New Working Paper – Using the evidence base on poverty

Today sees the publication of a new Working Paper from the North East Child Poverty Commission. The paper looks at the use, misuse and occasional ignorance of evidence in child poverty policy, drawing on over a century of social scientific research around this issue in the UK.

Poverty is an issue that has been examined for over 100 years in the U.K. and as Professor David Gordon has argued, ‘not a single study has ever found any large group of people/households with any behaviours that could be ascribed to a culture or genetics of poverty’ (2011). Despite this available evidence, the current government strategy for tackling poverty focuses primarily on changing individual or familial behaviours.

Some local authorities adhere closely to this narrative, despite a suggested focus on ‘evidence-based policy’ which should rule out many of the activities being proposed. For example, the North East Child Poverty Commission report ‘Local authorities, local duties & local action’ found that some local authorities identified ‘low aspirations’ and ‘cultures of worklessness’ as major barriers to people escaping poverty despite recent, accessible evidence from researchers in the North East which suggested alternative forms of action might be more beneficial.

The paper draws a dstinction between social scientific and empirical evidence and evidence produced by organisations with close links to politicians, which fly in the face of facts. It is, perhaps, perticularly timely given the recent publication of a report on education by an ‘independent’ think-tank which yesterday drew criticism from Helen Barnard of the Joseph Rowntree Foundation who argued that

‘Sensationalist stories of parents who cannot be bothered to toilet train children make for good headlines; they have little to do with the reality of closing the attainment gap.’

Kind regards,

Steve

Written out of the picture?

This week we launched a report exploring the role of local services in tackling poverty amongst asylum seekers and refugees.

The Poverty and Social Exclusion website very kindly offered to host a guest blog on the topic for us and so we’d like you to click here to find out more about the report and to get a copy of it. You an also get a copy by clicking directly on the image above

The report was jointly authored by the North East Child Poverty Commission and the Regional Refugee Forum North East and was funded by the Big Lottery and the Joseph Rowntree Foundation.

Best wishes,

Steve

“In search of the scrounger” Plus ca change…

A couple of days ago I got the book ‘In search of the scrounger’ by Alan Deacon out of the library and thought I would share a few of the paragraphs from the Introduction and Conclusions chapters. The book covers the inter-ward period and, more specificially, the 1920’s. Despite the near 100 year difference, the concerns of politicians and administrators in relation to social security sound all too familiar to current discussions around Jobcentre Plus targets, sanctions, tightened  conditionality and, of course, ‘scroungers’. All emphases are mine

“Throughout the 1920s discussion of unemployment insurance in Britain became increasingly dominated by the question of abuse. In particular, there developed a bitter controversy over the administration of a series of regulations which were collectively known as the genuinely seeking work test … Between March 1921 and March 1930 nearly three million claims for benefit were refused because the claimant had failed to meet this condition. By 1927, one claim in ten was being disallowed on the grounds that the claimant was not genuinely seeking work, and in some areas the proportion was over one third. At no time in these years did any prominent politician or government official seriously suggest that the work they were supposed to be genuinely seeking actually existed.” (p1)

” … the focus of attention must primarily be upon those who were directly responsible for the formulation of policy in this area: the Ministers and senior officials of the relevant government departments. It was they who demanded that the unemployed repeatedly demonstrate their willingness to work in a period of mass unemployment, and it is their perceptions which have to be understood and their decisions which have to be explained. Those explanations, of course, must be sought in terms of their wider economic and political aims, and the role which they perceived that the test could play in the realisation of those objectives.” (p1)

“Any assessment of the seeking work test must begin by acknowledging that its abolition in March 1930 did enable some claimants to draw benefit even though they were not looking for work at the time of their claim. It is argued, however, that such abuse was largely confined to married women and that even amongst this group the extent of the practice was considerably exaggerated by contemporaries. Certainly, there was no need to impose the test on all groups of claimants, and the campaign to ‘tighten-up’ the administration between 1925 and 1929 was totally unnecessary. The question remains, however, whether that campaign was the result of folly, malice, or both.” (p87)

