Examination of Witness (Questions 297
- 299)
WEDNESDAY 17 JANUARY 2001
PROFESSOR JOHN
VEIT-WILSON
Chairman
297. Professor Veit-Wilson, thank you for
coming. We are deeply grateful for the paper that you have submitted.
As you know, we are holding an enquiry into Integrated Child Credit.
The Government's reform is an opportunity that may not come again
for a long time. We have been looking at expenditure levels and
at what it actually costs to pay for a child as it goes through
various stages of the domestic household. Your work, indeed perhaps
even earlier, inspired by a collaboration that you had with the
Committee some time agoand you produced a rather excellent
little book which I carry with me everywhere[25]talks
about setting adequacy standards in other European counties and
is very interesting to us in that context. You are very welcome
this morning and thank you for your submission. Would you like
to say a few words by way of an opening introduction and then
we have some questions that we would like to address to you, if
we may.
(Professor Veit-Wilson) I am grateful
to you for referring to that earlier work because it arose in
fact out of a meeting of this Committee with the Social Security
Advisory Committee, ten years ago, as you will note from the introduction
to it. A decade later, that research is now being looked at. The
phrase "governmental minimum income standards" arose
out of that work and it is now taken for granted and very widely
used. You invited me to explain a reference to the technical process
of triangulation of evidence about poverty, about the statistical
process of examining what are the low income levels which cause
many deprivations and social exclusions. That is what my paper
is chiefly about. Triangulation, as I have tried to say there,
is a technique which can help to overcome the problem which officials
have again referred to here, that experts and their findings about
poverty disagree. The Government rightly has a concern about deprivations
and exclusions, many of which are caused by low incomes, but no
idea of what incomes are needed to avoid them. In order to make
sense of my comments on the technique, my papers necessarily have
to refer to the context of income maintenance policy in which
it is to be used. That is why I add an appendix on the distinction
between empirical poverty measures and politically credible governmental
minimum income standards, and between the principles of an adequate
level of living, as embodied in a standard for reference purposes,
and actual benefit levels. These distinctions are absolutely crucial
and they are still not widely understood. As one of the DSS officials
said to you on 13 December,[26]
benefit rates are still set in terms of public expenditure and
incentive considerations. My historical research and information
show that this has always been the case in this country. There
has never been a governmental minimum income standard and minimum
benefits rates have always been driven by the lowest level of
wages. That is why I have also added an appendix on the different
tiers of the income maintenance system and on what I mean by political
credibility, since both of them are absolutely unavoidable aspects
of the choice of the government minimum income standard.
298. That is very helpful and clarifies
some of the things that are in your paper. Could I start with
a general question. The Government's own recently-stated standards
in this document "Opportunity for All", published as
Command 4865 last year, have set some new interim standards and
targets for the period up to 2004. They are trying to reduce the
number of children living in households with less than 60 per
cent of the median by at least 25 per cent by the year 2004. Do
you think that the Government is going the right way about achieving
that objective, if that is the right objective?
(Professor Veit-Wilson) I think it is leaving
one of the arrows out of its quiver and that is the essential
one of ensuring that in the first place everybody has enough income
to buy their way, so to speak, out of deprivations and exclusions.
If that basis were established, then it could concentrate on the
wide range of other deprivations and exclusions, some of which
are not caused by or correlated with low income. The answer is
that it is doing some of the right things but one of the things
it ought to be doing, it is not clear that it is
doing.
299. As a specialist yourself, do you have
any clear idea of how the Government is actually doing some of
these calculations in working out adequacy levels? Can you penetrate
the logic that is coming from the Treasury, the statements that
Government and the technical officials have made to date?
(Professor Veit-Wilson) I think there is a danger
in speculating about what officials do and, having done some research
with officials and in the official records, I know how misleading
it can be when there is this speculation. However, there is one
thing that must be clearly understood. When the Government sets
the taper ranges for the various means-tested benefits, and in
particular the one that you are looking at at the moment, or if
we were to take another example, the Working Families Tax Credit,
it must implicitly (if not explicitly) have in mind an upper limit
of income which ought to be achieved and a lower limit of income
which ought not to be gone below. It has never been explained
to us what its rationale is for taking those particular ranges
of income. It may be that nowadays, since I did my research in
the archives and with the officials, there is some conception
of an income target to be achieved. I would like that to be clear
and open; it is not at the moment.
25 John Veit-Wilson [1998], Setting adequacy standards:
How governments define minimum incomes. Back
26
Ms Ghosh, Director of Children's Group, Ev HC 72-i. Back
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