Relative inequality

The political debate about poverty is really nothing of the sort. It is about inequality and it has been raging since the Sixties, with the Left always in the ascendant. Their hijacking of the term poverty to mean “relative deprivation” has completely wrong-footed Conservatives, who are accused of a hard-hearted indifference to the poor.

Yet it is arguable that policies designed to redistribute incomes in order to bring about equality, or at least reduce inequality, have hampered economic growth and made the country a less prosperous place, to the detriment of all. This is a case the Conservatives rarely make any more, not least because there is such a powerful lobby determined to keep the issue of relative poverty – defined as a household on 60 per cent of median earnings – to the fore.

The Joseph Rowntree Foundation (JRF), which has been in the vanguard of this debate for four decades, yesterday published figures which purport to show that benefit cuts and stagnant wages are dragging nearly a million more people into penury. Yet more people are in work than ever, income inequality has fallen to the lowest point since the Eighties and absolute poverty rates have declined.

As the Centre for Social Justice pointed out in a rebuttal of the JRF, one way of ending relative poverty would be for everyone to be equally poor. Poverty is not just a measure of income but of other factors such as family breakdown, poor education, low skills and the lack of aspiration that living in dependency invariably causes.

It is time to dump this arbitrary measure of relative poverty. It may be useful as a political stick but fails to focus on outcomes that really matter.