Select Committee on Work and Pensions Written Evidence

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 population.

  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 trade".

  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 benefits—typical of the lot of cleaning contracts.

  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 rent.

  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 poverty—preliminary 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 obesity—no 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 the appendices.

  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 consultation—preliminary 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 as follows.

    "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 researched.

  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) reasons,

    "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 job"

  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 Poor—December 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 Ocean—Brighton 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 found that:

    "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 Lords—Economic Affairs Committee (EAC) report—paras 226-233. The free market acts to maintain and reduce poverty incomes in the UK incomes in the following ways.

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 essentials—nutrition, 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 Appendix A)

    (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 a week.

    (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 debt—a very stressing effect.

    (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 standards—nutritional 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 Bradshaw—in mislaid submission to DWP consultation on "Measuring Child Poverty")

  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 addressing poverty.

  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 policy".

  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.


  31.  Throughout this response to we refer to:

    (a)  Low Cost but Acceptable (LCA)—a minimum income standard for the UK: families with young children—Hermione 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 136-9.

  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 above.

  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 report—our 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 cultures—eg 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 living—MIHL. 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 etc, etc.

    (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 approach—MIHL.


Minimum Income for Healthy Living—October 2000
Less IS/JSA—April 2001
100% Housing and Council Tax Benefit
Shortfall when unemployed
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 in poverty".

  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 child poverty".

The Department of Work and Pensions

A flawed consultation

  45.  The DWP published "Measuring Child Poverty—a 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 Social Work,York.

    Professor John Hills, Centre for the Analysis of Social Exclusion, LSE.

    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 Institute), Dublin.

  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 poverty.

  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 Conclusions—Measuring 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 course—but 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 Islands.

  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" (Bristol—Nov 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 levels"

"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. [119152] 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 evidence!

  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 inequalities.

      (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 babies—which 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 healthy living.

  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 progress".

  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 policy development."


  74.  The DWP has failed to address major points in "its careful analysis of available material" when consulting about measuring poverty.

    (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 strategies.

    (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 prisons—see case histories.

    (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 UK.

    (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 wealth.

Rev Paul Nicolson

8 September 2003

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