Memorandum submitted by Zacchaeus 2000
Trust (CP 05)
I am grateful for the help and support Zacchaeus
2000 has received from Peter Ambrose at University of Brighton
whose work "Love the work, hate the job" (May 2003)
measures the effectiveness of tax credits in meeting their objective
of eliminating child poverty and opens up the discussion about
how to measure the savings in the NHS by reducing poverty related
ill health, from Eldin Fahmy and David Gordon of the University
of Bristol for sending me a copy of "Mapping deprivation
in the south west" (November 2002) that does so much to build
confidence in budget standards methodology by the use of "triangulation"
that shows several approaches are measuring the same phenomenon,
to Jonathan Bradshaw at the University of York for allowing us
to use his description of the use of the methodology by the Family
Budget Unit, to Jerry Morris at the London School of Hygiene and
Tropical Medicine who with his team has highlighted the essential
connection between budget standards and public health, to John
Veit Wilson who has researched the international uses of minimum
income standards, to Guy Palmer of the New Policy Institute for
his comments on the text, and for the continuing support of the
distinguished coalition of 65 leading NGOs calling on government
to include budget standards in its measurement of poverty and
when creating policies that will relieve poverty in the UK.
1. The causes of child poverty cannot be
considered apart from the causes of all poverty in the UK. Is
generally accepted that income needs to be central to any poverty
measurement. This submission addresses that conclusion.
2. Funding of the national health and education
services are undermined by poverty related ill health.
3. Worthwhile public health strategies to
reduce the inequalities in health at the Department of Health
are undermined by the Department of Work and Pensions persistent
and historic aversion to measuring the minimum incomes needed
for healthy living.
4. There are economic as well as humanitarian
reasons for relating minimum incomes to healthy living. Inward
investment into the economy follows a healthy, educated and skilled
5. Political consequences if a significant
proportion of the population of 20-30% is seriously poor.
6. The very least UK governments should
do in a global economy is to ensure that the potential gains in
wealth are reflected in minimum incomes that provide healthy living.
7. An unregulated free market oppresses
the poor. The General Agreement on Trade in services allows multinational
companies to sue national governments if they "hinder free
8. HSBCs (a global giant) free market contracting
out of the cleaning of their new office in Canary Wharf results
in the lowest quote getting the contract so leaving the tax payer
to top up low wages with tax credits when HSBC could afford to
pay a living wage that saves the administrative costs of the credits,
housing and council tax benefitstypical of the lot of cleaning
9. The crucial test of poverty is the income
after rent and council tax. The housing shortage, scarcity of
child care, and very limited ability to borrow results in high
prices in rents, child care and interest rates that reduce the
income available to buy essential food, clothes and fuel. Inadequate
minimum incomes force the sacrifice of nutritious food to pay
10. The extent and degree of poverty in
the UK is worse than shown by the official statistics because
no detailed examination is made of the effect of free market on
incomes after rent and council tax. This poverty is exacerbated
by the Social Fund that reduces incomes with repayments of up
to £20 a week and by the draconian, and sometimes mistaken,
enforcement of unavoidable rent and council tax arrears by the
local authorities, inland revenue for child benefit or tax credit
over payments an DWP for IS/JSA. Some families live is a state
of perpetual litigation and financial crisis. Case histories illustrate
this endemic injustice. ATD Fourth World illustrates how children
are taken into care due to the poverty of their parents. There
is little legal or voluntary support for the poorest threatened
with prison, eviction and the bailiffs.
11. The Department of Employment mislaid
significant submissions about budget standards to their "Measuring
child poverty consultation". Budget standards were ridiculed
by a Minister on Radio 4 before the results of the consultations
were published. The DWP has failed to keep up with biomedical
and public health research. Child nutrition does not feature explicitly
in its "Measuring child povertypreliminary conclusions".
The fetus of impoverished pregnant women are particularly at risk
of a low weight birth.
12. Budget standards provide useful long
term measures of the adequacy of statutory minimum incomes, the
opportunity for the public to assess whether the items in minimum
budgets that that the tax payer finances are fair and reasonable
to the poor and the tax payer. They are educational in providing
recommended (not prescribed) healthy diets and menus. This could
help save the NHS £500 million treating obesityno
other estimate of the savings from reducing poverty.
13. Sixty-five leading NGOs, including unanimous
votes in the General Synod of the Church of England, The General
Assembly of the Church of Scotland, the Methodist Conference and
the UNISON annual conference, 86 Church leaders, 135 Members of
Parliament, the Social Security Committee three times, the Scottish
Affairs Committee once, and senior academics supporting the Zacchaeus
2000 request to government to fill this vital gap in official
information. The most recent NGOs to join the coalition this year
are the Faculty for Public Health Medicine of the Royal College
of Physicians and the National Consumer Council. List shown in
14. Government success in reducing poverty
in general and child poverty in particular can only receive credible
measurement from an independent and transparent Minimum Income
Standards Commission that would provide the public and the government
with information about the minimum incomes needed for healthy
living for the variety of house holds from cradle to grave.
