:
Good morning. I'll call the meeting to order.
Pursuant to Standing Order 108(2), we will resume our study of the federal contribution to reducing poverty in Canada.
Can our witnesses hear us in the U.K.?
A voice: Yes, I can hear you from London.
A voice: I can hear you from Bristol.
The Vice-Chair (Mr. Michael Savage): Thanks. That's great. We very much appreciate the fact that you've taken time to talk with us today.
This is, as you know, the human resources, social development, and status of persons with disabilities committee of the House of Commons of the Canadian Parliament, and we are doing a study on the federal contribution to reducing poverty in Canada.
We heard last week from some colleagues in Ireland about the work they are doing in this area, and we're delighted that you are here with us today.
We're going to ask you each to perhaps give us about ten minutes, and then we will have questions. The way it works here is that we have the four parties of Canada—the governing Conservatives, the opposition Liberals, the Bloc Québécois, and the NDP—who will take turns asking you questions after you have given us your presentation.
I want to thank you both; we received a copy of some of the highlights of your presentation. Canada is proudly a dual-linguistic nation, and we can't pass these out to members until we have them translated. I would ask you, if you would, to speak slowly, because we will be translating your comments into both official languages.
With that, I want to thank you again for coming.
Perhaps we'll start with Professor David Gordon, director of the Townsend Centre for International Poverty Research at the School of Policy Studies of the University of Bristol.
Professor Gordon, you'll have ten minutes, please.
I'd like to thank you for giving me this opportunity to talk to the Parliament of Canada and this very important committee in its important inquiry.
I had hoped to be able to show you slides, but unfortunately, the powerpoint system where I am at the moment is not working. You have a copy in English available, and I'm sorry I didn't have time to get them translated into French.
When talking about a U.K. strategy, it's important to realize that a lot of the details are devolved to the four countries that make up the United Kingdom: England, Wales, Scotland, and Northern Ireland. Peter and I are currently on the advisory committee for the National Assembly for Wales, which is designed to help implement the eradication of child poverty by 2020. It is, however, a U.K. government policy, which is agreed to by all four components of the U.K., to attempt to eradicate child poverty by 2020.
The main plank the U.K. government has pursued to do this has been a policy of full employment via active labour market interventions, by trying to get people into work they have not been in before. Attached to this is a policy of trying to make work pay through a whole tranche of mechanisms, such as a minimum wage, tax credits, a form of negative income tax, child care vouchers, and training and education of people who need it in order to be able to get paid work.
These policies have been pursued very rigorously since about 2000. By about 2005-2006, they succeeded in reducing child poverty as measured by low income by about a quarter, which was quite an achievement, given the high levels of children in poverty we had in 1999.
You'll see on one of the slides I've given you that in the 1980s and early 1990s, child poverty as measured by low income increased threefold. Since about 2000, it has gone back by about a quarter. However, recently, in the past year, those policies have stalled. In fact, by some measures child poverty has been increasing for the past year, and maybe in the previous year as well.
It is unlikely, given the academic research we have in this area, that pursuing full employment policies alone will be sufficient to eradicate child poverty forever. There will always be some people who need to receive welfare benefits because they cannot work because of caring responsibilities for children and adults.
In order for the government to make its target, it needs to do more than it is currently doing to increase the levels of incomes of families who for various reasons cannot work. The simulation models that have been done by some of my colleagues at the University of Cambridge and the London School of Economics and Political Science have shown that full employment and active labour market intervention policies alone would at best reduce child poverty by about half. To get the other half, you would need to do something about the welfare benefits.
The U.K. government had a wide-ranging consultation a few years ago about how child poverty should be measured. Much of the debate and a lot of meeting of targets depends crucially on the way you measure these things. After this extensive consultation, they came up with a three-tiered approach. There are now officially three measures of child poverty. The government argues that it will know it's meeting its targets if all these measures are going in the same direction. They all need to be declining, not only one or two.
The first one is an EU relative income measure, which is children and families below 60% of the median income across all 27 member states of the European Union.
The second measure is a fixed measure that takes the level of income that would have been needed in the mid-nineties and upgrades it only for inflation rather than for changes to income in society as a whole.
The third measure is one that comes out of academic research by my colleagues Peter Townsend, Joanna Mack, Stewart Lansley, and others, and is very similar in concept to that measure used in Ireland--consistent poverty. It is low income and multiple deprivation combined. So you measure both the resources that people and families have and also the outcome of low resources in terms of material deprivation.
All those measures need to be declining for the government's policies to be effective, and they are targets for the first and the third measure.
There are also European Union-level measures of poverty. The first is the one I talked about, the 60% of median, and the second is the number of children in households where no one is working--workless households.
