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Last Updated: Tuesday, 26 July 2005, 13:20 GMT 14:20 UK
The changing face of poverty
By Julian Knight
BBC News personal finance reporter

Children in rags
The nature of poverty has evolved during the past century

What image does the word poverty bring to your mind?

An emblematic image from the third world perhaps? An African famine or children kicking a makeshift football around the streets of a South American shanty town.

Alternatively, you may think of Britain's Victorian past, either through the photographs of the time or the dramas of today; hungry street urchins in rags or farm hands undertaking back breaking work at the crack of dawn.

But according to the people who study these things, poverty is all around - commuters on the bus, the colleague sitting opposite you at work or even the family that own the home next door.

By 1950 poverty, as defined by a basket of basic goods, had virtually disappeared
Professor John Hills, London School of Economics

The widely accepted definition of poverty is having an income which is less than 60% of the national average (excluding the wealthiest members of society). On this measure, the proportion of the UK population defined as in poverty is roughly one in five.

And this roughly one in five figure has remained stubbornly high through both Conservative and Labour governments.

In fact, wind the clock back and the percentage of people in poverty has fallen by little over 10% since the first great UK poverty surveys were carried out at the end of the nineteenth century.

But no one in their right mind would suggest that one fifth of the population in modern Britain are as steeped in poverty as their Victorian ancestors.

Essentially, how poverty is measured has evolved. The social scientists have being busy moving the goalposts.

Victorian haute cuisine

When Seebohm Rowntree, member of the famous confectionery family, studied the conditions of the working class in York at the end of the nineteenth century, he took a simplistic approach.

"He decided upon a shopping basket of food, housing and some items of clothing. These were considered the basics of life.

How is it that nearly one in five Britons live in poverty?

"Anyone who could not afford this basket of goods was deemed to be in poverty," Professor Jonathan Bradshaw of the University of York told BBC News.

Rowntree's basket was identical to the rations given to the poor in the local workhouse and contained such delicacies as cheese and dumpling, hardly haute cuisine.

The idea was to give the lie to the Victorian view that poverty was a hallmark of a wasteful life, where being poor equated to being sinful.

Rowntree showed that people were poor because they simply did not earn enough at work or were unable to find work, due to illness, injury or the cold economic winds of the Victorian free market.

It wasn't long before politicians and intellectuals made the connection that poverty could be alleviated by increasing employment, raising wages and providing social and health services.

Ultimately, over the next half century, through two world wars and an economic depression, this led to the modern welfare state.

Happier times

The basket of goods approach was used until the midpoint of the twentieth century by early social scientists to measure poverty.

As late as the publication of the Beveridge report in 1942, recognised as a crucial event in the formation of the UK's welfare state, the basket was still the measure of choice.

But as the UK grew wealthier, soon everyone could afford a basic basket of goods.

"By 1950 poverty, as defined by a basket of basic goods, had virtually disappeared. Employment - the lack of which had led to a rise in poverty in the 1930s - had returned and the welfare state was having a major impact," Professor John Hills of the London School of Economics, told BBC News.

Poverty rediscovered

But instead of declaring the beast of poverty slain, academics looked to new data being collected by the government.

For the first time the UK population could be divided by income, and inequalities in UK wealth were laid bare.

The Jarrow march for jobs
Before the war, unemployment was seen as the key to poverty

This led to what some social scientists rather glibly referred to as the "rediscovery" of UK poverty.

From the 1960s onwards, the income figures revealed the existence of an underclass - the just under one in five who had to live on incomes about half the average.

This underclass, although far better off than their Victorian forbears, were deemed to be in poverty relative to the rest of society.

This relativist approach to measuring poverty, in one form or another, has held sway ever since.

The make-up of this underclass shifted over time. In the 1970s and 1980s pensioners and lone parents were dominant, but by the 1990s families with children made up the largest group.

Some ways of measuring poverty can be misleading, however.

For example, according to the goverment's Households Below Average Incomes Survey, more than half the people defined as in poverty are homeowners but many of these are pensioners who are asset rich but income poor.

Can an elderly person living on 60% of average income but with a very valuable property and no mortgage be considered poor?

A child on some swings

"Income figures are very important but they are not the be all and end all. Lack of opportunity is the buzzword in defining poverty today," David Hirsch, researcher at the Joseph Rowntree Foundation told BBC News.

According to Mr Hirsch some of the key tell-tale signs of poverty in modern Britain include:

  • Not having a High Street bank account
  • Having to spend more than 10% of income on energy bills
  • Poor access to transport, employment opportunities or healthy food

In addition, how people feel that they compare to their peers is also a key way of defining poverty.

Back to basics

Harking back to Seebohm Rowntree's original research, the Joseph Rowntree Foundation in the 1980s and then in 2000 carried out a survey to find out what people saw as life's necessities and what percentage of the population said that they could not afford individual necessities.

The results revealed that 14% of people did not possess more than one pair of shoes and 25% were unable to save 10 a month for their retirement.

Roughly 20% of the population suffer deprivation, while a hardcore of two to three million are in deep poverty
David Hirsch, Joseph Rowntree Foundation

According to the social scientists, it is even possible for someone to have a mobile phone or television and live in poverty.

"Manufactured goods are now very cheap but sending a child on a school trip is expensive."

"Services and not possessions are the big expense for people and access to them separates the haves from the have nots.

In particular, Mr Hirsch points to the negative impact on people's lives of not having a current account at the bank.

On an everyday level these 'bankless' people may have to rely on expensive High Street cheque cashing services or, worse still, borrow money from doorstep lenders at a rate of interest in excess of 100%.

Lack of access to a bank account often means having to use pre-payment meters for gas and electricity.

Last year, the National Audit Office (NAO) found that consumers paying by pre-payment meter paid 63 a year more for their energy than people using monthly direct debit.

As for poor transport links, these can harm employment prospects and limit access to healthy food.

A pawnbroker
Many poorer people end up taking out expensive short term loans

Feral to obese

Increasingly, the link is being made between poverty and obesity as high fat, high sugar food is cheaper and more readily available than healthier alternatives.

The hallmark of poverty today isn't the gaunt feral look, so prevalent in sepia-tinged Victorian photographs, but type two diabetes and an expanding waistline.

"We have come a long way in terms of measuring poverty. But whichever way it is measured, roughly 20% of the population suffer deprivation, while a hardcore of two to three million are in deep poverty," Mr Hirsch said.

And the plight of these two to three million would be recognisable to Seebohm Rowntree.

"Many of those people in deep poverty will go without food today so that that their children can eat, in some respects not that much has changed in the past 100 years," Mr Hirsch said.

Rowntree's basic diet 1899
Sunday to Tuesday shown (Diet from Wednesday to Saturday no different)
Day Breakfast Dinner Supper
Sunday Bread 8oz Bacon 3oz Bread 8oz
Margarine 1/2 oz Pease pudding 12oz Margarine 1/2oz
Tea Cocoa
Monday Bread 8oz Potatoes 24oz Bread 8oz
Porridge Bread 2oz Vegetable broth
Cheese 2oz Cheese 2oz
Tuesday Porridge Vegetable broth Bread 4oz
Milk Bread 4oz Porridge
Cheese 2oz
Dumplings 8oz
Source: Joseph Rowntree Foundation

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