1. The Department of Work and Pensions "Measuring
child poverty consultationpreliminary conclusions"
reported that it was "generally accepted that income needs
to be central to any poverty measurement". This submission
addresses that central conclusion. Obviously, however, the causes
of child poverty cannot be discussed independently of the general
causes of income poverty.
2. We are also attaching a submission from
ATD Fourth World written by Matt Davies their National Coordinator
and a trustee of Zacchaeus 2000. That submission and our case
histories show how fragile, stressful and complicated life can
become for individuals and families whose statutory minimum incomes
are inadequate. The authorities combine in an oppressive and uncoordinated
way to make poverty worse. The poorest have very little help to
get them through a life of perpetual litigation and financial
crisis. It is the state that decides the level of poverty in the
UK and is therefore the primary cause of it.
3. All the extra funding of national health
and education services free at the point of delivery is undermined
if a significant proportion of the population receive statutory
minimum incomes that are not specifically intended to provide
good health from cradle to grave.
4. A letter dated 13 August 2003 written
on behalf of John Reid from Michelle Wiseman of the DoH to Zacchaeus
2000 describes the problem and the strategy for dealing with it
"Overall, health and life expectancy are
still linked to social circumstances and childhood poverty. Although
there have been improvements, the gap in health outcomes between
those at the top and bottom ends of the social scale remains large
and in some areas the gap continues to widen. Some parts of the
country have the same life expectancy as the national average
over 50 years ago. These inequalities mean poorer health, reduced
quality of life and early death for many people.
The Government's aim is to reduce health inequalities
by tackling health specific and wider determinants of health inequalities,
such as poverty, poor educational outcomes, worklessness, poor
housing, diet and nutrition and physical activity. This approach
is supported by a national health inequalities target in the areas
of life expectancy and infant mortality.
The child poverty strategy has focused on helping
to ensure decent family income, with work for those who can and
support for those who cannot. It also seeks to provide support
for parents, so that they can provide better support for their
children; as well as provide high quality services in all neighbourhoods,
with targeted interventions for those with additional needs."
5. The DWP undermines this strategy with
it's persistent and historic aversion to measuring the minimum
incomes needed for healthy living. Professor John Veit Wilson
has advised us that the only official attempt there has ever been
to find out whether minimum income levels are sufficient to help
the UK's poorest households feed and clothe their families, keep
warm and pay bills such as rent and taxes "was a secret study
of the National Assistance Scale Rates in 1964-65. This study,
the Windsor Report, revealed that the rates were completely inadequate
for such purposes." It was placed under Official Secrets
Act until 1995.
6. This failure to focus on the connection
between inadequate incomes and ill health has costly economic
and political consequences the extent of which has not yet been
7. The Economic Affairs Committee (EAC)
of the House of Lords asked Niall FitzGerald, Chairman and CEO
of Unilever plc, what factors determined whether a transnational
corporation would invest in a country. He suggested four: political
stability, good macroeconomic management, attractive financial
returns and "finally, but most important of all, a healthy,
educated and skilled population".
8. The Report of the Commission on Macroeconomics
and Health also argued to the EAC, on the practical reasons why
a healthy workforce is so important for economic (as well as humanitarian)
"Healthier workers are physically and mentally
more energetic and robust, more productive, and earn higher wages.
Their productivity makes companies more profitable, and a healthy
workforce is important when attracting foreign direct investment.
They are also less likely to be absent from work due to illness
(or illness in their family) and to be more productive on the
Unhealthy workers are uneconomic for employers.
They are also uneconomic in the health service that has to treat
expensive poverty related ill health, in the schools that try
to cope with poverty related educational under achievement and
the prisons, police and courts that pick up the pieces of poverty
related crime. There is no estimate at the Treasury of the productivity
gains nor savings would be made if poverty were eliminated or
even substantially reduced.
9. The EAC reported that the evidence suggests
that, to be effective, globalisation requires management at the
national and international level. The White Paper on globalisation(Eliminating
World Poverty: Making Globalisation Work for the PoorDecember
2000) stated that whether globalisation works well or works badly
will depend on policy intervention:
"Managed wisely, the new wealth being created
by globalisation creates the opportunity to lift millions of the
world's poorest people out of their poverty. Managed badly and
it could lead to their further marginalisation and impoverishment.
Neither outcome is predetermined; it depends on the policy choices
adopted by governments, international institutions, the private
sector and civil society."
