A History of Poverty in the UK

The way in which poverty is looked at, and dealt with, is a great factor in determining the shape and nature of the rest of society. It does not exist to the same extent as it has in the past, but it persists. It is no longer regarded with the same level of hostility as it has been in the past, but hostility persists.

The absolute poverty we see in developing countries, that is, individuals living off less than $2 per day, does not exist in the UK. Relative poverty however, does exist. It is currently defined as 60% of the median income, or around £260 pounds per week. This definition leaves us with a staggering 13 million people, half of which are in work. Perhaps more alarmingly one in six children, 2.3 million, live in poverty (definitions become more complex at this point due to equitizing family sizes and recent government revisions). Figures are similar among pensioners; one in six, or about 1.6 million, live in poverty.

Public attitudes towards poverty are, as expected, varied. One image is that of ‘skivers’ living off handouts, this is certainly not a realistic picture. Upbringing, opportunities and luck are far greater determinants of where one will end up than a magical middle-class ‘determination’ above and beyond the rest of society. There is a second commonly held view, often associated with the far left, the poor themselves, and, naturally, Russell Brand. It is a view that the poor are heroes, neglected and exploited by society, and that greed and selfishness are traits unique to the top 1%. This also does not paint a fair picture.

 

Before the turn of the 20th century it was certainly the first view that prevailed. Poverty was inevitable and the fault of the poor themselves. Adam Smith, in his ‘Wealth of Nations’ (1776) suggested a sort of grim economic rationing device of labour; as populations increase there is more competition among workers, lowering wages, this leads to starvation, which returns population to its natural level. Bearing resemblance, Thomas Malthus’ book ‘An Essay on the Principle of Population’ (1798) predicted a catastrophic collapse of society as food supply (growing linearly) fell below population (growing exponentially). This was certainly a false prediction in the long run, but held true to a degree when looking at a micro level; families with large numbers of children remained trapped in poverty. The pioneering scientist and statistician, Francis Galton’s contributions were equally dark. A specialist in the breeding of basset hounds, in his book ‘Hereditary Genius’ (1869) he transferred his ideas to the urban poor, suggesting that they were genetically inferior; creating a statistical bell curve of ‘civic worth’ – quantifying the supposed link between genetics and traits such as idleness and criminality.

During the 19th century there was also legislation passed that was ‘anti-poor’. Firstly the ‘Corn Laws’ (1815-1846), introduced by conservative land owners, imposed tariffs on cheap European grain. There were to be no grain imports until prices reached 80 shillings per quarter (£1 per kilogram in today’s prices), this lower bound was so high it were not reached once during the tariff’s lifetime. These laws raised corn prices – reducing rural poverty, but increasing urban poverty. The ‘Poor Law Commission Report’ and ‘Poor Laws’ that followed in 1834 further reduced living standards of the urban poor. Firstly, they reinforced the idea that poverty was the fault of individuals, secondly, they legislated to remove any shed of dignity from those in workhouses by worsening conditions – to disincentivise idleness.

While there was very little formal economic analysis into the scale of poverty in the UK until the early 20th century, there is enough evidence to paint a bleak picture. Dickens’ book ‘Oliver Twist’ give us an insight into the lives of the over 5,000 street children in London (Viscount Palmerston’s ‘Criminal Statistics’ of 1861, likely a gross underestimate). Likewise the famous etching by Gustave Dore, shown below, gives an idea of the slum like conditions that faced property owners.

Gustave Dove Etching

The 19th century was also a time for reform. The Factory Act of 1833 was a great step forwards with regards to worker’s rights, particularly for children – a maximum of 8 hours a day for 9-13 year olds, 12 hours a day for 13-18 year olds. The Representation of the People Act (1867) extended the right to vote to all male heads of household (1 million increased to 2 million, out of 7 million adult males at the time). Marx’s ‘Communist Manifesto’ (1848) looked at poverty in a different way, and changed the way the working classes looked at themselves. It suggested that it was the fault of ruling class oppression that workers were poor, specifically the gap between the value of labour workers put in and their wages. This lead to the first socialist party in the UK, the ‘Social Democratic Federation’ in 1882 – concerned solely with protecting the rights of the poorest. The First detailed and reliable account into the living conditions of the urban poor was published in 1901 ‘Poverty, A Study of Town Life’ by the chocolatier and philanthropist Joseph Rowntree. Investigators reported on over 11,000 families from cities across the UK and its conclusions were glum. 28% of the population of York did not have enough food, two thirds of which were either women deserted by men, or too old or ill to work. This book was not ignored by the ruling classes, Lloyd George would wave it at meetings and Churchill told an audience ‘it made my hair stand on end’.

 

The turn of the 20th century also saw public opinion shift, and legislation to match. The ‘People’s Budget’ was not passed without opposition, but it was passed. In 1909 Lloyd George proposed a radical expansion of government taxation in order to ‘wage implacable warfare against poverty and squalidness’. The labour party was also beginning to take shape in the form we know it today, with the ‘labour representation committee’ winning 29 seats in 1906, then, 42 in 1910. These large political steps, followed by the horrors of the First World War created a society, not wholly, but beginning to be, geared towards the advance of all people.