It's important to understand that this is just the broad picture of how it is being measured in terms of income poverty and low resources. But the U.K. government also has other policies, which I was told you are interested in, to do with fuel poverty. These use slightly different definitions, and unfortunately the measures of income poverty used for the targets for eradicating child poverty and the measures of income used in fuel poverty are not currently aligned. Basically, the idea of fuel poverty is that households should not have to spend a disproportionate amount of their income in order to adequately heat their houses.
This is important in a country like the U.K., and also I guess in a country like Canada, where heating your house, particularly in winter, can have long-term health consequences, and short-term health consequences if it's not adequately done. And it's particularly important at the moment with the rapid increase in fuel prices.
The government's main policy for eradicating fuel poverty, which it has a statutory obligation to do--and is very likely not going to meet because of the recent rises--has been to deregulate the market in an attempt to reduce the cost of electricity and gas. That was effective in the past but is not effective at the moment. But it was also to identify a vulnerable group of population--the elderly people receiving welfare benefits--and to then provide free energy efficiency measures to improve the energy efficiency of their houses, i.e., lagging the lofts, providing new boilers, and improving central heating systems.
The government has also, every winter, given an increasing amount of money as a one-off payment to pensioners in order to help them meet the cost of their fuel bill over winter. That's equivalent to about £200 U.K., depending on various criteria.
So there are these central government planks, but the details of how the anti-poverty policy and to a greater degree social exclusion and social inclusion policy are implemented with regard to service delivery and health, education, and housing depends crucially on which country you live in within the U.K. So like Canada's federal system and provincial system, we have a U.K. government system and then a lot of responsibilities devolved to the individual country level.
The details of how this has been done vary from country to country, and I'll be happy to answer questions about the individual details. But that's just to give you a kind of overview.
Thank you very much.
I will just say a little bit about what the New Policy Institute is, since we're not within academia. We are an independent think-tank that has been around for more than ten years now. Over that time we have worked a lot, not exclusively, on poverty and social exclusion, usually funded in this work by the Joseph Rowntree Foundation.
In the first instance, our role here has been monitoring progress, using almost exclusively the official data sets, and I think this has meant we've probably done two useful things. One thing we have done slightly is to contribute to keeping the public discourse honest, and the other thing we have been able to do through that is to shape the way in which certain issues are seen, sometimes in advance of them becoming mainstream.
One thing I would particularly mention, because I think it's central—I imagine it's central to you too—is the point that while most people in work are not in poverty, in the U.K. at least half the people in poverty belong to working households. So the simple story that work is the route out of poverty is not in accordance with the facts.
Let me briefly divide my contribution into two parts. Firstly, going over some of the history, I don't in any way disagree with anything that Professor Gordon has said, though I perhaps might be colouring it slightly differently. I then want to make one or two remarks about where I think the U.K. is at with its anti-poverty policy that I hope may be relevant to you too.
As David said, really the first significant act in this move to deal with poverty took place in about 1999. There was an explicit focus on children and an implicit focus on pensioners. Since children live with adults, the adults who live with children also in some sense were both the object of the policy and also the beneficiaries. The great group that was left out and remains left out is those working-age adults without dependent children, and we would say that is important.
As David told you, really for the first five or six years of the government's policy, child poverty measured on the low-income measure was falling steadily, perhaps not quite as quickly as was wanted, but it was certainly coming down. I think at that stage the target was expressed in terms of a desire to remove a million children—that's about a quarter of the children in poverty—from poverty by 2004-05.
In the best year, which was 2004-05, I think something like 800,000 children had been removed from poverty, moved above that income poverty line. That was short of the target but was nevertheless a substantial achievement. We now have two more years' worth of data, and I think they show a very different story. It's not always clear that these things are statistically significant, but the headline figure is that since then, child poverty has slipped back up again by about 300,000. That means, compared with the objective two years ago of reducing child poverty by a million, we have actually now reduced it by only 500,000. We are only halfway to a target of two or three years ago.
The way we sum that up, and I think it is very important to get both parts in, is that this was a policy that clearly was working. The polices that have been pursued have not in any sense been a failure. But it's a policy that, having worked, has now stalled. Perhaps it's exhausted. It certainly seems to have very little momentum. Why is this, and where does this leave the U.K.?
David also very clearly explained that this policy, of course, is heavily dependent upon increasing employment, particularly among lone parents, where there are very high levels of worklessness in the U.K., and that was deemed to be a significant concern.
In the early years of the Labour government, post-1997, the employment rate was rising. It rose by about 1% in three years, which is quite significant, I think. Since then, it has struggled to rise very much further. I think that is part of the difficulty of a strategy that emphasizes work so much.
Nevertheless, I think what you can see there--an employment policy, income supplements to people in work through tax credits--was a policy wherein the instruments were well matched to the target. I think the difficulty with it, however, certainly as far as the tax credits and the use of the tax and benefit system is concerned, is that it was not addressing the deep causes, if you like, of poverty, whether that be in the labour market, whether it be to do with the levels of human capital, qualifications, and so forth, or whether it be to do with discrimination.