10. There are also political consequences.
Professor Peter Ambrose asks in his report on Central Stepney
(A Drop in the OceanBrighton June 2000)
"How is electoral support to be maintained
among a significant proportion of the population, maybe 20-30%,
who are seriously poor, live in under maintained a unhealthy environments,
whose situation is worsened by marked income and health inequalities?
How, within the strict limits on social welfare imposed by fiscal
limits, can a belief be instilled in this poor population that
real help is at hand?"
11. He is supported by Professor Patrick
Seyd whose Citizen Audit published in August by Sheffield University
"Few people believe that the government
takes notice of their opinions. There is a danger that the voice
of the very young, the old, and the less privileged is becoming
excluded from the politics of the 21st century. This could pave
the way for the creation of a disaffected group that could be
prey to the attentions of populist politicians"
12. Theses are all profoundly important
reasons why mainstream political parties should commit themselves
to taking all the necessary steps to ensure that,
(a) all statutory minimum incomes are enough
to pay for healthy living throughout the life cycle;
(b) the lowest income in employment or unemployment
never falls short of that amount; and
(c) the necessary independent and transparent,
institution measuring the minimum incomes for healthy living is
set up. A Minimum Incomes Commission. It could also report on
the government's and employers' performance against robustly,
transparently and independently established minimum income standards,
and measures the savings and increased productivity in the economy
as poverty is eradicated or even significantly reduced. William
Buiter told the EAC.
"The key political issue of our time is
to ensure that institutions are created, at all levels, local,
national, regional and global, to ensure that [the] potential
aggregate gains are realised and shared widely and fairly. . .
. The gains from globalisation will not be reaped without active
institution-building efforts at all levels."
13. The very least governments can do in
a global economy is to ensure that the lowest incomes are enough
for healthy living and a minimum degree of participation in the
community. Is the political will of any democratically elected
government of any political persuasion in the UK up to this challenge
in a global economy to regulate the free market where it creates
poverty or are the minimum needs of the poorest to be over-ridden
by the power of free market global capitalism?
The Free Market Oppresses the Poor
14. Poverty, social exclusion and related
ill health in the UK are results of people not being able to pay
for everyday essentials. The National Consumer Council persistently
reports that the poor "have to sacrifice one essential to
pay for another" or fall into debt. An unregulated free market
is by no means the friend of the poor.
15. The global context is provided by the
General Agreement on Trade in Services, which allows multinational
companies to sue governments if they bring in laws that "hinder
free trade". House of LordsEconomic Affairs Committee
(EAC) reportparas 226-233. The free market acts to maintain
and reduce poverty incomes in the UK incomes in the following
Tendering for out Sourced Cleaners
16. TELCO (The East London Communities Organisation)
and UNISON have been running a living wage campaign in the East
End of London. The hourly rate claimed is £6.50 an hour researched
by the Family Budget Unit that would take families out of the
hassle of tax credits, housing and council tax benefits; and the
Inland Revue, Local Authorities and the employers out of the costs
of their administration.
17. HSBC, a multinational giant, were about
to put the contract out to tender for cleaning their new HQ at
Canary Wharf. TELCO wrote to the chairman Sir John Bond asking
the bank to insert a clause in the contract that required the
cleaning companies to pay the living wage of £6.50 an hour
to their cleaners. Sir John refused to intervene in the free market
process of requiring the companies to tender for the contract.
That was the right commercial decision. The bank got the cheapest
contract, the rate of pay was £5.50 an hour, and the Treasury
subsidises the cleaning of HSBC headquarters with tax credits
to the cleaners. Which raises the question "Why should the
tax payer subsidise the cleaning of Sir John's office, inflicting
administrative costs of tax credits on government and contractors,
when HSBC can afford to pay a living wage?"
18. The search for low cost labour in India
and movement there and elsewhere of call centres and manufacturing
is frequently used as a threat to the UK labour force seeking
a living wage. How long will it be before the call centres move
from India to China because the wages are even lower there?
The Market Reduces Inadequate Incomes
19. The income after rent and council tax
is the crucial test of poverty because it has to pay for all other
essentialsnutrition, heating, cooking, food storage, clothes,
nappies, washing, cleaning, transport, exercise and personal items
etc. Income support and child benefit for a couple with two children
after rent and council tax is currently an inadequate £178.50
a week. The free market reduces this already inadequate income
in the following ways:
(a) There is a housing benefit taper that
protects the tax payer from paying the high rents charged in the
private sector that exploit the shortage of housing. The balance
of rent not paid by housing benefit has to be paid out of the
£178.50, and so competes with a healthy diet and other essentials
for an already inadequate income, a stressing effect. (A note
on the Housing Crisis by Professor Peter Ambrose is attached as
(b) Unemployment benefits are taking over
a month to process. The jobcentres offer Social Fund loans meanwhile.