“In short, the test was a sledgehammer to crack a relatiely small – and often exaggerated – nut. The use of this sledgehammer, moreover, had profound consequences for the administration of benefit, and affords a classic illustration of the impact of departmental pressure upon the ways in which local officers utilise their discretionary powers.” (p88)

“In the case of the test, the Ministry of Labour left its officers in no doubt as to what was expected of them. Their task was to detect and penalise malingering, and the accomplishment of this purpose was to override all other considerations. Olive Stevenson has recently observed that the “very existence” of powers to restrict the supplementary benefits paid to unemployed men or separated wives “tends to arouse suspicion in the minds of officers or to suggest to them that higher authority wants them to be suspicious”. In the 1920s that suspicion was deliberately fostered, and by the end of the decade the staffs of the Echanges were obsessed with the aspectre of abuse.” (pp88-89)

“(A report by John Hilton) found the interviewing officers convinced of their ability to spot a scounger – ‘a groundless and dnagerous faith’ – and often neglecting their duty to help claimants secure work. This, he believed, was a direct result of the pressures put upon them from above.” (p89)

“The seeking work test was as pernicious as it was unnecessary. It led to hundreds of thousands of unemployed men and women being arbitrarily deprived of benefits which they desperately needed, and forced many more to make repeated journeys in search of jobs they knew did not exist.” (p89)

“If the seeking work test was not prompted by malice, it was ‘tightened-up’ with a callous disregard of the hardships and injustices which resulted.” (p91)

We have previously blogged about the increase in ‘in-work conditionality’ here and the role of the DWP in arousing suspicion of benefit fraud with their ‘Benefit thieves’ campaign here

Best wishes,

Steve

What is the ‘economic reality’?

An interesting blog post from Shaun Rafferty at JRF last week suggested, in the byline to the post, that ‘Economic reality means the Living Wage can’t be compulsory’ and then went on to argue that lobbying to make the Living Wage compulsory was ‘self-defeating’ because ‘It’s an economic reality that in the current operating environment there are many employers who genuinely couldn’t afford to pay their staff the Living Wage.’

This got me thinking about what the economic ‘reality’ is and I guess my reality is slightly different from Shaun’s (more post-modernism later). My view of the economic situation is that many people in this country ‘have never had it so good’, so to speak, but that this affluence sits quite uncomfortably alongside poverty. There are huge inequalities in wealth, but still ots of wealth in the UK as the figures below help to demonstrate.

The ONS suggested last year that household wealth in the UK had hit £10.3 trillion in 2008/10. The ONS website states that

Mean household total wealth grew from £373,000 in 2006/08 to £418,000 in 2008/10; the region with the highest mean value in 2008/10 was the South East at £562,000; the lowest was the North East where mean household total wealth was £322,000

Ruth Levitas used the table recently to highlight how the top 10% of earners received 10% more of total net income in 2009/10 than they did in 1979 whereas the bottom 10% saw their proportion drop from 4% of total net income down to 1% over the same period. So, the put it quite bluntly, the rich have got richer and the poor have got poorer over the last 30 years.

More recently, the Sunday Time published its Rich List for this year which showed that ‘The wealth of the richest 1,000 has reached a record high – £450bn. The increase in wealth is significant, with 11 new billionaires being added to the list between 2012 and 2013.’

However, not all employers are in the top 10% of earners and Shaun’s point was about the operating environment, but last year it was reported in The Telegraph that business investment in the UK was slow ‘despite a corporate cash pile now worth more than £754bn’. The figure, taken from an Ernst & Young ITEM Club report, equates to 50% of gross domestic product and the report was expected to say that say that ‘while businesses are in a strong position, British households remain under intense pressure.’ (my emphasis)

And, of course, there is the issue of tax avoidance and evasion. HMRC conservatively estimate the tax gap as around £32 billion. Richard Murphy at Tax Justice UK has estimated it at potentially in excess of £120 billion. Put simply, if everyone paid the tax they were supposed and paid it on time, there would be more than enough for poverty to be eradicated in the UK and, if distributed differently, there is more than enough money to ensure that all employers could afford to pay the Living Wage to their staff.

