Poverty in the UK – financial or relational problem?

By Guy Brandon, 21 May 2015

Figures from the Office of National Statistics suggest that almost a third of the UK’s population fell below the official poverty line at some point between 2010 and 2013.

Injured Piggy Bank WIth Crutches19.3 million people were classed as living in poverty during this period. ‘The figure was higher than the 25% average across the EU as a whole, the ONS found. But Britons seemed to find it easier to escape from poverty than their continental counterparts, with just 7.8% – 4.6 million people – stuck in “persistent income poverty” in 2013, less than half the 15.9% EU average.’

What is poverty?

There are different ways of measuring poverty, but the simplest – and the method used in this instance – is defined as living in a household with disposable income below 60% of the national average. Specifically, the threshold is household income below 60 percent of median income, adjusted for the type of household and considered after income tax and national insurance, council tax, rent/mortgage and water charges have been paid.

This is a measure of relative poverty – that is, poverty determined according to other people’s income. It is a result of inequality, since if everybody fell within a narrower band of earnings, no one would be below the 60% threshold. Conversely, with a wider spread of incomes, more people would fall below the 60% mark.

Relative poverty is a fairly crude measure of need, though it is effective up to a point. There are genuine problems with poverty in the UK, as the growing use of food banks highlights. Over 1 million people were given 3 days’ emergency food and support in 2014-15. However, it misses a wider picture of poverty, and risks addressing symptoms instead of causes (one of the criticisms of government policy on welfare payments has been that it seeks to lift people just over the 60% threshold, without really removing them from poverty).

Relational poverty

We understand poverty as chiefly a financial condition: the state of not having enough money. Whilst this is one aspect of poverty, it does not capture its full significance.

The House of Commons Scottish Affairs Committee identified ‘three current definitions of poverty in common usage: absolute poverty, relative poverty and social exclusion. Absolute poverty is defined as the lack of sufficient resources with which to keep body and soul together… Social exclusion is a new term used by the EU and the Government, broadly related to relative poverty it includes the causes and effects of poverty. The Prime Minister described social exclusion as “A short hand label for what can happen when individuals or areas suffer from a combination of linked problems such as unemployment, poor skills, low incomes, poor housing, high crime environments, bad health and family breakdown”.’

This is closest to the biblical view of poverty. In the Bible, it is those who are most marginalised, who lack supportive family and community relationships, who are most at risk of poverty: ‘the alien, the orphan and the widow’ (e.g. Deuteronomy 10:18, Zechariah 7:10, Jeremiah 7:6, and elsewhere). These people had no ancestral land and no family, and so were dependent on the goodwill of others. In other words, poverty was understood to have relational causes: financial and relational poverty go hand-in-hand.

Biblical welfare

Addressing poverty was not just a matter of giving handouts – though the system of tithes served this purpose (Deuteronomy 26:12). Welfare was a community responsibility. Farmers were to leave the edges of their fields unharvested (Leviticus 19:9-10), and only to harvest grain and vineyards once, to leave the gleanings ‘for the poor and the alien’. Ruth gleans Boaz’s fields (Ruth 2), and Jesus and his disciples glean grain as they walk through the fields (Mark 2:23). Both work and welfare were made available to those in need.

More broadly, the Israelites’ economy was structured in such a way as to avoid long-term poverty wherever possible. Loans were cancelled every seventh year and the Israelites were forbidden to charge each other interest; debt was supposed to help people out of poverty, not push them deeper into it. Land could not be bought or sold permanently, but was returned to its original family every 50th year, so no one should lack the means of economic independence forever. Equality was baked into the financial system – not a bolt-on extra as it is with us.

For us, as much as we rail against it, inequality is essentially the price of doing business. Capitalism demands the lowest-paid employees and the highest shareholder returns. Migrant labour is cheap labour. Living wages are considered a luxury, not a responsibility. Consumerism makes us focus on the price of the product or service for us, not to the producer.

Highlighting relative poverty is a start. Ultimately, though, we need to look at the other side of the coin to find out where it came from.

Image: SeniorLiving.org

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Category: Blogs

May, 2015

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