They are deducted from benefit in due course at up to £20
(c) Tax credits in work do not always cover
all the rent and council tax that was covered in unemployment
by 100% housing and council tax benefits. The Treasury is aware
of this. The high increases in an already regressive council tax
exacerbate this effect. The consequences for some families are
catastrophic in repossession or suspended repossession for rent
arrears and or suspended prison sentences for council tax arrears
with the court and bailiffs costs added to the debta very
(d) The childcare tax credit only covers
70% of the cost. The balance, if the worker with two children
is receiving the minimum wage, will have to come out of the £178.50.
There is a shortage of nursery space therefore the price is high.
(e) Door to door lenders and high interest
retailers, with interest rates of up to and over 300%, exploit
the facts that statutory minimum incomes are inadequate, borrowing
is unavoidable and no bank will lend to the poor. The DTI has
proposed setting up a fast track tribunal to decide whether such
interest rates are unfair! Many European countries have introduced
an interest cap. Unlicensed loan sharks enforce higher interest
rates with baseball bats and "invitations" to prostitution.
(f) Gangs of illegal immigrants are paid
well below the minimum wage to harvest the crops in East Anglia,
a form of exploitation that profits the farmers and the gang fixers.
Workers are also exploited with low pay on building sites.
20. A possible solution to the high and
disproportionate free market cost of child care, rent and loans
to the poorest and therefore high profits from public funds spent
on welfare benefits is to franchise the nurseries, landlords and
lenders by asking them to tender for the privilege of profiting
from taxpayers. It would also prevent a loss to work rather than
a gain to work if all regulations governing welfare payments never
reduce the income after rent and council tax.
21. The poverty after rent and council tax
is exacerbated by the, sometimes mistaken, draconian enforcement
of unavoidable rent and council tax debts against the inadequate
incomes of vulnerable people. This has expensive mental health
consequences. Case histories are provided to illustrate this.
22. The Survey of Low-Income Families interviewed
6,557 families with low and moderate incomes with children in
1999 and 2000 reported:
(a) Among all lone parents, approaching half
(44%) had a higher income (in 2000), one-third (32%) were worse
off, and 24% were on roughly the same income. For couple families
on low or moderate incomes in 1999, by 2000 over half (51%), were
better off, 33% were worse off, and 16% roughly unchanged 2.3).
(b) Levels of hardship were closely linked
to levels of income among the panel. Each of the nine components
of the overall hardship measure was associated with lower levels
of income, as was being in hardship itself.
(c) In both 1999 and 2000 working families
who received in work support continued to experience the highest
housing arrears. (my emphasis)
23. The figures would look different if
any detailed examination had been made of the effects of the free
market on incomes after rent and council tax.
24. The extent of poverty is worse than
the official statistics show because of these reductions of the
amount of money available for food, warmth and clothing by unavoidable
expenditure that is sometimes inflated by market shortages.
25. Sixty-five NGOs with 10 million members,
a very substantial consensus, are supporting the Zacchaeus 2000
petition calling on government to introduce minimum income standards
in the United Kingdom. (See Appendix B)
26. Budget standards methodology produces
estimates of the minimum incomes standards (MIS) needed for healthy
living across the life cycle. "All income standards involve
judgment. Budget standards are valuable because the judgments
are less arbitrary than other ways of fixing thresholds (such
as 60% of the median). Modern budget standards methodology involves
a good deal of empirical effort to justify what items are included,
their lifetimes and how they are priced (by landlords, in the
shops and by utilities). They use official standardsnutritional
standards, heating standards. They use consumer surveys on patterns
of consumption. They use focus groups and other methods to validate
the judgments made." (Professor Jonathan Bradshawin
mislaid submission to DWP consultation on "Measuring Child
27. Budget standards seek to estimate the
income needed by different household types in order to live healthily
and prevent ill health, and not simply to avoid poverty. This
approach joins up policies addressing public health with policies
28. Last November the Prime Minister took
personal charge of reducing the health gap between rich and poor,
guaranteeing to put progress "at the heart of government
29. They can be usefully researched both locally
and nationally. A variety of applications by different Universities
have been shown to measure the same phenomenon in work funded
by the South West Public Health Observatory at the University
of Bristol (November 2002) There is good reason for the public
and the government to have confidence in the methodology.
30. Minimum income standards are set in
the USA, the Netherlands, Sweden, Norway, Finland, Belgium, Germany,
France, New Zealand and Australia, the Channel Islands, which
vary in their attention to specific arrears of need. The Universities
of Brighton, Bristol, London, Loughborough, Warwick and York already
use budget standards in the UK.