There is almost blanket acceptance of the ‘need’ for austerity and the tough ‘operating environment’ that this creates, not least in social policy areas such as poverty and low-pay, where policy solutions have to ‘fiscally credible’. However, the figures above – from diverse sources – suggest that the economic reality might not be all it seems. Indeed, if we were to get all post-modern about it (and I said I would return to this) we might begin to think that the ‘economic reality’ was in fact a ‘hyperreality’ – a simulation or representation of reality that is difficult to distinguish from reality.

 

 

“People where I live want to work….”

A couple of weeks ago we highlighted the discussions that had taken place in the House of Lords concerning the benefits up-rating bill and the strength of feeling around it. Yesterday, in discussions about the Jobseekers (Back to work schemes) Bill – more commonly understood as being about the ‘Poundland case’ – it was the turn of the MPs. The discussion based around the government’s proposal to introduce emergency legislation which would mean that they would not have to re-pay £130,000,000 that had been withheld  from people whose benefits had been sanctioned illegally.

Two of the strongest interventions came from MPs from the North East – Ian Lavery of Wansbeck and Grahame Morris from Easington. Below are some of the comments that they made in opposing the bill, which went against the wishes and official position of the Labour leadership. Politicians often get a hard time in our country at the present time and are often accused of being ‘out of touch’ with what is happening in ‘real life’. The comments below suggest that this might well be an unfair accusation in some cases. I appreciate that I could be accused of regional – or indeed political – bias in highlighting these contributions to the debate. I fully accept the regional bias charge and would also remind readers that the official Labour position was to abstain from the bill. (For info, 6 North East MPs voted against the bill – the two below, Ian Mearns, Dave Anderson, Mary Glindon & Nick Brown, three voted for the Bill – Guy Opperman, James Wharton and Ian Swales – but I couldn’t find contributions form them. The rest didn’t vote, from what I can gather). However, in order to redress the potential political bias somewhat, I have given the final word to Iain Duncan Smith, and have emphasised some of his comments  as they may be of particular interest….

Ian Lavery

The Bill is being introduced to save the taxpayer up to £130 million, yet it deprives the most vulnerable people who have been on workfare and are looking to better themselves in employment. It has been introduced to deny £130 million compensation to 300,000 people who would like decent employment with decent wages, terms and conditions. The Government have introduced emergency legislation to prevent those people from getting only what the Court of Appeal says they deserve. That is an absolute outrage.

I am certain that the 300,000 people the Court says have a claim because of the illegal actions of the Minister’s Department should receive it—there is no doubt about it. The Bill is being introduced by the DWP and the Government to deprive many hard-working people, and many people who want to be hard-working, of any finance whatever. Is that in the best interests of the economy? It is an absolute disgrace. Those people will spend money in the economy. They might get £50, £100 or £72 a week, but they will spend it, because it is the only money they have. The Minister should not seek to deprive those people and leave them with no finances whatever.

The Bill turns my stomach. The impact assessment states: “A retrospective transfer of public money to this group of claimants would represent poor value to the taxpayer”.

What a disgrace to say such a thing in Government documents with reference to the people I have mentioned 10, 15 or 20 times previously. That will not give them self-esteem. They are doing their very best.

Members of Parliament discuss with constituents, and often people away from the constituency, the merits and otherwise of policies. I often meet people with a very different view from the people the hon. Gentleman has met. That is not to say that that has not been said, but the people I meet want decent jobs. They want the opportunity to get up in the morning and  go to work for a decent wage. They would accept the minimum wage even though, at this point in time, it is not high enough. Where I live, 25 people are after every single job in the jobcentre. That means that 24 are not getting employment for every single opportunity. People want to work for the best intentions and the right reasons. They want self-esteem and finances. People where I live want to work—I am sure that extends throughout the country.

