Don't Look Back: Tackle the Causes Not the Symptoms of Poverty

Article excerpt

Peter Townsend's work, describing the conditions of poverty in Britain today, has been path-breaking and invaluable. But he is wrong when he argues that modernisation of the welfare state means abandoning the poor.

He asks whether Labour means business when it comes to tackling rising poverty and inequality in Britain. My answer is an emphatic Yes. If we do not, then we will condemn ourselves to more decades of growing social injustice and economic failure. And we will fail to honour our central commitment to social justice, a fair society and employment and educational opportunity for all.

But the war on poverty cannot be fought on the old terrain. That Peter Townsend's article does not even mention the word "skill" and barely consider education is a striking indication of his failure to come to terms with the real causes of poverty in Britain today. Labour does. Modernisation is the only way that we can attack poverty and help the poor. Our solutions to poverty and rising inequality are grounded on a proper analysis of the new causes of poverty - low skills, unemployment and low wages in work and their impact on the ability to save for retirement.

The last two decades have seen dramatic changes in the labour market. Slow growth has stunted job creation. Unskilled workers today command increasingly low wages. Our welfare state, without the support of a minimum wage, too often traps people out of work. And our education system fails far too many of our young people who leave school at 16 without skills or prospects.

When Peter Lilley argues that poverty in Britain does not exist, he is ignoring the reality of Britain's increasingly divided labour market and the failure of his government to deliver genuine equality of opportunity. The most dramatic indication of the problem is that one in five working-age households has no one with a job, up from one in 12 in 1979, while 60 per cent of the long-term unemployed have no qualifications, compared to 17 per cent for the whole workforce. Wages are now more unequal than at any time since the 19th century; with many poorly skilled people stuck in a vicious cycle of low pay and spells of unemployment, as his own Department's survey of National Insurance records reveals.

The result is that working-age families now make up 74 per cent of poor households, up from 63 per cent in 1979, and the number of children living in poverty has risen from one in 10 to one in three.

The absence of workplace opportunities and workplace earnings is the main reason why there is insufficient provision for sickness, disability, unemployment or retirement. …