Select Committee on Social Security Minutes of Evidence

Examination of Witness (Questions 297 - 299)




  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 ago—and 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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