The interwar period was devastated the living standards of the poor, despite increasing government intervention. Unemployment remained above 1 million from 1920-1939, reaching a peak of 23% in 1920. This downturn was matched by ever strengthening pushes for worker’s rights. Firstly the general strike of 1926, some 1.7 million workers, in transport, mining and heavy industry, went out – in part due to their pay falling from £6 to £3.90 in the space of 7 years. This strike was largely ineffective despite its size due to excellent planning from the government – drafting in the middle class to fill in essential jobs. It could be said that this brief excursion into manual labour brought about increased understanding of the lives of the poor. A second push for worker’s rights was the displacement of the Liberals by The Labour Party. While the Liberals, notably under Asquith and Lloyd George from 1908-1922, could be seen as the party for the workers, it was never the party of the workers. The labour party certainly was, its first MP in 1982 – Keir Hardie – worked ten hours a day in the mines from the age of ten, its first cabinet minister – Arthur Henderson – was an iron moulder from Newcastle, its first Prime Minister – Ramsey MacDonald – grew up on a farm and spent a period of time unemployed in London.

The Second World War had as great an effect as the first. The first majority Labour Governments (1945-1950, 1950-1951) under Attlee implemented the revolutionary polices outlined in the ‘Beveridge Report’ of 1942 (published by the economist and later Liberal MP, William Beveridge). The report firstly laid out the five ‘Giant Evils’ of society – squalor, ignorance, want, idleness, and disease – then set out a plan to challenge them. Its impact was not to be underestimated – It sold 100,000 copies in a month and was even dropped by Lancaster bombers over occupied Europe. Some of the most influential legislation in British history stemmed from this report; The Butler Act (1944) created a free, three-tier, school system, The national Insurance Act (1946) brought about weekly contributions and a range of benefits schemes, and The National Health Service Act (1946) set about the creation of the NHS by 1948.

Interestingly, with regards to inequality, the immediate aftermath of war was better than before. Rationing (bread was rationed until 1948) distributed food more equally than ever previously. However the harsh winter of 1947 decimated the living standards of the poor, coal pits froze over causing factory closures. This forced 2.5 million people out of work, caused food shortages and energy shortages that forced limits on the use of electric heaters.

The golden age of capitalism began in the early 50s with the election of the conservatives, and the ‘post-war consensus’, both parties generally agreed on a program of Keynesian economics and nationalised industry. Average real wages increased by 40% from 1950-1965, child poverty remained below 15% until 1979 and unemployment averaged around 2% in the 50s and 60s – reaching a peak of 5.5% in 1980.

The ‘Golden Age of Capitalism’ ended with the ‘Winter of Discontent’ and election of Thatcher in 1979. The change was caused by the collapse of the manufacturing sector – primarily affecting poorer workers – and exacerbated by a radical government programme. Rising inflation brought an end to the Keynesian economics of the 50s and 60s, the 1979 budget cut the top tax rate from 83% to 60%, funded by a shrinking of the welfare state. The 1980 budget went further – resulting in real wages falling 16% and unemployment rising 800,000 in the second half of the year. Unemployment reached 3 million in 1981, 60% among blacks and especially bad in Manchester and Liverpool after government factory closures – this was the result of what was seen as an attack on the poor by the government and culminated in the Brixton Riots, 200 police were injured. It was not only the right-wing government that was failing to protect the poor, the 80s were a low point for the Labour party. Their radical left-wing manifesto in 1983 dubbed ‘the longest suicide note in history’ brought their worst election result since the 30s.

There remains debate as to whether Thatcherite economics were a systematic attack on the poor, or necessary medicine for an ailing economy, however it left a mark on the poor for decades to come. Child poverty rates were stable at around 14% throughout the 60s and 70s, before rising to a peak of 33% in the early 90s. Likewise working-age adults’ poverty rates rose from about 6% to a peak of 17% over the 18 years of conservative government. This great shift in policy was brought about largely through a change in the economic consensus, rather than social change. It was the oil crisis and rise of monetarism as a school of economics more than a change in attitudes.

There is also debate as to the degree with which this changed since the arrival of Blair in 1997. Absolute poverty before housing costs has fallen from 28% to 18% from 1997 to 2005, however relative poverty remained roughly constant just below 20% over the period. While Blair’s government had the largest Labour majority, neither its rhetoric nor policies stuck closely to the party roots – protecting the least well off in society. In some respects it did; the introduction of a national minimum wage and an expansion of in work benefits, though critics argue he had moved from true ‘welfare’ to ‘workfare’.

The history of poverty in the UK shows a clear shift from a demonising of the poor to, at least to some degree, a ‘fact based’ understanding of the situation of the poor. This change came about from; great individual’s work, historical events and – perhaps most importantly – economic development. As incomes increased, those in poverty have been increasingly able to live in a way that resembles the rest of society, encouraging further social and economic change.

Contributed by Michael Tallent, Editor in Chief

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