LCA and MIHL
31. Throughout this response to we refer
(a) Low Cost but Acceptable (LCA)a
minimum income standard for the UK: families with young childrenHermione
Parker, Michael Nelson, Nina Oldfield et al. Commissioned from
the Family Budget Unit (FBU) by the Zacchaeus 2000 Trust and published
by us and the Policy Press in Bristol (1998)ISBN 1-86134
32. And to,
(a) Love the work, hate the job: Low Cost
but Acceptable (LCA) and the "exported costs" of low
pay in Brighton and Hove, Ambrose, P (2003) Health and Social
Policy Research Centre, University of Brighton, Falmer). ISBN
1 901177 43 2.
33. A comparison of the two reports listed
above reveals that,
(a) IS/JSA for a couple with two children
under 16 has increased from £121.75 a week in 1998 to £178.50
in 2003, an increase of £56.75 a week. IS/JSA was £39
below the Family Budget Unit LCA level in 1998 in York. It is
£0.97 below in 2003 in Brighton.
(b) IS/JSA for a single parent with two children
has moved from £98.70 to £147.55 an increase of £48.85.
It was £28.24 below LCA in 1998. In 2003 it is £9.46
34. As a result of the introduction of the
NMW and tax credits a couple with one of them working full time
and the other part time are £36.66 a week better off than
LCA when receiving the minimum wage. The gains for one working
full time or one working part time are £23.17 and £4.14.
35. Nevertheless LCA is an understimate
and families can be worse off in work than out. These problems
and possible solutions are set out above and in greater detail
in Appendix 1 of the Ambrose reportour Appendix D.
36. The budget standards approach confirms
that the Labour government was right to make ending child poverty
a priority when it came to power in 1997. It was endemic in the
UK then and, despite the improvements, it still is.
37. LCA has been successfully applied in
East London, Swansea and Brighton and Hove, and for the elderly.
It has also been taken into account in the South West in work
at the University of Bristol funded by The South West Public Health
Laboratory. It can be adapted to households in different cultureseg
the Muslim household study.
38. Budget standards have been adapted for
single people by the University of London team (at LSHTM). They
research the minimum incomes needed for healthy livingMIHL.
They are now working on the needs of old people on behalf of Age
Concern. The principles of budget standards methodology have been
described by Professor Jerry Morris as,
(a) Rigorous assessment of available scientific
knowledge of personal needs in diet, physical activity, housing
(b) Minimal realistic costing of meeting
those needs today in the UK.
39. Using the research done by Professor
Morris and his colleagues for single adult working men aged 18-30
we show below the weekly shortfall from the minimum income for
healthy living when they are unemployed and receiving IS/JSA.
This is the minimum income for healthy living approachMIHL.
|Minimum Income for Healthy LivingOctober 2000
|Less IS/JSAApril 2001
|100% Housing and Council Tax Benefit||-52.21
|Shortfall when unemployed||42.76
|Income Support Needed for Healthy Living Aged 18-30 (a) + (b) £84.76 pw
40. Although the figure is derived from research covering
workingmen it is assumed that unemployed men and women would not
need an income significantly more or less. That is a national
average. The needs in Metropolitan areas will cost more. No attempt
has been made by any government to relieve the poverty of unemployed
single childless adults since 1981.
41. The research is also relevant to the health of impoverished
single pregnant women conceiving and giving birth to their first
child. Lord Patel, an eminent gynecologist, told the in the House
of Lords in a debate of minimum income standards in 1999. (Hansard,
20 July 1999: Column 882).
(a) Research carried out by my colleagues and I has clearly
demonstrated the strong link between low birth weight and the
low socio-economic group of the mother.
(b) The Royal College of Obstetricians and Gynaecologists
presented evidence of the association of poor nutrition of the
mother with low birth weight to Sir Donald Acheson Committee.
(c) The work of Professor Eva Alberman, a renowned epidemiologist,
has clearly demonstrated the reduction in childhood mortality
and morbidity that would result from improvements in birth weight
of babies born at less than 2,500 grams through improved nutrition
of the mother.
(d) The relationship between low birth weight and adult
diseases such as hypertension, heart disease and diabetes has
already been referred to as evidence produced by the Medical Research
Council in its research.
(e) Many gains are to be had by improving the nutrition
of pregnant women through improving the income support of women
42. Child poverty begins with malnourished conception
and continues to inflict preventable costs to the health service
from the birth of an underweight baby and the through a life time
of sickness and underacheivement. There are powerful economic
as well as humanitarian reasons for ensuring statutory minimum
incomes are high enough to provide healthy living.
43. Eldin Fahamy and David Gordon at the University of
Bristol in "Mapping Deprivation in the South West" (November
2000), funded by the South West Public Health Laboratory concluded.
The LCA budget standard produces rather lower estimates of
the income needed to avoid poverty for different household types
than those estimates derived using the MIHL approach. This is
to be expected since these two standards are conceptually distinct.