Saying that paying claimants the money that the Court says they should be paid—the result of the ruling means that the £130 million can be paid—does not represent good value for the taxpayer is an absolute disgrace. It is not the type of language we would expect from any Government. It is not right to talk about people as, “This group of claimants.” They are ordinary people with feelings, and many of them want to get on in life.

The impact assessment states: “If the Department cannot make these retrospective changes, then further reductions in benefits might be required in order to find the money to repay the sanctions.”

That is blackmail of the highest order—I make no apology for the strength of my feeling on that. If people are due finances, they should get them, particularly following a court ruling, but the Government are saying, “If we pay these people, we might have to cut benefits for other people as a result because that is where we have to find the money.” That is emotional blackmail. It is totally and utterly bang out of order. They are trying to set people who are looking for work and on benefits against each other. That is absolutely unacceptable.

Some 300,000 people will be denied their legal rights if the Bill is passed. This is just another ideological attack on the unemployed and the less well-off, despite a High Court judgment. Why does the Minister not just accept the court of law? Give these people what they are entitled to. It is the Minister’s mess. Why should they suffer?

Grahame Morris

Members on both sides of the House by saying that, if the funds are not recovered from those who were incorrectly sanctioned, they will have to be recovered from elsewhere in the welfare budget. That is outrageous blackmail; I am sorry if that is not parliamentary language, but I find that deeply offensive. It goes against every grain of fairness in Members on both sides of the House. The view I am expressing is the view that has been unanimously expressed to me. I have received numerous e-mails and messages from my constituents over the past 48 hours, all of them asking me to vote against this Bill as it is unfair and unjust.

The Government, and especially Government Back Benchers, have characterised jobseekers who have been sanctioned as workshy and feckless—the sentiment expressed was “Are you really suggesting these people shouldn’t be sanctioned?” Let us have a look at the Work programme, however. It has gone from chaos to farce. We talk about “workshy”, but what about wage-shy employers who exploit the unemployed, with the connivance, approval and funding of the Government?

I oppose the concept of two nations, as does my party, but what will the consequences of these measures be? The Government are creating two nations. They are seeking to penalise and punish the poor for the mistakes of the rich and powerful, in part of a continuing series of policies that are badged as “austerity”. Those policies are pushing the poorest in society further into poverty.

We need to look at the situation we are in now. This is the wrong thing to do: it is unjust and unfair to give millionaires a £2,000 a week tax cut, at the same time as the right hon. Gentleman’s Government propose to deprive some of the poorest people, who have been illegally sanctioned, of large chunks of their income. It is outrageous, and it is rank hypocrisy for anyone to talk about rights with the emphasis on responsibility when it comes to workfare. If they are willing to undermine the judiciary and the rule of law, and vote for retrospective legislation to cover up the mistakes and failings of the Minister, who is asking that we legislate to place him above the law, that is a dangerous precedent to establish.

I cannot, in all conscience, support this desperate Bill, put forward by a desperate Government who have broken their own laws and now wish to forgo their legal obligations and withhold social security payments of £130 million to some of the poorest people in the country. Why do we not apply that method across the board? If the national emergency is such that it is right to deny access to social security to those who are entitled to it in order to safeguard the national economy, why do we not chase the tax exiles—those powerful individuals who own newspapers and luxury hotels, who pay no corporation tax and who have laid siege to a small Channel Island?

We are in the sorry situation of the Minister blackmailing hon. Members by threatening a collective punishment for all those in receipt of social security and welfare benefits if these changes do not go through, because the Department might have to find the money through further reductions elsewhere in its budget. I thought that it was the Secretary of State for Education and his advisers who were the bullies. It is now obvious that the Department for Work and Pensions has decided to sink to those standards by threatening Members of the House in this way, which is below what we would expect of a responsible Government and a responsible Minister.

 I did not come into Parliament to penalise and punish the vulnerable and the poor for the mistakes of the Government. The Department for Work and Pensions seems to be in a state of chaos. It is trying to save money by issuing unlawful sanctions for a Work programme that is not fit for purpose. It is making arbitrary cuts to disability living allowance and employment and support allowance, and is seeking to reduce the case load by 20%. Through the bedroom tax, it is cutting the incomes of disabled people and families with children. The welfare state under this coalition Government in 2013 is failing at every turn.

