WELFARE STATE

Poverty

The half-time score

Frank Field

The half-time whistle has been blown on the life of this Parliament, so now is an appropriate time to take stock of the Government's success and failure in its attempt to abolish poverty.

Whatever the record says about the massive balance of payments surplus, and all the other goodies the Government inherited, the balance sheet of poverty tells a very different story.

First, there is the large number of working men with children who, although at work, earn less than the state poverty line. At the end of 1966 the Circumstances of Families report put the number of men in this bracket at 160,000, and between them they cared for half a million children. Family allowances were increased twice in 1968 and, as a result, the number of working families in poverty fell. Patrick Gordon Walker, who, believe it or not, was the Social Services overlord at the time, stated that the total number of working poor had been cut by half. By 1970, Sir Keith Joseph put the number of family men in work who would qualify for the new Family Income Supplement at about 190,000. As FIS was originally a far from generous benefit — it brought few of the men's income up to the supplementary benefit level — the 1966 and 1970 figures are comparable and, if anything, FIS data underestimate the extent of poverty. So it is fair to say that the numbers of working poor were on the increase when the Government assumed office in June 1970. But that is only part of the inheritance.

Not only were the numbers of poor increasing, but the gap was widening between people enjoying average living standards and those on the poverty line. Or at least that was the case CPAG put forward before the last election and one which was endorsed, perhaps not surprisingly, by the then Conservative Opposition. For example, CPAG showed that the value of a married couple's old age pension was 34.2 per cent of adult male average earnings for that year. By 1970 this had fallen to 28.9 per cent.

The same trend is apparent if we examine what happened to the living standards of poor families. A married couple with two children in 1967 drew a supplementary benefit valued at 45.8 per cent of adult male average earnings. By 1970, this had fallen to 38.9 per cent.

It was against this background that the Conservatives made their promise to abolish poverty within the lifetime of a Parliament. They were going to achieve this by concentrating resources on those in greatest need. In other words, by a programme of selectivity.

Part of this programme has been a tremendous success, and part has been an abysmal failure. The last two and a half years have important lessons, therefore, for anyone interested in designing an effective antipoverty programme.

First, though, let us look at the successes. Sir Keith Joseph has introduced two group selective measures. In other words, benefit has been made available to people if they come within a certain category of need. Pensions 'have been paid to the over-eighties — irrespective of their income — and an attend ance allowance is available for the very severely disabled — again, irrespective of their financial situation.

When introducing both measures the Government put forward estimates of the numbers eligible for help.

150,000 old people would qualify for a pension, and 50,000 would gain an attendance allowance. Both targets have been exceeded. Before the first overeighties pension had been paid, 156,000 awards were successfully registered. But this not unimportant success falls into insignificance when compared with the take-up of the attendance allowance. As Henry Hodge reported a few weeks ago in The Spectator, the benefit has not been without some rather big teething problems, but already 82,000 disabled people are drawing what will be eventually developed into an income for all disabled people.

Now to the less successful side of the record. Selective benefits have also been made available on a test of income. The Family Income Supplement has been introduced, and an impressively comprehensive campaign conducted to inform low income groups of their right to free milk, dental and optical care and free medicines. On two counts this campaign must be described as little short of a disaster — both for the poor, who desperately need help, and for the Government's high hopes of making selectivity work.

After the Government spending £600,000 advertising FIS, the numbers claiming are barely half those eligible. When introducing the scheme, Sir Keith said that the Government would only start to consider the sscheme had been a success when an 85 per cent take-up had been achieved. Likewise with the numbers of poor people claiming exemption from NHS charges. There has been an increase in the numbers receiving means-tested help, but nowhere near the 80 per cent target Sir Keith set for this particular campaign.

This failure has been reflected in the latest report on the incidence of taxation and social benefits. If the Government's programme of concentrating resources on the poorest is working, ipso facto, the data will show a closing of the gap between the living standards of the poor and the rest of the community. The figures, however, show the opposite.

The report divides the population into twelve groups. For example, there are households consisting of a single pensioner, of two pensioners, single people below retirement age, couples without children and with varying numbers of children. The report looks at what has been happening to the incomes of the lowest 10 per cent in each of these twelve groups after taxes have been deducted and the addition of social benefits are taken into account. The findings are that eight of the twelve poorest groups have lost ground, while the remaining four have failed to improve their position. The report is a study of 1971 which, as readers will know, was the first complete year of means tested selectivity.

To its credit, the Government is preparing itself for someone to call attention to the failure of its means tested selectivity campaign. In the Green Paper on Proposals for a Tax Credit System, the Government talks of its wish to decrease the scope of means tested benefits. Ways in which this goal can be achieved will be outlined in a future article.