Povety isn’t something you ‘fix’, it’s something you prevent

by | 21 Jul 2023

The two-child benefit cap is a sad reminder of everything which is wrong with political attitudes to poverty. Success isn't mitigating the worst impacts of poverty, its preventing poverty in the first place.

Dear goodness, doesn’t the whole debate about the two-child cap for benefits cast the UK in a terrible light. The problem is, does it cast anyone (except Richard Murphy…) in a good light? One more time I find myself caught between people virtue signalling that they are siding with the financial sector not the poor and people virtue signalling that they care about the poor without doing much about it.

I know I write a lot about how far down the policy agenda poverty is, how cynical the pretence that anything is being done, how easy our politics finds it to turn its eyes away from what poverty actually means when it comes to the hard decisions.

To that I want to add (again) that poverty isn’t about poverty policy. It’s not about something you do after poverty happens. Poverty is the symptom of political and economic failure. It is not a ‘reality’ we should ‘mitigate’ somehow while resolutely refusing to do anything about the cause.

And finally, it shows that our politics is still utterly ignorant, carried out on the basis of stupid, false analogies and silly, meaningless little homilies designed to distract you from the reality that we live in a society which is run by the rich for the rich and no-one who could change it wants change to happen.

Let’s start with the heart of the controversy, the cap on benefit payment to cover only the entitlement of the first two children in a family. First of all, this is a policy which has nothing to do with money or efficiency. It ‘saves’ £1 billion-odd, which isn’t particularly serious money. That is 0.3 per cent of the total social security budget.

It wasn’t about money, it was about messaging. The Tories were seeking the votes of people who like to see the poor punished. It is that simple. So if you support the cap you are a bad person. It is that simple. And Starmer just wants you to think he’s a hardman who is slayer of the left. It’s that simple. They’re all horrors.

But not supporting the cap doesn’t make you a good person, just a person. You don’t get prizes for opposing glaringly obvious, inhumane injustice. That is expected of you. You’re not meant to be a baddie. So to the politicians who have expressed their outrage – congratulations, you’ve succeeded in drawing attention to yourself achieving baseline decency.

If you were going to be an actual goodie you’d be saying ‘the second we right this awful, appalling wrong we need to get on to serious reform of the economy and to tackle the vested interests that effectively lobby to prolong poverty’. That I didn’t hear. So no-one is going to persuade me this is anything other than a pointless signalling-fest. You won’t persuade me that this is anything whatsoever to do with people in poverty.

It is local services that people in poverty rely on most – housing services, social work services, schooling services, community safety and so much more

Next we turn to the built-in fiscal conservatism of Britain. Here Richard Murphy has really done the work for me. That a UK politician can stand up in public after the bailout of the banks and after the bailout of (in particular) the middle classes during the pandemic and say ‘there is no money’ is clearly financially illiterate.

‘We don’t want to find any more money’ would at least be honest. I might even throw a bone to ‘we can’t create more money with inflation at this rate’. It isn’t true (poor people do not drive inflation), but it’s at least a coherent argument. But we don’t get that, we get bite-sized chunks of shit, like ‘the credit card is maxed out’ or ‘we can’t live beyond our means’.

(To be clear, most of the globe’s corporate sector and enormous parts of the ‘wealth management’ industry are now engaged in a long-term, rolling project of seeing how long they can go on living miles beyond their means. They do this by demanding that government policy artificially inflates the value of their assets. These are the assets on which they make their profit and these assets aren’t worth the value from which these profits derive. Like I say, a giant experiment in living beyond your means.)

Of course, in Westminster no-one is willing to explore ways to make action on poverty affordable. But neither is anyone in Holyrood. It’s use of tax powers so far have been another shallow exercise in virtue signalling – tax rates have been tweaked to create a story, not an outcome. They were literally designed to make rates for the wealthy as slightly higher as it is possible to make them while reducing the tax burden for ‘the majority’ by as little as possible.