What we are seeing today is an abuse of power. This is an appalling Bill. I urge the Minister to take responsibility for his actions, even at this late stage, to put a stop to the Bill and to pay those who were unlawfully sanctioned because of his failings. I will vote against the Bill and I urge other hon. Members to do the same.

Iain Duncan Smith

I am listening carefully to what my right hon. Friend has to say. As the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Fareham (Mr Hoban), has made clear and my hon. Friend the Under-Secretary of State will make clear, all of these things are kept constantly under review. We want to improve them and that is what jobcentre staff do. They are brilliant at that, by the way, and they get better and better. My point on mandatory work activity is that it is not just work experience. It is also about changing culture: finding out whether someone is working and not declaring it; and getting people used to the idea of getting out of bed in the morning and attending somewhere where they do what they have been asked to do, because they have so got out of the habit of doing that, that even attending an interview has become a problem for them. This is not just about training; it is about getting people culturally back in line so that they can then be dealt with by advisers.

Universal Credit – computer says no?

There has been some uncertainty surrounding the development of the IT system to support Universal Credit last week and over the weekend. The Guardian reported that the system was ‘in meltdown’ and Computer Weekly reported that Stephen Timm, Labour MP for East Ham was adamant that ‘IT contractors have been told to stop work’ on the project, although this has been denied, in part, by Mark Hoban, Minister for Work and Pensions.

Another blog suggested that Hilary Reynolds had been replaced as ‘Universal Credit Programme Director’ after only 3 months in the job and following her revelation ‘that the technology for Universal Credit will not be ready in April, and that the roll-out from October will be much slower than previously expected’. Her letter to local authority chief executives from 3 December 2012 can be found here and a recent Guardian article suggested that local authorities should ‘prepare for the unexpected’.

All of this should be suprising given that DWP spokespeople and David Cameron have both suggested in recent times that ‘Universal Credit is on time and on budget’ in recent months. Perhaps this is the biggest welfare myth of our time….

***Update 13/03/2013 – Paul Spicker posted another interesting piece of news about the Universal Credit pilot on his blog and identified an interesting solution that the government may have come up with***

Shocking – but not surprising

Today, the End Child Poverty campaign published their Child Poverty map of the UK and it contained some fairly depressing reading for people across the country, but especially here in the North East. The region was identified as the one place where the ‘situation has deteriorated. We have four local authority areas (Newcastle, Middlesbrough, Hartlepool & South Tyneside) all in the top 20 local authorities nationally and all showing an increase from last years figures, the ONLY areas (with the exception of Strabane) in the top 20 to do so.

There was, predictably, lots of reaction to this and the issue received a lot of press coverage in local newspapers, (one- The Journal – stated that the North East ‘needed help’ after the publication of the figures) on local radio and on local and regional television, with many people asking why the region was faring so badly. On the same day, employment figures released suggested that the numbers of jobs created in the region was cause for celebration – and it is, in part. I can’t do better than this excellent blog by Alex Snowdon in The Guardian last week about why the North East is still struggling – we have been hit particularly hard by the recession and by local authority cuts and our recovery has been slower than some other regions.

The End Child Poverty report suggested that ‘there are three key areas in which Local Authorities should take action on child poverty:

1) Protect families with children in decisisons about local benefits

2) Ensure that in England they are meeting their duties under the Child Poverty Act to publish a child poverty strategy

3) Ensure that child poverty is a priority for health and wellbeing boards in England

I’m not entirely sure how much difference the ‘publishing’ of a strategy can or will make, although I do understand that it is important for the issue of child poverty to be taken seriously by local authorities. We highlighted in a report exploring the approaches of the 12 local authorities in the region that the establishment of Health & Wellbeing Boards was an excellent opportunity to prioritise the health of children and young people. In October of last year, at the launch event of the report, we highlighted three similar ‘small steps’ that local authorities could do to improve their efforts to tackle child poverty. These were:

1). Use – and add to – the evidence base

2) Examine institutional behaviour – ‘do no harm’

3) Give people living in poverty a voice.