The LCA budgets estimate the income necessary to meet the basic
physical, social and psychological needs of individuals and households
living in the UK at the end of the twentieth century. This approach
does not always make allowance for the patterns of consumption
(eg sporting and leisure activities, nutrition, etc) necessary
for sustained healthy living. However, these types of expenditure
are explicitly included within the budgets derived from the MIHL
methodology developed by Morris and colleagues. This approach
seeks to estimate the income needed by different household types
in order to live healthily, and not simply to avoid poverty.
44. This essential connection between public health and
adequate incomes does not feature in the DWP's "Measuring
The Department of Work and Pensions
A flawed consultation
45. The DWP published "Measuring Child Povertya
consultative document" in April 2002. On 13 May 2002
we e-mailed the Secretary of State at the DWP seeking answers
to the following questions.
(a) Can your consultation about measuring child poverty
be expanded to include, pregnant women, childless adults from
the age of 18-60, and pensioners or not?
(b) For the first time in history the government now decides
the level of all minimum incomes, in or out of work and by so
doing decides the level of income poverty. But no British government
has ever measured the minimum incomes needed for healthy living.
Does your consultation include the measurement of the minimum
incomes needed for healthy living or not?
46. Zacchaeus 2000 did not receive a reply and the DWP subsequently
apologised for losing it the e-mail. Apologies are not enough
when the health of the poorest people in the UK is the issue.
47. Budget standards were called "absurd", the
"Holy grail" and "social science fiction not social
science fact" in the middle of the "Measuring Child
Poverty" consultation by Malcolm Wicks MP, then Minister
for Work, in the BBC Inside Money programme in August 2002. He
totally ignored all the biomedical and public health research
supporting these proposals. (Transcript attached as Appendix)
The DWP "Preliminary conclusions" has no specific reference
to the weekly cost of healthy nutrition. DWP also lost submissions
to the consultation on budget standards from York and Bristol
Universities, both experts in the field, and some others. This
is not an appropriate response to a reasonable proposal from 65
knowledgeable and distinguished NGOs.
48. A Technical Committee has now been selected by the
DWP. It comprises:
Sir Tony Atkinson FBA, Warden, Nuffield College, Oxford.
Professor Jonathan Bradshaw, Department of Social Policy and
Professor John Hills, Centre for the Analysis of Social Exclusion,
Alissa Goodman, Programme Director, Education and Evaluation
Section,Institute for Fiscal Studies.
Stephen McKay, PFRC, School of Geographical Sciences, Bristol.
Professor Chris Whelan, ESRI (Economic and Social Research
49. This committee was not appointed until after the
consultation was published in May 2003. Up to that time they have
had no say about whether minimum income standards should be progressed
by the DWP. The committee will not meet. They will respond by
e-mail to papers produced by the DWP.
This is not a transparent way of proceeding. The papers should
be available to all NGOs with a technical interest in measuring
50. The decision about Minimum Income Standards seems
to have been made before the consultation started. The preliminary
conclusions continued to brief against minimum income standards.
Paragraphs 16-19, page 44, of the Preliminary ConclusionsMeasuring
child poverty consultation.
51. We believe that this attempt to discredit and undermine
the work in the Universities researching minimum income standards
should be withdrawn by the Department of Work and Pensions. The
following comments address every sentence.
Paragraph 16 "Some correspondents suggested a measure
of adequacy or minimum income standards."
52. The Department has been aware for several years that
a growing number of NGOs (list attached Appendix B) are supporting
the introduction of minimum income standards (MIS). The latest
number is 65 NGOs with 10 million members. The latest to join
in May 2003 were the Faculty of Public Health Medicine of the
Royal College of Physicians, Christian Council for Monetary Justice,
and the Ilfracombe Credit Union.
Paragraphs 16 and 17 "We do not think this (MIS) is appropriate
for inclusion in a long term measure of poverty for the following
reasons. First and foremost, despite a wide range of research
into budget standards, there is no simple answer to the question
of what level of income is adequate."
53. Of coursebut this has not stopped such a measure
being adopted in the US, the Netherlands, Belgium, Sweden, Norway,
Finland, Germany, France, New Zealand and Australia, the Channel
54. The DWP consultative document is strewn with "complexity"
beginning with Andrew Smith's introduction. "These are complex
and important issues," he writes.
We believe the public will never understand the four options
suggested by the DWP precisely because they are very complex.
55. 60% of the median or average incomes are useful but
arbitrary measures. They have the benefit of simplicity. They
are better measures of inequality than they are of poverty largely
because they are phrased in terms of inequality rather than poverty
and thus do not resonate with the public as a measure of the number
of people in poverty.
