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From International Socialism, No. 62, September 1973, p. 29.
Transcribed by Christian Høgsbjerg, with thanks to Paul Blackledge.
Marked up by Einde O’Callaghan for ETOL.
Poverty and Equality in Britain
J.C. Kincaid
Penguin, 60p
POVERTY was rediscovered by the major political parties in 1966 following the publication of The Poor and the Poorest by Brian Abel-Smith and Peter Townsend. Subsequent discussion of the problem has tended to isolate poverty from total inequality in society, poverty being regarded as a residual problem which could be dealt with by small scale redistribution through slight modifications to the present taxation and social security systems.
Kincaid maintains that poverty and inequality are interlinked because poverty is lack of economic power; and since the amount of economic power if finite the position of the poor can only be improved by the redistribution of resources. The purpose of this book is to destroy the myth that the Welfare State operates as a gigantic funnel which transfers purchasing power from the rich to the poor and to explain the basic reason for the continuance of poverty in Britain. The analysis concentrates on the period 1948–70, although there is a short postscript on the Tory tax credit and pension schemes.
It begins with a discussion of the available evidence on the causes and extent of poverty. The hard data relates to 1966–7 when the main causes of poverty were inadequate insurance benefits, lack of take-up of National Assistance, the wage stop and low wages. The evidence is somewhat out of date, and so Kincaid attempts to assess the impact of Labour’s policies on the problem. The record makes very dismal reading and although the picture is not quite as black as Kincaid paints it (he ignores the publication Two Parent Families by the Central Statistical Office) there can be no doubt that, at best, the position of the poorest families was only marginally improved in the period 1968–70.
The reasons for the failure are clearly explained. The Labour government either failed to understand or totally ignored the effects of a failure to raise tax thresholds in a period of rapid inflation. The Prices and Incomes Board based approvals of wage increases on improvements in productivity, making it difficult for the poorest to improve their relative position since many had been working to full capacity for a long time. Most important of all the government failed to do more than tinker with a taxation and welfare system that was and is grossly inegalitarian in its effects. Methods of tax avoidance, the system of occupational pensions and the state insurance scheme – which in return for a highly regressive contribution provides benefits even lower than Beveridge subsistence standards – are all subject to devastating attack.
Kincaid’s fervour sometimes leads him to ignore evidence which does not quite fit his line of argument but the points made are usually supported by reference to the available research.
The weakness of the book is its lack of organisation. It is full of interesting comments but the central theme is not always sustained coherently. Two examples will suffice. The chapter on Social Security and Labour Discipline appears to have been included because the author has something interesting to say about it rather than because it relates to the central theme of the book. There is an excellent discussion of the subsistence principle which is at the heart of the state insurance scheme and a good analysis of the inadequacy of the retail price index as an instrument for measuring changes in the living standards of the poor; but they are separated by over 100 pages and never linked together in an attempt to ascertain whether or not there has even been an absolute increase in the level of insurance benefits. It is a great pity that so much detailed analysis is dissipated by lack of attention to organisation.
Nevertheless the message of the book is inescapable. Piecemeal social reform is useless against a structure sustained by competitive inequality.
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Last updated on 2 March 2015