Is it possible to cut public spending and reduce poverty at the same time? Instinctively, most people would answer No. Poverty is about money so if the Government cuts spending, especially on welfare, poverty must increase. In the current climate, with the Chancellor struggling to balance the nation’s books by engaging in yet another bout of Whitehall austerity, we should expect poverty to increase.
As someone who has spent the last five years working for Iain Duncan Smith in the Department of Work and Pensions, I can well understand the thinking that links hardship and spending levels. For decades, the Left has dominated the poverty debate, making an apparent orthodoxy of its position that all that matters is the largesse of the State and that compassion is measured only in terms of more money.
Yet, such thinking is wrong – and wrong on two counts.
First, it is not borne out by the facts. In the last five years, £50 billion of cumulative savings have been made to the welfare budget, but has poverty risen? Not at all. The number of children living in poverty – by the flawed measure devised by the last Labour government, is actually down by 300,000; the number of people in work has increased by over 1.8 million; the number of workless households has fallen to its lowest level since 1996 (when records began) and the number of people claiming unemployment benefit has fallen by nearly 700,000 since 2010. Each of the welfare reforms have played their part, including the Benefit Cap which limits the amount that can be paid. Capped households for example are 41% more likely to go into work than similar uncapped households and 74% of poor workless households who found work escaped poverty.
Second, it is conceptually wrong. Lack of money may well be the presenting symptom of poverty, but poverty is not caused by lack of money. The root causes of poverty have been clearly identified by the Centre for Social Justice, the think-tank where I worked before my five years in Whitehall, and where I am working again now. Family breakdown, long-term unemployment and welfare dependency, underperforming schools, addiction to drink or drugs, and severe personal debt are what the CSJ has identified as the five pathways to poverty. Almost two thirds (65%) of children aged 12–16 in low-income households do not live with both birth parents, 26% higher than the figure for better-off households
So, if we are serious about tackling poverty then this is the place to start. More money through welfare may be a sticking plaster, alleviating the immediate pain of poverty, but it is not the long term answer. That lies in painstaking efforts to strengthen relationships and restore troubled families; it lies in getting people off welfare and into work; it lies in transforming education in deprived areas and creating opportunity and aspiration; and it lies in tackling the scourge of addiction and debt.
But good ideas are not enough. We also need political will and a commitment to deliver lasting change. In David Cameron’s speech to the Conservative Party Conference last month, that commitment was put centre stage. Political speeches are soon forgotten as the tide of events rushes onwards. But the Prime Minister’s remarks in Manchester deserve repetition.
“If you want a lecture about poverty ask Labour but if you want something done about poverty – come to the Conservatives,” Mr Cameron declared, throwing down the gauntlet to his political opponents.
He also spelled out the defining mission of his first and only term of running a Conservative administration – to be remembered as a great social reformer. As he put it: “Conservative social justice means tackling “homes where no-one works, children growing up in chaos, addiction, mental health abuse and family breakdown”.
The headlines in the UK may be dominated by the appalling terrorist atrocity in Paris or George Osborne’s hand-to-hand combat with spending ministers over the Autumn Statement. But beyond the sound and the fury, lasting social change is quietly under way.
The Government has a Welfare Bill currently going through Parliament that changes Britain’s approach to tackling poverty. It starts with the understanding that if you are born into a family that cares for you, you are well educated, you have a job, you don’t pick up a drug habit and you don’t get into debt, you are very unlikely to be poor.
If one of those dynamics is reversed – say you lose your job then life begins to destabilise; if two are reversed – you lose your job and get into debt – then life starts getting tough; If three are reversed, you lose your job, get into debt and pick up a drug habit then you start to get stuck and so on. If all five are reversed then unless there is some significant intervention in your life you are quite likely to remain entrenched in poverty.
The UK government’s newly launched Life Chances agenda is about saying let’s actually tackle the reasons why someone is poor; let’s not just give endless hand-outs; let’s support people by removing the obstacles that confront families so that they can take responsibility for their own lives.
So far so good. The Government has the right programmes to make this a reality, in the Troubled Families programme, the Work Programme and Universal Credit, which simplifies the benefits system.
All three are already funded but now need to be refocused so that they address the causes of poverty the Prime Minister identified. If he does it, then real change is possible.
None of this requires extra money – it just requires the Prime Minister to impose his own political narrative and drive it through his own existing programmes. It is the biggest challenge to a Corbyn-led Labour Party, who can only see equality through the lens of greater and greater financial redistribution, resulting in higher taxes and higher welfare expenditure.
The next few years (Cameron’s last few as Prime Minister) will be filled with competing demands: a European referendum, security challenges, economic crises and waves of migrants.
David Cameron has laid out his agenda on welfare reform and social change. It need not cause conflict with his Chancellor’s but it will need all the determination and drive of a highly focused Prime Minister on a daily basis if it is to be achieved. Britain is longing for this Government to be about more than just cuts. It wants its leaders to have a strong social reform agenda. It can be achieved, but it needs to be more than rhetoric.
This article first appeared on the CapX website