costs but inflation elsewhere.

    The return on investment or labour is probably higher if you spend it now.

    Its obvious what Labour does to trap votes. It used to be less obvious with the conservatives do.

    So what will a conservative government do? Probably more immigration,more austerity until we have a serf class. Is that different from Labour?

    Welcome to animal farm. They call this democracy and freedom.

  35. Martin
    July 5, 2015

    The one thing that is missed out is freedom.

    A friend’s son has gone to school usually with kids of his own by train since he was 11.
    They have had a few adventures over the years. Now at 16 he is amazingly assured. Those who have had the school run done by mummy are in contrast lacking in confidence and have never used a bus or train or their own.

  36. libertarian
    July 5, 2015

    “The government is looking at a range of measures including poor educational attainment, long term worklessness in the household, drug and drink dependency and family breakdown to get to the bottom of which children are at risk or getting a bad deal. Do you agree with this approach?”

    That is the WORST definition I’ve ever seen. I fit totally into that description and I’m a multi millionaire , what a load of guff. Hey how about stop interfering in peoples lives, how about a definition of poverty being when the government take more of your money than you keep?

    Poverty is relative, we have a duty as a civilised society to protect the weak, infirm and impoverished which we do with our advanced welfare state. When will politicians ever learn that statistical based target setting is a recipe for disaster? You have destroyed the value of education in this country with the stupid A-C grade targets that most employers now ignore completely. Politicians have completely destroyed the value of a University education by the same method. The NHS is a hopeless and inefficient supplier of health service due to its ridiculous target based management. The group most likely to suffer poverty are our senior citizens because government climate targets have made energy unaffordable, because politicians stole their pensions, because politicians have manipulated interest rates on their savings to make them worthless . The best way it would seem to banish poverty is to scrap politicians. Give over

  37. Chris S
    July 5, 2015

    Child poverty is one thing adult poverty is another.

    If parents smoke, drink and take drugs but as a result have no money left to feed and clothe their children, the children live in poverty but the parents clearly don’t

    What activists and politicians won’t admit is that most of these problems are not caused by lack of money – there’s plenty in the system – it’a a lack of intelligence.

    It’s impossible to micro-manage the lifestyle of all of those people of low intelligence so politicians end up being shamed into throwing money at the problem. Our money.

    Not sure what the real answer is but it isn’t throwing around my cash !

  38. Bill
    July 5, 2015

    I would prefer a definition of poverty calculated in relation to the cost of living i.e. the cost of the necessities of life: food, shelter, clothing and accessories that are necessary in the modern world (a mobile phone and so on). I realise the cost of necessities is related to average income and that as income goes up, so prices go up. But a focus on costs rather than relative incomes would mean that poverty would become much more an absolute measure than anything else. The problem with Labour’s preferred statistic is that it messes around with the bell curve and effectively changes its shape in an effort to ensure that as few people as possible fall the band 60% below the average.

    If we define poverty by costs of living, then we don’t conflate poverty with inequality. The two concepts can be separated properly.

    1. A different Simon
      July 5, 2015

      Bill ,

      Should necessities also include being able to make provisions for ones old age ?

      A large proportion of families , perhaps over 50% , have to be subsidised even when working because accommodation costs are just too high .

      In order to buy all the necessities , someone in the UK has to earn around 4X the wages of their counterparts in the developing world .

      All we get from unions , Labour politicians and Conservative politicians is rhetoric about how wages must rise .

      None of them ever consider why wages must be so high in the first place or the inevitable consequences of the situation .

      1. Bill
        July 6, 2015

        @a different Simon. I am not an economist. My instinct would be to say something like this: the old age pension should be set in relation to the average wage in such a way that savings might bring the pensioner up to the level of the average wage. I think the current aim is to set the pension at £140 per week or £7k per year. People on benefits get about £14k per year, and you can live on that if you have help with housing. This means that if people can get an occupational pension or annuity of about £10k per year then, when this is added to the state pension, you would have about £17k per year. That is still short of the average wage and one would hope savings could help her. If you live 20 years after retirement savings of £60k would take you through to the age of 87 in reasonable comfort, and that is about how long you would expect to live. Sorry if my answer is not very helpful. This is not my area of speciality.