In fact you can just picture the government bean counters trying to work out precisely what was the smallest change they could make to achieve no real change but support this story they had dreamed up in advance. What it didn’t even nearly do is raise income for public services.

Now at this point I need to pause and give real credit to the Scottish Child Payment. Here the Scottish Government really has put its money where its mouth usually is, spending (proportionately) five times as much as Starmer is refusing to spend removing the two-child cap. But this has to come with a big caveat.

That caveat is that this was introduced by a leader who knew she was leaving, and that someone else was going to have to deal with the financial consequences. Those are substantial, given the tightness of the financial settlement coming from London. And that is where I want to move on to my final point – if you look beyond the virtue signalling (valuable like the Scottish Child Payment or valueless like the tax tweaking) you get a totally different picture.

Is it unfair to call the Scottish Child Payment virtue signalling? Well, I don’t really think so – if the price being paid for it is even sharper cuts to the crucial social services people in poverty rely on. In particular, the Scottish Government has slashed funding to local government over the last decade.

But in reality it is local services that people in poverty rely on most. Housing services, social work services, schooling services, community safety and so much more are not delivered in areas of poverty by the central Scottish Government but by local authorities. But of course supporting this work from central government hands the credit to the local authority.

In the UK (and in Scotland, though a little less so), being against poverty is a pose you adopt, not a programme of action you follow

This is the fundamental problem. Everyone treats poverty as the thing you do after you’ve done all the other things and all those other things have created poverty. Let me give you one specific example; housing. When the Scottish Government creates housing policy it phones up Homes for Scotland (the lobby group of the big property developers) and asks them what they want.

What they want is always, always, always house price inflation. They make more money from expensive houses than cheap ones. So what we get is a never-ending stream of perks that inflate the value of housing. Government keeps building standards low so that profit margins are higher and the problems with these lower-quality houses is for the poor schmuck that buys them.

Government strategy is incredibly delicate about using planning or other powers to compel housebuilding to follow the public interest and instead lets them (it is a choice) ‘land bank’ which effectively cuts out market competition and rations the supply of housing at the same time.

And of course we’re always getting ‘help to buy’ schemes involving bungs to the middle classes. This is purely to sustain house prices that are extortionate and which the market would reduce if it wasn’t for government subsidy. The Scottish Government knows it is following a policy of inflating house prices.

Which means that more and more people suffer from housing poverty and those already in poverty see the ladder out of poverty raised ever higher above their heads. This traps them in poverty and makes them reliant on handouts like the Scottish Child Payment (if they have children). Which a rich country shouldn’t need to pay if it had been taking poverty reduction seriously for the preceding 20 years.

I don’t want to be too down on Holyrood; Scotland’s poverty is predominantly the result of successive government’s in Westminster (from Thatcher onwards) who financialised the economy and rolled back social protections (Blair too). It is Westminster to blame, not Holyrood.

But Holyrood could do so much more. Poverty isn’t about poverty, it’s about work, it’s about housing, it’s about criminal justice, it’s about local government, it’s about education, it’s about health, it’s about social work. Realistically, policies in none of these areas are driven by the issue of poverty but by vested interests.

So my despair returns. In the UK (and in Scotland, though a little less so), being against poverty is a pose you adopt, not a programme of action you follow. Everyone knows this (‘we have to grow the economy first’ they say, despite 50 years of economic growth that didn’t fix the problem).

We’re stuck with posing, ignorance and nastiness. Or rather we’re not, the poor are. The rest of us do quite nicely out of this. And then we tut tut at the inhumanity.

I know this is one of those articles that I keep writing over and over, but I get angrier every time and want to write it again. Who the fuck in Scotland is really willing to stand up for the poor with the ferocity and determination that shifting our politics would actually require? Show me that person and they’ve got my full backing.

But if you did a thumbs up to some Tweet about some politician saying ‘Tories are bad’ an you think you’ve done your bit, it isn’t you. So who is it? Who is serious about poverty in Scotland? Someone ought to be.

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