Government attempts at reducing poverty in the UK

The conservative party traditionally considers the poor as a natural aspect of the economy. They believe high benefits are a disincentive to hard work for the poor that develop a culture of dependency on the state and the rich who are taxed highly on their incomes. The labour party however believe there are too many people stuck in the poverty trap. They therefore oppose particularly low wages and are willing to intervene in order to prevent them. Additionally, unlike the conservative party, new labour think benefits can be used as a carrot and not a stick in order to incentivise work.

The somewhat ‘pro-poverty’ ideological stance of the conservative party under Thatcher meant that they wanted a social security system that was a mere very low safety. They therefore reformed the system in order to make benefits much harder to obtain -having a very little, if not non-existent effect on the reduction of poverty within the UK. New Labour however, when they came to power in 1997 pledged to challenge child and pensioner poverty through a number of policies.

A substantial step in the direction of reduced poverty was in the form of the minimum wage which was introduced in 1997. This enabled the government to ensure a minimum standard of living for all preventing families/individuals from falling below the absolute poverty line. However this minimum wage caters for only what is required in order to afford the bare essentials of clothing, food, shelter and water and does not ensure against the relative poverty of individuals/families.

The introduction of better targeted benefits to those who need it most, otherwise known as ‘selective universality’ is another policy new labour introduced in an attempt to tackle poverty. This was done through the use of New Deal schemes aimed at the disabled, jobseekers and lone parents. The scheme offered those who signed on and were actively taking part in looking for employment, increased benefits and assisted childcare in the form of financial grants to subsidise child-minding to make going back to work more feasible for lone parents. Any welfare recipients who are found to not be actively seeking work or paying regular visits to the job centre will have their extra benefits taken away and receive only the minimum level of benefits. The programme appears successful in the reduction of poverty in the UK in that between the years 1999-2008 a reported 1.8 million jobs were found, 500,000 of these being lone parents going back to work and 150,000 being disabled people that have found work. This substantial increase in employment in the UK would result in a decrease of absolute poverty being that many people are now in work where they are earning at least a minimum wage which ensures adequate living standards. On the other hand however this programme, and therefore the government was not entirely successful in the reduction of poverty as many of the jobs created and therefore found were back room jobs that tended to be low paid, part-time and temporary with very little opportunity for progress via promotions or the gaining of skills that can later assist in finding more work resulting in a continued poverty in relative terms in that the wages did not and would not compare to the average of the country.

Another policy employed by the labour party in order to control the level of poverty in the UK was the adoption of a tax credits system for families with children, working families, and pensioners. The system worked on the basic principle of incentivising people to take on any work available, even if it’s low-paid, and in return they will have their incomes effectively subsidised or ‘topped up’ by the government so that the overall wage is higher and far more tolerable. This incentive to find work has had a positive effect on the government’s attempt to reduce poverty in both absolute and relative terms in that the finding of jobs of at least a minimum wage ensures an adequate living standard that is above the poverty level. In addition the top up payments on wages allows workers to receive a higher wage enabling there to be a lower level of relative poverty as there are no workers earning significantly low wages.

The governments have come quite some way in the reducing of poverty in the UK. However it depends on the means used to measure poverty, either in absolute or relative terms, just how wide their success is. When considering poverty in absolute terms the government’s policies have been very effective in that all working UK residents will receive at least a minimum wage and any out of work will receive benefits that will guarantee a minimum and adequate standard of living that is above the absolute poverty line. In relative terms however this is harder to tell because although UK residents may be in work or on benefits that enable a sufficient living standard the income of these can be much lower than the average of the country resulting in figures that represent a large proportion of the population remaining below the relative poverty line. The government, therefore in this aspect have failed in the reduction of poverty. However it is un-feasible for governments to completely eradicate relative poverty without imposing far higher taxes in order to more largely redistribute wealth which is heavily opposed by the conservatives and many large pressure groups such as CBI. Overall it is fair to say the governments have not failed in the reduction of poverty but there may be some more work to do making earnings fairer.

Amber Tomlinson


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