56. MIS can tell the public the minimum amount of money
the researchers estimate a family with two children need to spend
on food, clothes, fuel etc. The same can be done for all types
of household. The public, rich and poor, can then compare this
with their own experience and come to a view about the fairness
of such minimum incomes and whether or not they should be provided
by the taxpayer or the employer or a mixture of the two.
Paragraph 17 "Different research methods tend to make
different assumptions that are essentially subjective."
57. There is nothing subjective about the price of a
can of beans in a Supermarket. The FBU research states the quantities
and the prices in the shops, of food, of fuel, telephone, housing,
transport etc, of every item included in the variety of minimum
incomes standards that are assumed to be necessary. Every assumption
is transparent and open to challenge and change.
58. MIS start and end with actual prices and quantities
of minimum human need. An estimate cannot be produced that does
not have to make assumptions and then have them tested. The assumptions
made by the Family Budget Unit in the work Zacchaeus 2000 commissioned
in 1998 were tested in ten UK locations with low income families
for consumer acceptability. None of the four proposals in the
consultation touch the ground to that extent.
59. Fahmy and Gordon in "Mapping Deprivation in
the South West" (BristolNov 2002) concluded that 365,258
(19.6%) of households in the South West are classified as LCA
poor, and 487,176 (26.2%) as MIHL poor. They showed a strong convergence
between the two and, using the "Triangulation" methods
suggested by Viet Wilson, showed a close relationship between
"Breadline Britain" and LCA. All the evidence coming
from the Universities shows that the public and the government
can have confidence in budget standards methodology.
60. There are no methodological problems that cannot
be solved by bringing together the highly qualified people who
have been involved in researching minimum income standards to
agree a standard methodology with each other, and with typical
representatives of households of various kinds and the government.
61. Budget Standards methodology has now been used in
the Universities of Brighton, Bristol, Cardiff, London, Loughborough
and York. Professor John Veit Wilson of the University of Newcastle
upon Tyne has researched its international uses.
62. On 27 March 2001 in its report on the Social Fund
the Social Security Select Committee recommended; "We repeat
the recommendation first made in our report on Integrated Child
Credit, (22 March 2001) that the Government should establish a
specific budget to fund research into the levels of income needed
to avoid poverty; and that it should set up a working party involving
policy makers, academics and other interested parties to assist
the Government to devise publicly acceptable measures of such
"Even methods that purport to define the cost of a `scientifically
determined diet' in effect have to make a number of subjective
assumptions about needs. This can produce inconsistent answers
to the same questions. For example, two pieces of analysis can
produce different figures for a minimum income necessary for a
lone parent with one child age five."
63. Andy King MP asked what the two pieces of analysis
were that underlay this statement on minimum income for a lone
parent on page PQ 13 May 1003.  Chris Pond replied it
" was not referring to two actual pieces of analysis, but
using an example to illustrate a specific point . . . two pieces
of analysis can conceivably produce different answers for the
same family type". Any thing is conceivable if there is no
64. Dieticians and nutritionists are involved in researching
minimum income standards to ensure that the sum allowed for food
comprises items that will ensure a healthy diet. That in itself,
when published, is educational. It could help save some of the
£500,000,000 that obesity costs the NHS.
65. The Food Poverty Project at SUSTAIN, one of our supporting
NGOs, responded to our consultation by sending us the following
paragraphs that they have sent to the DWP.
(i) We were concerned to note that the issue of child
nutrition does not feature explicitly in the document.
(ii) Conspicuously, however, food features at the
top of the parents' list and second on the children's list of
things they feel they miss out on most (pp 16 and 22).
(iii) There is now a wealth of evidence, from academics
and the voluntary sector, showing that having either poor quality
or insufficient food is a major issue for children and parents
in poverty. The evidence is both quantitative and qualitative.
It shows that food poverty causes hardship on a day-to-day basis;
that children in poverty experience diets that are deficient in
essential nutrients even though they may be providing excessive
amounts of fat, salt and sugar; and that poor diet before conception,
during pregnancy and during childhood affects birthweight, growth,
long-term health and educational attainment, exacerbating health
(iv) In the light of all this, we found it surprising
that food access and nutrition didn't get any formal recognition
in your report.
66. The BMA, another of our supporting NGOs, responded
to our consultation as follows:
(i) The BMA believes in providing basic income levels
for all members of society that will act as a step to reducing
the prevalence of poverty, and the outcomes caused by poverty.
(ii) At the present time the BMA is finalising a new
report called Adolescent Health Strategies, currently out for
review prior to publication. This draws attention to the role
played by poverty in dietary choices and nutritional inequalities.
Inappropriate nutrition, often influenced by financial considerations
can lead to obesity, morbidity and adult mortality.
