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24 October 2018updated 09 Sep 2021 5:19pm

The rollback of the state has created levels of poverty last seen in the UK in the 1900s

 If past government action reduced poverty it could do so again.

By Pat Thane

At the start of the 19th Century, 30 per cent of British people were destitute, mostly because hard-working people were miserably paid. The shock when this became public led to the beginnings of the welfare state, real improvements in working and living conditions, and poverty gradually shrank. 

Those who thought we had left that world behind us are in for a shock. Cuts welfare and falling pay have resulted in at least 25 per cent of those in the UK living in poverty, mainly due to low pay at work. 

Surveying British history since 1900 for my new book Divided Kingdom. A History of Britain, 1900 to the Present my most shocking discovery was that the extent and causes of poverty were much the same now as in 1900.  Charles Booth’s massive survey of social conditions in London (published 1903) found that about 30 per cent of Londoners lived “in poverty or in want”. London was known to have a complex economy which attracted needy people and its conditions were considered perhaps exceptional. Then Seebohm Rowntree surveyed poverty in York (published 1902), which he reckoned was a typical English town, so might better indicate conditions across the country. He was horrified to discover that 27.84  per cent of York’s population were in “obvious want and squalor”. Other surveys in town and countryside before 1914 produced similar findings. And Booth and Rowntree found the greatest cause of poverty was not, as often believed, feckless shirking by the irresponsible lower classes, but low pay for full-time work or inability to get regular work despite best efforts.

This caused such shock and furore that it led to the first measures of what became the Welfare State, introduced by a progressive Liberal government supported by the nascent Labour Party: free school meals in 1906; old age pensions in 1908; National Health Insurance and Unemployment Insurance in 1911. Expanding state welfare and government measures to create secure, better-paid employment, reduced poverty and inequality especially post-1945, though it was never eliminated. The Second World War and after, then the 1960s and 70s, saw the greatest decline in poverty, driven mainly by Labour governments. Income and wealth inequality were at their narrowest in the late 1960s and 1970s. Contrary to popular denigration of the 1970s, this was when the range of state welfare benefits and services reached its peak and there was no evident shortage of affordable housing to rent or buy.

Poverty then shot up under the Thatcher governments of the 1980s- about 13 per cent of children in Great Britain were in poverty in 1979, 28 per cent in 1990. It declined halfway to the 1979 level under New Labour before rising again after 2010.

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The Joseph Rowntree Foundation found 20 per cent of the UK population in poverty in 2015-16, 60 per cent in households including an inadequately paid full-time worker. The Child Poverty Action Group estimates that 30 oper cent of children in the UK (4.1m) were in poverty in 2016-17, 67 per cent in households with at least one full-time worker. The IFS supports this, stressing regional variations: in 2016-17 24 per cent of children in Scotland were in poverty, 37 per cent in London, the difference driven above all by housing costs. As in 1900, there is much poverty in London, which is overlooked when Londoners are accused of being out of touch with realities of British life. The Resolution Foundation makes similar estimates, stressing high housing costs as causing poverty “perhaps more so than at any time in the past”. Since the massive sale of council houses under Thatcher, the supply of “affordable” housing has dwindled, and too many people live in damp, overcrowded, poorly maintained property reminiscent of the 1900s. New Labour did little to improve housing supply.

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Of course, comparing measurements of poverty over very different times is difficult. Contemporary researchers use a different measure in a country much wealthier country than it was in 1900. However, the concept of “relative poverty”, defined as having income below 60 per cent of national median income, has been widely adopted internationally in preference to measures of severe destitution. This is because the life chances of people living above the level of destitution but so far below the average standards of modern high-income societies are severely restricted. They have lower life expectancy, poorer health, lesser educational and work opportunities. Recent UK surveys also exclude the large and growing numbers of homeless people living rough on the streets or in hostels – tens of thousands certainly, though the exact figures are uncertain. This and the growing use of food banks – unheard of in Britain until recently – call into question how many people are living in absolute destitution comparable with the 1900s. In 2017/18 the Trussell Trust alone gave out 1.3m emergency food packages, while in May 2018 Fareshare fed 772,000 people with leftover supermarket food. The numbers helped by the many smaller community or church-based food banks are unknown.

The government boasts about rising employment but ignores the fact that it is often poorly paid. A serious cause of poverty, now as in 1900, is the growing numbers on low pay in insecure employment as employers evade the minimum wage and other obligations by imposing fake self-employment and insecure contracts. The IFS also emphasises the impact of the 10 per cent fall in the value of benefits and tax credits to working families since 2010. The substitution of Universal Credit for many benefits and the slowness and complexity of its roll-out that causes long delays in payment, is increasing poverty and is likely to do so further in future. The government argues that UC increases incentives to work, just as administrators of the 19th century Poor Law justified low, punitive benefits. Awareness that the Poor Law perpetuated poverty by driving people into low-paid work, damaging society and the economy, was among the early pressures for state welfare. State action brought sustained improvement. Since the 1980s, “rolling back” the state and welfare has returned us to a situation all too like the 1900s.

Shocking poverty, with children starving in school holidays, is constantly in the news. If past government action reduced poverty it could do so again, in a richer country, much more knowledgeable about the causes and effects of poverty, especially the long-term effects on children. 

Pat Thane is Professor of Contemporary British History at King’s College London and author of Divided Kingdom. A History of Britain, 1900 to the Present published by CUP.