So, where do we go from here? If poverty is the result of political and economic decissions (and I, along with the North East Child Poverty Commission, believe it is) then it can be tackled using political and economic decisions. So, employers in the region can pay a Living Wage. And politicians in the region can – and should – do absolutely everything they can to reverse the impact of decisions that are currently being taken in Westminster. And in many cases they are trying to do this. Members of the public – as well as public institutions and media companies – can also ensure that they do add to the stigma or marginalisation of people living in poverty by resorting to cheap stereotypes. But we can always do more, as today’s report shows.

Regular readers will know that I like a good quote to end with, generally because other people are more articulate and eloquent than I am so, with politicians (local, regional and national) in mind, here are three which seem quite appropriate tonight:

“The real challenge is to look at, and change as necessary, the whole of local authority activity, in direct relation to the needs of the community it is there to serve. With a focus on the community – both the individual and collective needs – it is logical to respond in an integrated (corporate) way … rather than responding in a piecemeal way.” (Local Government Anti Poverty Unit)

“Today’s politicians insistence on massive and rapid reductions in public spending will not be able to claim ignorance about the likely impact of their decisisons…. No scientific or technological breakthroughs are needed to deal with any of the deprivations or domains of poverty … What is lacking (as it has always been) is the necessary political will to prioritise children’s needs and to choose to spend the resources required” (pp 569-570 Minujin, A. & Nandy, S. 2012, Global Child Poverty & Well-being, Bristol: Poverty Press)

“Any political program that fails to take full advantage of the possibilities for action (minimal though they may be) … can be considered guilty of nonassistance to a person in danger” (p629 Bourdieu, P. et al, 1999, The Weight of the World: Social Suffering in Contemporary Society, Cambridge: Polity)

Best wishes,

Steve

Intergenerational cultures of worklessness

A JRF report exploring the idea of ‘cultures of worklessness’ and whether they are passed down the generations was published today and it has already received a lot of press coverage and comment. The report was produced by researchers from Teesside and Glasgow Universities and involved fieldwork in some of the most deprived areas of Middlesbrough and Glasgow. The research, which found no evidence of ‘3 generations of worklessness’ within the same family, suggests that:

Policy-makers and politicians need to abandon theories – and resulting policies – that see worklessness as primarily the outcome of a culture of worklessness, held in families and passed down the generations

I won’t say too much more about the content of the report because it makes sense to encourage people to read it themselves.

I do, however, want to highlight two things which I think are important about the report: the strength of the arguement within in and the importance of it.

The researchers are clear that they made every effort to find families that exhibited a ‘culture of worklessness’ and were very conscious that people would claim that they had not looked hard enough. Indeed, some of the comments on newsapaper websites that have covered the report would suggest that JRF might have been better off asking members of the public to identify such families. Drawing on work by Declan Gaffney (who has published a very interesting blog on the ‘invention of worklessness’ ), the report highlights ONS stats which suggest that approximately only 0.5% of workless households ‘could be described as having members across generations who have never worked’, as can be  seen from the infographic below.

In terms of the field work, no interviewees were able to direct the researchers to families that fitted the criteria for 3 generations of worklessnesss and, despite talking to and meeting over 30 practitioners working in the local areas:

none was able to direct us to potential recruits for the study … when pushed to identify families where ‘three generations had never worked’ these practitioners were unable to do so, despite their apparent belief in the existence of such families and their close engagement with local communities.

The approach of the researchers has not yet been challenged and organisations such as the Centre for Social Justice and Policy Exchange who have talked previously about deviant cultures have yet to respond to the report, to the best of my knowledge.