67. The Ambrose report has a section that not only reviews
the `health gradient' literature but also collates some of the
work that is going on around the world into the cost of poverty
ie the savings that would be available if poverty were eradicated.
(Section 4 of Ambrose 2003) see Appendix E.
68. To the layman it seems obvious that there is an amount
of money that is so low the recipient will starve to death if
more money is not provided to buy food. Similarly it is not beyond
the world of science to estimate the minimum amount of money that
should be available to the poorest to buy enough of the right
kind of food to keep them healthy and to minimise the risk of
future ill health. This is particularly important for pregnant
women given the probably immense lifetime costs of low birthweight
babieswhich we don't yet know because the research has
not been done!
(a) Last November the Prime Minister took personal charge
of reducing the health gap between rich and poor, guaranteeing
to put progress "at the heart of government policy".
This policy is ignored by the DWP "preliminary conclusions".
It proposes no means of measuring the minimum incomes needed for
69. In the work we commissioned from the Family Budget
Unit in 1998 the food budgets were based on the governmental research.
The National Food Survey, The Family Expenditure Survey, The Dietary
Reference Values for Food Energy and Nutrients for the United
Kingdom to ensure a diet "which satisfies the estimated nutrient
requirements of the household". The methodology is set out
in very precise detail on pages 20-27 of the FBU report.
Paragraph 18, "Even supposing the adequacy could be defined
on a fully consistent basis, it would be difficult to generate
a long term, robust time series, which is essential for measuring
70. This cannot be true. See paragraph 28 of this submission
showing the improvements in IS/JSA compared to the LCA standard
for a couple with two children in the past five years from 1998
to 2003. The MIS figure would be up dated every year with the
various price indexes and researched, say, every five years to
update the MIS in line with changes in the market and local variations
in living costs. This would be "a long term robust time series
essential for monitoring progress". Another example would
be the percentage above or below MIS. It would have the advantage
of being specific to types of households, children or childless,
unemployed, employed and pensioners, and to areas.
71. On the 26 July 2000 the SSSC in its report on Pensioner
Poverty stated, "such research should be conducted at regular
intervals to inform the Government's progress in countering poverty
and social exclusion among older people".
72. In the budget speech Gordon Brown stated, "While
the minimum wage today is £147 for a 35-hour week, tax credits
raise the minimum family income for a lone parent with two children
to £276 even after tax-almost twice as much as the minimum
wage. And tax credits are the modern route to eradicating poverty
by making work pay". Hansard 9 April Clmn 283.
73. He had no idea whether £276 a week is enough
to keep a lone parent with two children healthy. MIS would provide
a robust estimate with which to compare £276 a week. If it
were too low it would provide a target for lifting children out
of poverty; if it were too high then, no doubt, the government
and all the rest of us would cheer.
Paragraph 19 "We take research into family budget standards
seriously and our position on minimum income standards has been
been arrived at through a careful analysis of the available material.
We will continue to keep abreast of research in this area of our
74. The DWP has failed to address major points in "its
careful analysis of available material" when consulting about
(a) Budget standards used over the long term can show
how well the government is doing in the elimination of child poverty.
The comparison of the 1998 and 2003 reports proves that point.
(b) The DWP does not seem to have any operational interest
in public health, nor in medium and long-term investment in cost-minimization
(c) It is obviously vital to public health, the economy
and social cohesion that the poorest should have enough income
to ensure their capacity to buy a healthy diet. There is no mention
of this in the "preliminary conclusions" to the measuring
child poverty consultation.
(d) The draconian enforcement of unavoidable debts due
to inadequate incomes in an expensive economy has led to at least
one suicide (reported by the Local Government Ombudsman) and has
expensive mental and other health consequences in NHS, the Schools,
and for the police, the courts and the prisonssee case
(e) Budget standards will provide a consistent measure
of poverty for the unemployed, the employed, families, single
adults and pensioners from a national perspective and in the light
of sharp variations in living costs around the country. Measuring
child poverty is obviously important but the opportunity is being
missed to provide a methodology to measure all poverty in the
(f) Government success in abolishing child poverty can
only receive credible measurement that will be believed by the
public from an Independent Commission with a membership like that
appointed to the Technical Committee.
(g) There is a gulf between the reality and suffering
of families in poverty in the UK and the perception of policy
makers. There is a lack of urgency. Neither politicians nor the
media give the wealthier majority cause for a deep concern that
there is any poverty at all let alone the agonizing recurring
crises so many families regularly face.
(h) Official statistics underestimate the extent and degree
of poverty in the UK because unavoidable expenditure like rent,
council tax and travel to work reduce the already inadequate incomes
available for the purchase of food, fuel and clothing both in
and out of work.
(i) Only the state has the power to curb the rampant excesses
of free market capitalism that create inequalities in health and
Rev Paul Nicolson
8 September 2003