Poverty Reduction

Lord Desai Excerpts

Thursday 22nd February 2024 Lords Chamber

[Lord Desai (CB)]

My Lords, as the last speaker from the Back Benches, I will concentrate very much on my work on poverty. I was born in a poor country and have worked professionally as an economist on poverty for much of my career; I will not go into the details of my writing.

There is obviously a very complicated set of conditions, circumstances and consequences of poverty. Poverty is a global problem. A sociology scholar, Peter Townsend, wrote a very good book, Poverty in the United Kingdom, a fat book published by Penguin in the 1970s. He had an interesting idea. He conducted a survey asking people what sort of foods they ate: “Did you have roast beef for Sunday lunch”, things like that. People asked why he was doing it. He said, “You’re poor if you don’t feel part of the community where you live”. Something about having normal foods and things like that is very important. He conducted a very large survey with more than 2,000 observations and tried to establish that when you think about poverty, you think of people and whether they feel part of the community. It was very interesting.

A famous economist, Amartya Sen, has done a lot of work on poverty. He said, “You’re poor if you cannot develop all the potentialities that you have”. For example, it is not good enough to say that we all need a certain kind of income. If I am disabled or cannot walk, I need extra facilities and extra income to be able to do what you do. We have to think of the variety of circumstances that prevent people doing what they should be able to do.

I am going to say something fairly controversial. There is one answer. People do not like it but I have to say it. It is the only satisfactory answer that I know, and it is to have a basic income or a citizen’s income. I have been advocating that, in one way or another, for 30 or 40 years now. The idea is that just as we all have the right to vote, we should have a right to income. Some areas, such as Alaska, and some countries have implemented a basic income plan. The idea is that every adult who is eligible to vote should have a certain basic weekly or monthly income. Of course, this is a very controversial issue. People say, “Why should you pay people for not working? If they get money for not working, they will never work again and that is terrible”.

As the right reverend Prelate said, a lot of us do unpaid work, especially women. One way to think of poverty is that, at various stages of their lives, women have circumstances that force them into poverty, or at least into low-income jobs. Suppose we implement a policy I proposed in my recent book, The Poverty of Political Economy. We pay every woman who is on the electoral register £100 per weekend. I am being moderate because I do not want to frighten the horses too much. That is £5,000 per year. Let us say that there are 30 million women voters. I am making all this up, but I do not think it is impossible to finance that sort of thing. If we do that, one thing is quite certain regarding things such as child poverty, lack of heating in the house or lack of food. If the woman in the family gets an income supplement, she is going to spend it on the family as well as herself, on things such as household expenditure and heating. This has been shown in some countries that have tried it.

I know people say that income is not enough, but if you want a single policy, let us try it and let us make it universal. Rather than saying, “Let me first identify who is poor and give it only to them”, give it to everybody. Then, if you want to allow the people who are rich not to have it, they can either give it up, use it as part of a tax payment or whatever. Make it completely universal.

If you make it universal, many of the problems that families have from poverty would be tackled. Obviously, there will be problems of what to do for poor single men or elderly people, but we have pensions for the elderly. If we find that there are people who would not be helped because they are not in any of these categories, that is all right.

I am not the only person who advocates this. James Meade, a Nobel Prize-winning economist at Cambridge, was another, as was a man whose name I am trying to remember—the FT’s economics correspondent, whose first name was Sam—

[Lord Lamont of Lerwick (Con)]

Brittan.

[Lord Desai (CB)]

Yes, it was Sam Brittan. Sam Brittan, James Meade and I were the three people advocating a basic income back in the 1960s and 1970s. This is not a new idea; there is a whole volume called the Palgrave International Handbook of Basic Income, in which I have a contribution. The whole idea of a basic income is the most convincing way I have seen to tackle poverty.

There was a social justice commission appointed by John Smith, when he was leader of the Labour Party. I submitted evidence to it, but it came to nothing because he passed away.

I do not have any more time, but the whole idea of a basic income, paid to women on the electoral register, is something that we should explore seriously to see whether it works.

Universal Credit

Lord Desai Excerpts

Thursday 9th September 2021 Lords Chamber

[Lord Desai (Non-Afl)]

My Lords, it is almost a universal law of poverty studies—I used to do that 40 years ago—that any level of payment at which the Government of the day fix as being necessary is 15% short of what is really needed. Peter Townsend, a great economist carried out a study way back in the 1970s in which he was able to show that what we then had by way of supplementary benefits was 15% to 20% short.

When the £20 extra was given in the pandemic, the Government just fixed the existing allowance to what it should always have been. One of the things that happens when you puts your name down to speak is that people write letters. The actors’ union, Equity, has written to me. Actors are peculiar people because even in normal circumstances they have a precarious career. They never know when they will get a role, especially in the pandemic because of the restrictions on large gatherings. Even now, when the theatre and film industries are reviving, the situation is always peculiar. Even when one is employed, one is insecure and inadequately compensated. For them, saying that the economy has recovered and wages are rising is not good enough. There is a large class of such jobs; even when one has a job, one is not actually secure.