The second point I would like to make about the research is how important it is at the present time. The report contains quotes about worklessness from figures such as Chris Grayling, Gordon Brown and Dame Carol Black, and Iain Duncan Smith frequently uses examples of such behaviour in his speeches:

“And those who have no interest in work … because they have seen their parents, their neighbours and their entire community sit on benefits for life … have simply had their destructive lifestyle confirmed..”

and

“This entrenched culture of  worklessness and dependency is not only the source of soaring welfare bills”

Even the DWP Social Justice Strategy has a section on ‘challenging the culture of worklessness’ . The idea of cultures of worklessness has also permeated down to local authorities and their partners and here are a few examples that I have come across in the North East:

Research carried out in 2010 … revealed low aspiration levels in some areas of the borough, in many cases as a result of second and third generation family unemployment.

The cultures embedded in second or third generation workless households, including benefit dependency, need to be changed

… highlighted a number of areas of concern, including … the problems of cultures of low aspiration and worklessness in some of our communities,

We will work towards enabling people to break the cycle of benefit dependency; encouraging a culture of work in every household

It will be interesting to see what the response of politicians, policy makers and practitioners is to this report. Let’s keep our eyes and ears peeled for the next mention of 2, 3, 4 or even 5 (yes I have heard it) generations of unemployed. Of course, the best way of proving the existence of intergenerational cultures of worklessness is to find families that fit the bill. And yet, nobody has found any such families – and certainly not in large enough numbers to suggest it is a cultural phenomenon.

N.B. In the interests of full disclosure, two of the authors of the report are colleagues of mine. Professor Tracy Shildrick is a member of the North East Child Poverty Commission and Professor Rob Macdonald is a member of the Institute for Local Governance Management Committee, where I am based.

Steve

A flourishing and happy society?

I have been really impressed by the coverage that Living Wage Week has received and by some of the commitments and comments that have been made by some politicians. The Living Wage Foundation noted that at a No 10 lobby briefing on the 5th November, it was reported that a spokesman for the Prime Minister said ‘We back the idea of a Living Wage and we encourage businesses to take it up’ and Boris Johnson and the Miliband brothers, amongst others, have also spoken powerfully during the last seven days.

However, not everyone thinks it’s such a great idea. A piece in the Daily Mail called it ‘economic illiteracy’ and a very strange piece on the Spectator website claimed that a living wage was the ‘latest fad in this area of simplistic marketing slogans’ and ‘misses the point of poverty’. I wasn’t aware that poverty had a point, but I suppose, from a certain perspective, there are benefits to some people from others living in poverty.

Both articles were interesting in relation to how they framed the potential role of governments. The Spectator article, written by Ruth Porter from the IEA, suggested that the government should look at ways to reduce the cost of living in different areas of the UK and the Mail article suggested that the Minimum Wage was legislation enough and that:

The idea that somehow the minimum wage in  Britain falls short and needs to be replaced with something better is a piece of  nonsensical sophistry.
Aside from the totally false premise of its  name, which suggests the existing minimum wage does not provide a living income,  (the Living Wage) is a direct assault on the concept of free wage bargaining in a competitive  economy.

Interestingly, the Adam Smith Institute proposed raising the tax free allowance to provide a Living Wage for all, shifting the responsibility for increasing the take home pay of employees from the employer to the state, noting that the lowest paid often pay proportionately more tax than those wealthier than them.

There are, of course, lots of very good business and economic reasons why employers should pay a Living Wage, not least the reputational benefits they might enjoy but surely we shouldn’t aspire to be a society that knows the price of everything and the value of nothing, one that is guilty of ‘tearing up the flowers to get at the worms’ in the words of Robert Tressell. Adam Smith himself, considered by some as the founder of free market economics, put it very well in The Wealth of Nations, when he wrote:

“Servants, labourers and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconvenience to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, cloathed and lodged.”

The Wealth of Nations was published in 1776. Thirty years later, Robert Owen said that:

“What ideas individuals may attach to the term  “Millennium” I know not; but I know that society may be formed so as  to exist without crime, without poverty, with health greatly improved, with  little, if any misery, and with intelligence and happiness increased a hundredfold; and no obstacle whatsoever intervenes at this moment except  ignorance to prevent such a state of society from becoming universal.”

