This monograph is an impressive attempt to document the scale of mass poverty in contemporary Britain. It follows in the Fabian tradition of rigorous social research on poverty established in the late nineteenth century, painstakingly sifting through empirical data while setting out a practical programme underpinned by a coherent political analysis. The authors demonstrate the extent to which poverty has been rising in the UK as austerity and discretionary policy choices by governments have combined with structural forces to make low income households increasingly vulnerable to material deprivation. Moreover, current trends indicate that poverty is set to rise further in the years ahead especially among younger age groups who have arguably shouldered a disproportionate share of the burden of austerity and cuts since the 2008 crisis, as Breadline Britain ably underlines. The authors cite a range of data from the Institute for Fiscal Studies (IFS) which indicates that child poverty is likely to increase by a further 5 per cent up to 2020–21, while demonstrating that the poorest fifth of households in Britain do worse than in comparable countries such as France and Germany.
Stewart Lansley and Joanna Mack view poverty among people of working age in the UK as being driven by two distinctive causes. The first relates to the structure of the labour market, the distribution of paid work and the level of real wages: this has been labelled as the ‘predistributive’ dimension of poverty by the Yale Professor of Political Science, Jacob Hacker, and is concerned with primary pre-tax incomes. The second factor relates to the system of social security and the welfare state, more commonly associated with the traditional model of redistribution.
The authors are unequivocal that the New Labour Government's between 1997 and 2010 did not perform particularly impressively, despite the headline commitment to ending child poverty made by Tony Blair in 1999. In terms of the primary distribution of income, too little attention was paid to the underlying causes of poverty, namely the inadequate level of the minimum wage, the commitment to labour market flexibility, and the failure to develop a new political economy that was able to generate more productive, high quality, high wage jobs. On the redistribution side of the equation, the Labour governments relied too much on subsidising low wage employment through tax credits on which spending after 1997 grew to astronomical levels. This inevitably meant more means testing and targeting: as a result, the social security system became less universal and therefore lost much of its inclusivity. The inadequacy of Labour's approach in terms of failing to address the primary distribution of incomes and the restructuring of the social security system away from the universal principles of Beveridge has left an unsatisfactory legacy. Lansley and Mack develop a cogent critique of the Blair and Brown governments: they were too content to extract the surplus generated by a dysfunctional economic model predominantly built around financial services: the gains may initially have been redistributed to poorer households, but the approach became unsustainable in the aftermath of the financial crash resulting in a return to poverty levels last seen in the 1980s and 1990s.
So what is to be done? The authors put forward a comprehensive and sensible, albeit reasonably familiar programme of social reform: they want universalism restored in the welfare system given the comparative evidence which indicates that those countries with greater targeting and means-testing have more households at risk of poverty. They want additional social investment in key public services which help to reduce poverty levels, financed by clamping down on tax evasion alongside a more progressive system of income and wealth taxation. They want to raise the wages of the low paid through a major hike in the National Minimum Wage (a move anticipated by the Chancellor of the Exchequer in his July 2015 budget), and to strengthen the bargaining power of the low paid, presumably through increasing the rate of unionisation in the workplace. Importantly, the authors acknowledge the role of intervention on the supply side of the economy too, using industrial strategies to encourage the creation of more secure, high wage employment.
Most of this certainly appears politically feasible, particularly given that, as the book notes, there is a growing awareness that the scale of income and wealth inequality in the advanced market democracies has risen to unsustainable levels. This point has been made eloquently both by the Governor of the Bank of England, Mark Carney, and the International Monetary Fund Managing Director, Christine Lagarde. Nonetheless, social attitudes in Britain relating to the legitimacy of redistribution towards the poor hardly look propitious; in fact there is little sign of a new political consensus emerging. Voters express concern about the size of the gap between rich and poor, but are resistant to measures that might actually begin to close it. This relates to the Conservative government's strategy which appears to read the current public mood rather accurately: ministers are busily redefining the British welfare state and the social contract which underpins it away from an inclusive model emphasising investment in children and families, towards a targeted model which protects the universal benefits only of the elderly. This is, to say the least, highly unlikely to be conducive to further major reductions in poverty among children and people of working age: the period after 1997 may, in retrospect, come to feel like halcyon days.