It also singularly failed to recognize, never mind address, this problem of in-work poverty. As I say, it is now the case that half the children in poverty belong to working families. Almost all the working families are paying tax. There are all sorts of areas that have not perhaps been addressed that might have been if in-work poverty had been recognized as a problem in its own right.
So where have we reached? I think the conclusion we draw is that the way the Labour government of Mr. Blair began its anti-poverty policy in the late 1990s was arguably the only way to begin, which was by focusing on children and by using very direct measures to try to boost incomes. It did work. It continued to work for several years, but it seems to have run out of steam. I think we've therefore reached the point at which you can't assume that these direct measures, these direct income transfers from the state to individuals and families, can go on working forever, unless you address wider problems. They have always been part of the anti-poverty policy here, but I don't think they've been a coherent part of it. I don't think they've been integrated within it properly.
Our challenge now is to ask how many of these other things are intended and are supposed, exactly, to affect poverty. I think the going from now on will be much harder. It will be much harder to see evidence on a year-by-year basis. Nevertheless, it is almost certainly the case that you have to, in the end, engineer fairly deep changes in society if you want to end poverty. You can't eradicate it. Perhaps you can't even reduce it substantially while in some sense the rest of society carries on the way it has and the way it does.
I think there are very big challenges ahead. I think the fundamental distinction that now lies with other policies is whether you are going to have policies that are targeted at low-income households or other disadvantaged groups--you've had a number of those suggested to you--or whether you are going to try to do things that perhaps alter society as a whole. I noticed in your list the suggestion someone put to you of having universal child care. I think that falls into that category, and I think there could be an interesting discussion about that if it's something that is of interest to you.
Thank you.
:
Thank you both very much, Professor Gordon and Mr. Kenway, for being with us this morning as we continue to work to find answers to our role in government, in society, when it comes to dealing with poverty in our countries.
You talked about altering society as a whole. One of the goals from my perspective is to start at zero in making sure that our children are prepared right at the very beginning, so that they have exposure to the things that stimulate their young minds and flow right into our education system. We keep trying to deal with what we're having to deal with today, which is the working poor or those who, for many reasons, are never going to get beyond the numbers required, as you said earlier.
So given the fact we would have to have two approaches, one from zero on and the other trying to deal with the people who we're all trying to deal with today, at least we should have a long-term vision as to where we need to be going and where we're going to start. If we had started in 1999, making sure we were all investing in the right things at that time, maybe we wouldn't be dealing with the numbers we have today.
But turning to the specific instruments the government is using to try to eradicate poverty now, we're talking about child care, increased minimum wages, and guaranteed income. All of those are ideas. What should the government have done differently and what should it do differently now?
You've asked some very key questions there. The U.K. government's focus on child poverty was in part due to an ideological shift within the Labour Party from a socialist focus on equality of outcome based on need to one more concerned with equality of opportunity.
If you're interested in equality of opportunity, you have to invest heavily in children from year zero in order to try to level the playing field and increase the chances of social mobility. The government invested a large amount of money and is still investing a large amount of money into children from the very earliest ages. It made free nursery places available to four-year-olds in school. It introduced vouchers for children for nursery care under three for two and a half days a week and introduced a whole range of new benefits in order to try to raise the incomes of families with very young children.
This was based on good scientific research as well. The families who had the deepest poverty were those with the youngest children. This was in contrast to what the statistics showed at the time. They showed it was older children, but that was an artifact of those statistics. So the government responded to the idea that you need to start at zero, and maybe those policies will work in 10 to 20 years' time, but they are long-term policies.
There is also a crucial need to deal with the problems of today, and the government, as I said, tried to do that through active labour market intervention. It needed, really, to try also to raise the benefits that are available to families with children. Britain is half-way in the European league in the generosity of the tax and benefits system to families with children. Britain does not have as much redistribution across individuals' life forces as, say, the French system or the Swedish system, where money is taken from people when they're middle-aged and given to them when they're children or when they're pensioners, in terms of family benefit or pension benefit. In Sweden, 80% of the redistribution is like that, not from rich to poor. That is a very effective way of ending child poverty.
The system in the U.K. and Ireland is a much more means-tested one, where money is targeted at the poor, the pensioners, and children. It means it spends less, is able to spend less because it has more specific targeting. But if you want to eradicate child poverty forever, there's a limit to the effectiveness of means-testing.
The Vice-Chair (Mr. Michael Savage): Dr. Kenway.