For those people, £20 is a lot of money. Two-thirds of actors are in the position whereby under universal credit they are insecure in terms of having an adequate amount of money. I therefore urge the Government to extend their hand—I know things are hard—and perhaps do what the noble Baroness, Lady Fookes, said. If they have to do it, please do it slowly. Break it down into stages and try to see from the data where it will hurt most and do something. Please do not do it suddenly. The best of all possible worlds would be to make the extra £20 permanent.

Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2021

Lord Desai Excerpts

Wednesday 10th February 2021 Grand Committee

[Lord Desai (Non-Afl)]

My Lords, I declare an interest as the chairman of a company set up by a private company to pay compensation for asbestos-related problems. This is all very familiar territory. I will make only a small point because everybody else has said some good stuff.

I wonder how this compensation compares to legal decisions against private companies sued for asbestosis. I have been doing this compensation thing for about 15 years. It was on my suggestion that the company was set up by a big construction company that made asbestos. I have been following the numbers. At some stage, it might be useful to look at the legal decisions made by the courts—noble Lords will know that there have been changes to Scottish decisions and so on—which would enlighten us in revising our regulations. I just want to put that suggestion forward. If the Minister wants, I can get the data from our company, which was set up under Law Debenture. That is my suggestion.

Universal Credit

Lord Desai Excerpts

Tuesday 2nd June 2020 Lords Chamber

[Baroness Stedman-Scott]

I am happy to take that point back to the department and will write to the noble Baroness in due course.

[Lord Desai (Lab)]

Given that the Chancellor has shown flexibility in designing his deal for the unemployed, will the Government consider suspending, at least temporarily, all the cuts which people on universal credit have had to suffer and which, in any case, should have been removed? Will they suspend them for, say, another 18 months?

[Baroness Stedman-Scott]

I do not wish to be negative in any way but I have no knowledge of the Government considering that. Therefore, I am unable to say more than I have already said.

Poverty

Lord Desai Excerpts

Thursday 14th July 2016 Lords Chamber

[Lord Desai (Lab)]

My Lords, it is a privilege and an honour to follow the noble Baroness, who has done so much for digital literacy in this country. I entirely agree with her last suggestion that people in the charity field should improve their digital skills. The Charity Commission should also improve its website. I have been there and it is a nightmare.

The noble Lord, Lord Bird, started by saying that poverty is a complex issue. He has done a great deal about it; I have done nothing similar but I did a great deal of measuring of poverty when I was an active economist.

It is striking that when we started thinking about poverty, we thought first in terms of nutrition—do people have enough money to buy enough food for subsistence?—and all the measurements started in terms of calories. When Charles Booth was wandering around the streets of east London, he spotted poverty when he saw children playing truant from school. He put his emphasis on what it was that made those children truant. He was looking at a new-generation problem, and it turned out that their parents did not have enough money to pay the fees for primary school education because, despite England being a rich country in those halcyon Victorian days, we did not have free primary education.

Starting from there, what we have heard in the debate is that poverty is a complex issue because lots of different things are mixed up with it. At bottom, it is about a lack of spendable income. Money in your hand can solve a lot of problems. Around 40 years ago I was doing some work in connection with Peter Townsend’s pioneering efforts to measure poverty. He pointed out that national insurance, or whatever income supplement there was at the time, was inadequate and should have been 15% higher. I think that a universal law for measuring poverty is that the poverty level is always 15% higher than whatever the Government pay. We know that Governments are always slightly meaner than they need to be.

We also have problems around aspirations, problems around disability and the problems faced by carers, whose lives are blighted because they do not have enough money to have any kind of life outside caring. We need to view poverty as a multidimensional issue which Professor Amartya Sen—as many people will be aware—in the course of his lifelong work explained in terms of the notion of capabilities. We would like people to be capable of many things throughout their life, whether that is good health, activity, the pursuit of knowledge or the pursuit of happiness, whatever it might be. In a sense, the poor are those who do not achieve many of the capabilities that should be available to them.

We have spent too much time using a false measurement of poverty, which was established by the European Union; that is, 60% of median income. I think that is the silliest thing I have seen in my life. I know of no income distribution in any country where the distribution of income is such that no one is under 60% of median income. There always will be people living at that level. It depends on how high the median income is. Now that we have Brexited, I hope that one of the few things the Government could do is set up a proper measurement of poverty that really accounts for how many poor people there are, how many poor children, and how many different ways people are poor, and whether it due to dependence, disability, a lack of digital skills, inadequate housing and so on.

We must recognise that this is a complex problem that requires a suitably rational allocation of money. Of course money is not plentiful; it is always scarce, so we have to be careful about how it is allocated. We must also look beyond current poverty to the lifetime chances of people in poverty. The investment required in children’s health and education is possibly one of the highest-paying that could be made in removing poverty. Tackling poverty is a complex and multifaceted task. I am sure that the Minister will tell us in his reply how universal credit will take care of most problems. I am sure that it will, but I repeat my fundamental law: add 15% to whatever you were going to give in universal credit, and your problems might then be solved.

Let me say lastly that when we look at poverty in the UK, we must not forget that the real poverty is elsewhere. We must not slacken our efforts to fight poverty around the world as well.