If you think poverty started in 2010 you are part of the problem


This map from the Office for National Statistics shows that the UK is above mid league in terms of risk of poverty throughout Europe. If we leave the EU and the Single Market we will dream of these days as our standards will inevitably fall.

On Wednesday the Office for National Statistics produced a report on both absolute poverty and persistent poverty in the UK compared to the rest of Europe and beyond. It showed that whilst our Country is by no means the worst country in Europe on these indicators it is by no means the best! That made me think once again about poverty in our Country and the way that successive Governments have tried to deal with it.

In 1999 the then Labour Government published 18 reports which looked at all aspects of poverty and wordlessness and living conditions which had been prepared for them by 18 ‘Professional Action Teams’. Each of the PATs produced a series of recommendations but when the Government brought all those reports together it concluded that the vast majority of the Country’s social and personal economic problems were located within just 3,000 neighbourhoods throughout the UK.

It, quite rightly, never published a list of those neighbourhoods as that would have only made things worse in them. They did, however, begin a series of programmes largely through what were called Single Regeneration Budgets (SRB) areas where not only  were extra funds put in but all the spending of the Government both central and local were coordinated in a more effective and joined up way.

Of course it didn’t work too well. Joining up other people’s budgets was a great idea as long as I didn’t have to put mine in! Spending new money was a great idea, provided it was spent on my pet themes or my department/organisation. Vast numbers of ‘agencies’ grew up to help local voluntary organisations submit bids for funding. I earned a part of my living by helping councils and their partners to effectively involve local people in the decision making through the development of locally led SRB Boards.

The Government view on this was ambiguous even though the SRBs were their own creation. It allocated money nationally for neighbourhood initiatives and in the first year of operation told councils them money could be used instead to fend off big council tax increases. The major spending organisations such as Department of Health and Department of Education never allowed their budgets to be included. Of crucial importance was the fact that DWP allowed no local experimentation in the use of their funds and benefits to be used to meet local opportunities. Often in many of these 3,000 neighbourhoods benefits money was the biggest input into the area.

There was never an evaluation of the SRB and other programmes as a whole but there was an evaluation of many of the individual SRB programmes (there were similar programmes in Northern Ireland, Scotland and Wales). The ones that I helped evaluate showed few changes in the indices of poverty despite some excellent work done within those areas for up to 7 years. There was a simple reason for that. Many people had received really good training which had enabled them to both get on and then move up the employment ladder. When they did that they used their relative new affluence to escape from that area. Who came to fill the housing? Even more poor people who were right at the top of the difficulty league.

I came to two conclusions from this:

  1. That the problems of these 3,000 neighbourhoods had taken decades to build up and were not going to be put right in 7 years. If we look at Liverpool 8 for example we can see that up to the early 1930s Toxteth was one of the wealthiest areas of the City. The big houses were lived in by the ship, insurance and banking company owners and then when mobility got easier with the widespread use of cars and the opening of the first Mersey Tunnel the right moved out and the poor moved in. Look at Rhyl or almost all Victorian Holiday Towns. When the B & B trade left for Majorca and Benidorm guest house owners were left with lots of small units and no market. Who came in to fill them? The poor as these areas became bed sit, social security land.


  1. That micro activity alone was not enough. It needed concerted changes in national policy and spending programmes to change things. Labour and Messrs Brown, Mandelson and Blair thought that by letting the City and Banks run riot there would be the creation of enough tax to sort out the problems of poverty. They refused to allow the spending of money according to local priorities. All the money had to be spent on a complex series of targets dictated by some boy or girl in Whitehall with a first class honours from Oxbridge but not a clue about how the World operated. In fact at one time unitary councils like Liverpool had to report to the Government on 1,100 key indicators some of them on a quarterly basis.

So my guess is that if we could go back to those 3,000 neighbourhoods today 100 will have moved out of the category and a 100 would have moved in to it. Good work done for many individuals but a stasis for the communities as a whole.

Interestingly between 2010 and 2015 there was a movement in which those in the bottom 25% of the population had more disposable wealth and those in the top 25% had less. In other words there was a modest but definite decrease in the gap between rich and poor. But this was not caused by local programmes or changes in the local economy but because the Government kept the top rate of income tax higher than all but 31 days of the 13 years of the [previous labour Government and gradually increased the level at which tax became payable. In other words the big change came from macro policies. Similarly the number of students from working class backgrounds increased between 2010 and 2015 not because the schools had got better (although they had) but because the grants became better so the risk of failure was reduced.

I have five main conclusions about the way to deal with poverty. There are many more and in a blog I can only headline what those solutions are but here goes:

  1. We need to create well-paying and sustainable jobs in our Country. That is why it is so vital that we stay in the EU. If we leave the EU and the Single market our chances of avoiding an austerity which makes today’s look like a teddy bear’s picnic are none-existent. That is why Corbyn and the Labour are so wrong to vote the way that they are in Parliament. Waving a banner and demanding higher corporation tax is not the way forward. All but 54 Labour MPs voted for a huge austerity programme when they entered their coalition with Theresa May over Europe in the Queens Speech.


  1. We need to break the power of the gig economy and similar activities which have created low-paid and low skill jobs not because there is necessarily a long-term benefit to the Country by creating them but a short-term profit to companies who massively reduce their tax bills. The problems of today’s low value and cheap economy will haunt this Country for generations to come as the current young people become old without the opportunity to build up capital reserves in pensions or housing.


  1. We need to have local decision making about national budgets. Too often councils and other parts of the public sector are spending money not according to local need on locally designed programmes but on national targets applied locally with tight controls about what and how they spend. Councils should have much more control of the spending of public sector resources in their areas.


  1. We need to break the Power of Westminster and Whitehall and send real decision making down, if not to the regional assemblies that I would like to see, to the City and County Region Mayors. In a conurbation like Liverpool City Region we could have a great system of working together on what we know to be the priorities with enough money and opportunity to make things fly.


  1. Power needs to flow not only from Whitehall to the Town Hall but from the Town Hall to the Communities. Just as Whitehall likes to keep a tight hold on cash so does the Town Hall in far too many cases. Everyone cites the economies produced by large scale activities but ignore the economies that can be created by small-scale and well informed activity.


Above all we need to recognise that just as in Toxteth the problems of the Country have been a long time in building up. We cannot however just treat the poor people in poor neighbourhoods as collateral damage whilst we build a new utopia for them over the next 30 years. They need enough money to now to live in dignity.

The aim of our society must surely be that all its citizens live in a decent home that is appropriate to their needs set in a good neighbourhood that is clean, safe and well managed. Is it too much to hope that in a country which is 25th in the world on a GDP per head basis we can everyone a decent and fulfilling job which pays enough for them to live without benefits and enables them to have a couple of weeks holiday with the family every year.

I am setting modest targets here. But the means of achieving them are long term and complex. As the old saying goes, “The longest journey is begun with the first step” but before we set off we need to have a map which gives a destination which is not Utopia but perhaps a decent country to live in for all of us.

About richardkemp

Leader of the Liberal Democrats in Liverpool. Deputy Chair and Lib Dem Spokesperson on the LGA Community Wellbeing Board. Married to the lovely Cllr Erica Kemp CBE with three children and four grandchildren.
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