This article was written by John and originally published in The Telegraph.
Obsessing over equalising incomes is the wrong way to go about improving people’s lives
In the past 40 years Britain has pretty much defeated mass unemployment, and improved living standards beyond our parents’ and grandparents’ wildest dreams. Yet in spite of these victories, the problem of poverty remains unsolved. Poverty rates have hardly budged, in either the UK or other developed nations, even though this has been the core purpose of the welfare state for more than 70 years. Why, after spending trillions of pounds, isn’t it fixed?
The reason is that we’ve been doing it wrong. We’re stuck down a blind alley, built by the political Left, where poverty is defined as a question of how equal or unequal people’s pay might be. Labelling anyone who gets less than 60 per cent of median earnings as “in poverty” is a dead end because nobody – not even the Scandinavians – has ever eliminated poverty on that basis, or expects to either.
This leads to obviously silly conclusions: for example, if the 10 richest people in Britain died tomorrow and left their money to Battersea Dogs Home, poverty would fall even though no one’s standard of living would have changed. Equally, many of us choose less well-paid careers at different stages of our lives, either because they are more fulfilling or because of other commitments.
Worst of all, it gives rise, inevitably, to solutions that involve taxing you a bit more, and giving the proceeds to me through benefits, tax credits or subsidies.
This does not mean that low income doesn’t matter – it does, and a minimum level will always be essential – but it fuels fears that the political Left built the blind alley because it fits their beliefs about equality and wealth redistribution, rather than because it is the most effective way to solve the problem of poverty.
There is, thankfully, an alternative: to stop treating poverty’s symptoms, and to focus on curing the underlying causes.
That means turning “levelling up” into more than a public works programme of new roads, railways and hospitals. We need it to include big social reforms, too: we’ve got to break the glass ceilings that limit opportunities unfairly, so people can fulfil their potential.
Then we’ve got to equip everyone with the knowledge, skills and attitudes to understand and grasp those opportunities whenever they appear. And we’ve got to be ready to help people bounce back successfully after a serious life reversal, which can happen to any of us.
There are lots of examples of how to do this in my new policy paper, “Poverty Trapped”. Ideas like “building up not out” to cut ruinously expensive housing costs; a points-based honours system to reward the best and brightest based on merit; or more affordable childcare so single parents and working mums don’t have to put their careers on hold. Research shows that these reforms will be better at cutting poverty than the Left’s obsession with equalising incomes.
If we do them, we will create an equal-opportunity Britain where success is within everyone and anyone’s grasp, where our economy uses people’s talents to the full rather than wasting them. And which equips more of us to live independently, without needing to claim benefits or tax credits, with the happy knock-on effect of lower taxes for all.