Now, nearly 200 years on from this comment, it could be argued that there hasn’t been much progress in some of the areas highlighted by Owen, at least for some people. When there are five million workers paid less than a Living Wage, millions more unemployed and yet more castigated as scroungers for being unable to work or unwilling to do because they prioritise caring for others, large inequalities in health and eduational attainment and poverty looking likely to increase, can we call ourselves a happy and flourishing society?

regards,

Steve

An idea whose time has come….

We, in the North East, are often accused of ‘lagging behind’ other regions in various ways, although I’m not entirely sure how many sleepless nights this causes in the region. One area where it would have been nice to have been leaders rather than followers, however, is in recognising the importance of paying employees a Living Wage. In case you’ve missed it, this week is Living Wage Week in the UK and the new rate of £7.45 per hour was announced by Julia Unwin, the Chief Exec of JRF, on Monday.

The Living Wage Foundation also released a list of accredited Living Wage employers which, unfortunately, did not contain any local or regionally based organisations. However, it is not all bad news (in fact there’s some very good news and reasons to be optimistic about the future pay for the lowest paid employees in the region. Here, then, are some reasons to be cheerful:

• Scotswood Natural Community Garden in the West End of Newcastle are an accredited Living Wage employer (we believe they are the first and only organisation based in the region – although they don’t appear on the list) and, as a small charity reliant on grant funding for most of their income, they deserve praise for taking the step towards being a Living Wage employer. They have chosen to become a Living Wage employer, I understand, because it fits with their aim of promoting sustainable living.
• Newcastle City Council have become the first public sector organisation in the region to commit to being a Living Wage employer, although they have decided not to pursue accreditation at this stage. They are also encouraging other employers in the city to also become Living age employers and one large property development company responsible for the regeneration of a large area of the city centre is exploring the financial implications of paying the Living Wage to staff in a new hotel that is planned.
• Durham University Labour Club have started campaigning on the issue of a Living Wage to get Durham University to become a Living Wage employer. They have written an excellent blog on the subject which highlights that one of a PVC for Durham wrote in a JRF report exploring how universities could help disadvantaged communities that they can ‘also set an example to other employers by promoting good practice, such as ensuring that all employees are paid at least the Living Wage’. They have also set up a petition which will be delivered to the University and I would encourage people to sign it.
• The Northern TUC (who have been quite busy recently with work around regional pay in the public sector) are continuing to work with a number of public sector organisations in the region to encourage them to become Living Wage employers. They are holding what is likely to be an excellent and packed event in Middlesbrough tomorrow (Friday 9th November) to discuss the reality of austerity and what poverty pay means for millions of workers across the UK.
• This post is part of a Blog Action Day, organised in conjunction with VONNE, the umbrella body for the voluntary sector in the North East. Jo Curry, their Chief Exec, recently spoke in favour of the Living Wage at an event where the role of the institutional behaviour of organisations in producing and reproducing poverty was discussed. Carrie Brookes has written an excellent blog summarising some of the issues facing voluntary sector staff here and the issue was also discussed at the Newcastle CVS AGM earlier this week. Jeremy Cripps, the Chief Exec of Children North East is also due to publish a blog about the subject here. In other words, the voluntary sector in the region are now talking about the Living Wage and what it means for them….

So, it is rare that David Cameron and I are in agreement, but on this we are. He said that the Living Wage was ‘an idea whose time has come’ and it appears that us folk in the North East are beginning to think he may just be right.

Unfortunately, the Prime Minister has not felt it unnecessary to act in support of his statement since becoming Prime Minister. We, however, will extend an offer to any representatives from employers in the North East reading this blog. We, the North East Child Poverty Commission, will work with you to provide you with as much information and support as we can possibly can to demonstrate that paying a Living Wage can be a very good, sound business decision. I’m sure the Northern TUC and the Living Wage Foundation will make similar offers, if appropriate.

Kind regards,

Steve

An excellent summary of Living Wage week coverage can be found here and also using the hashtag #Livingwage on Twitter