        1. A different Simon
          July 6, 2015

          To get an inflation linked annuity of £10,000/year from age 65 would cost around £300,000 . Add in a further £60k and we are up to £360,000 .

          I doubt even 2 out of every 10 private sector workers will be able to manage that .

          Accommodation costs will have to be driven down considerably to enable people to build up those sorts of savings .

          The money which would have gone into saving in an earlier age has been appropriated by the mortgage lenders .

  39. fedupsoutherner
    July 5, 2015

    John, poverty may be relative but we all know that many people on these tax credits pay hardly any tax anyway and work very few hours a week to qualify while those that work full time hours get nothing. There are many ways to save money on the welfare bill and one that springs to my mind is this. I personally know two families with children that are disabled. They have both got mobility cars for their children and yet while the parent lay in bed in the mornings a taxi comes and picks their children up and takes them to school. Why have they been given mobility allowance and a new car and then expect the state to provide transport??? What a waste of our money. I am fed up with seeing people with children, working part time hours but getting better than full time wages, living it up down the pub, getting tattoos galore and having the latest gadgets in their homes and then going down to get free grub from the food banks and having the life of old riley while others work full time and get nothing.

  40. M Davis
    July 5, 2015

    True poverty, is when people do not have enough water, food, or a roof over their head. There is no real poverty in this Country. I use the bus on a regular basis, going through Council Estates, where the poorest people usually live. If you saw the amount of people using their phones and ipods, even children, and the young with expensive prams for their offspring, you could be forgiven for believing that they were all really quite well off. Most of the houses sport Sky dishes and most houses have at lest one car in the drive. Poverty is relative.

  41. Denis Cooper
    July 5, 2015

    I’m surprised, but glad, that the Greek referendum is heading for a solid “No”.

  42. Anonymous
    July 5, 2015

    Definition of poverty ?

    If one cannot afford to pay for a BBC licence.

    Some 10% of court cases are taken up with non-payment of licence fees. This shows that the liberal-against-crime BBC is not so liberal when it comes to crimes which harm it and therefore has no argument when its members say that other crimes (usually cannabis/cocaine use) are a waste of court time.

    Decriminalise non-payment. How could the Left possibly object ?

    BBC funding of pensioners ? Brilliant idea ! How could the Left possibly object ?

    It’s a double whammy when combined with their self inflicted loss of Top Gear.

    1. a-tracy
      July 6, 2015

      I’ve never thought about BBC licence court cases and the cost before. How are these processed do the accused have legal aid and lawyers to represent them or is it like a single magistrate making the decision?
      Isn’t there just a gadget now that could stop any tv signals going to that house that could be attached to properties not paying? There must be a technological answer to this.

  43. a-tracy
    July 6, 2015

    Do we know the average wage by region? Is there much difference between the average wage in the NE, NW and London and the SE for example?

    I know someone with a swimming pool in her back garden, massive satellite connected tv, mobiles phones for all etc. after being on benefits her entire life, its not the way I’d choose to spend benefits but she’d be classed as in poverty.

    We shouldn’t be selling social housing off cheap to tenants, especially people who have been on housing benefit the entire time they’ve lived in the house. There will come a day when we can’t get our state pensions out of the bank and our children renege on our promised retirement benefits, it’s simply a pyramid that’s going to blow and we need to really think about housing none working families for more than five years in the centre of the biggest job creation zones like London, whose essential workers then have to commute for hours because there is no local housing left for lower paid working families. without immigrants living ten to a house in London how would London function?

  44. Colin Hart
    July 6, 2015

    By defining poverty as we do – as a relative measure – we ensure both that ‘the poor are always with us’ and that there is a continuous justification for socialist policies.

  45. libertarian
    July 6, 2015


    Here are approx average salaries for 2014

    UK as a whole £27.500

    Wales £21k

    NE £ £24 k

    NW £26.6k

    Midlands £30k

    SE £33k

    London £36k

    1. a-tracy
      July 8, 2015

      Thank you, I’m amazed at those figures. Our public sector salaries are the same in Wales as elsewhere in England aren’t they?

      I’m curious what the median salaries are in each region.

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