This concept of underlying poverty he defines as covering those people “who either are in poverty or would be without tax credits”. Hmm. So that’s those people who are in poverty plus some of those who aren’t but would be if not for a particular government policy.
But why, among all government policies, just tax credits? Why not child benefit and jobseeker’s allowance too? I bet they’re masking some poverty. Or the minimum wage? There must be plenty of poverty underlying that. Or the Sure Start childcare provision that allows parents the chance to go out and earn money? Or state education? That must help a few people get decent jobs who otherwise wouldn’t. Or Bank of England independence? Without that, the economy would have done less well these last ten years…
It’s almost as if Clark has it in for tax credits. Although he swears he doesn’t:
Let's be clear: tax credits are an essential part of a modern welfare policy, because it is obviously better to increase someone's income in work than to see them either in poverty or out of work.
But there’s a but:
But, surely, something has gone badly wrong with our economy - and our society - when more and more people every year are unable to earn enough to keep themselves and their families off the breadline.
By “unable to earn enough” he really means “unable to earn enough in the absence of certain government policies, namely tax credits”. Has something gone wrong with our economy – and our society – if this is true?
Well, that’s two questions. The point of the economy is to… actually, there isn’t a point to the economy. It’s the aggregate of the buying, selling, working, hiring, producing, consuming and other such activities that we all carry out. We carry these out to advance our own interests. If the untrammeled workings of the market would leave some people badly off, that’s no fault of the economy per se.
But most of us don’t want an economy with no government intervention. We expect our governments to do just that, in various ways and to various extents. Our society thus affects the working of the economy. One of the key reasons it does this is to ensure that those who’d lose out from laissez-faire are in a better position. There are many ways of doing this.
Clark mentions skills, and of course the government can make itself useful there. But there will always be a lot of low-skilled jobs. For every office block full of well-educated professionals, you’ll need catering and cleaning staff. If we want these people to be able to keep their families off the breadline, then we can’t imagine that the free market will do that. Society – via government – will have to compel employers to pay them more or will have to add to their wages directly. Or both.
As we do.
‘Underlying poverty’? The notion seems to treat anything achieved by government as somehow illegitimate and even unreal. Perhaps we should also have figures for underlying crime (counting those that would be committed if there were no prisons), underlying child mortality (including those deaths that the NHS prevents) and underlying school league tables (showing what exam results would be if schools stopped getting public funding).