It may very well be that in 20 years' time we'll look back and decide that the greatest contribution our government has made to fighting child poverty was the measures that it took, which David has just referred to, to help children from zero, as you were saying. I think our program assures staff at children's centres of the education for three- and four-year-olds. It might very well be that when you take the long view these little income supplements seem to have been the second order of importance.
However, let me draw your attention to another very important gap in what the U.K. government has done or not done. It has quite rightly looked at children from zero, but the group that has been ignored in practice and where there is no sign of any progress is late teenagers and young adults. To give you a specific example, we look particularly at measures to do with the number of 19-year-olds without what's called a level two qualification. In some sense for these purposes the precise level doesn't matter; the key point with this statistic is that about a quarter of 19-year-olds fail to reach that minimum level. That was the case a decade ago, and it is still the case.
The number of young adults who are out of work, the number of young adults who are in poverty, remains a real blot, if you like, and a gap in what's been done.
The point about those people is that when we first pledged to do something about child poverty these people were children. I don't think that's just a piece of empty rhetoric. It's very important, if we're going to say we're going to have a child poverty strategy, that we have a strategy that addresses the interests of all children, not just those at zero, even though they are very important, but all the way up.
I think the reason why we might have to wait a long time to see second-stage effects, if you like, from the government's strategy is precisely that it has not succeeded, possibly not even really tried, to come to grips with the oldest children, who then become the youngest workers. So that cycle of deprivation is in grave danger of being repeated, at least for the next generation, even if the stuff for very small children does something about it for the generation hence.
I would also like to thank Professor Gordon and Dr. Kenway for sharing their experience and expertise with us this morning. I find your experience very interesting and helpful, in the sense that the approach you take to fighting poverty is employment first. Create employment and make sure that people who are able to work have a job to go to.
My question is in two parts. First, I would like to know what causes the optimism that allows you to set the goal of eradicating poverty by 2020. I understand that the results obtained in the first five years are quite extraordinary. But, as you said yourselves, the point has come where you have reached a plateau, and, for some groups, such as single-parent families and the elderly, the figures are heading in the other direction. That is my first question.
Second, Mr. Gordon tells us that your experience is showing you that about 50% of people in poverty are going to stay poor if we do not change our approach completely, because that 50% is working. That is what I think you are saying.
I would like to know what steps you have taken to support the working poor. Are there government initiatives that require businesses to provide better working conditions, or, for those that cannot, to support them so that they can? How do you handle that?
I also understand—correct me if I am wrong—that all labour issues are matters for Parliament. Are the other three Parliaments, those in Scotland, Wales and Northern Ireland, committed to the same extent as the Parliament of the UK as such?
:
Thank you very much for those intelligent questions.
First, I want to deal with the late teens. The government has done much less for this group and for working-age adults than it has done for younger children and the elderly. To a certain extent, the ideology of the poor law still prevails, in that it is easier politically to consider the young and the old as deserving and maybe late teenagers and young people as undeserving, and therefore the government is much more cautious about investing more money in that group.
However, it has made some investment in improving training, particularly for the group it calls “NETE” in British terms--not in education training or employment. It has a minimum wage policy that is very important for this group, but unfortunately for the age group under 25 the minimum wage is less than it is for over 25, so again, there's a limit to the effectiveness of that policy.
One idea it is thinking of pursuing is to raise the school leaving age from 16 to 18, so there are not 16-year-olds or 17-year-olds who are not in school but not in jobs, and are not even in training. Those are the kinds of policies it's pursuing, but there is a whole range of policies under which they tend to have only limited investment compared with the policies for younger children.
One of the reasons the government is optimistic that it can eradicate child poverty is that if you look at the costs of eradicating child poverty in terms of the amount of income that would need to be transferred from people who aren't below the poverty income line to those who are below the low income line, it's a little less than 1% of gross national product.
The U.K. has a very large economy, so that means that relatively small income transfers in terms of the size of the economy would effectively eradicate child poverty, if you can pursue policies that allow these income transfers. That's not an insignificant amount, 1% of GNP, but nevertheless it is a feasible amount. It does not mean restructuring the whole of society as we know it.
The government's policies for the working poor, as Peter rightly points out, have not been as effective as the government hoped. Again, minimum wage is on tax credits that support people on low incomes. There have been problems with integrating the tax benefits systems. Tax authorities are used to taking money; they are not always effective, especially at first, at giving money back to people, so there has been a lot of confusion with those policies. They are working a bit better now, but more needs to be done.
The policies the government has pursued have been effective, but they haven't been effective enough, particularly for the working poor. There have been other trends in society, such as a declining family wage. In the 1950s, one person worked, usually the man, and could afford to support his family. Now you have a big working rich and working poor household divide, in which you have families where two people are working, and that tends to protect against poverty almost universally. But if only one person is working, particularly in a low-wage job, then that family falls beneath the poverty threshold. It may not be a long way beneath it, but nevertheless, even with the benefits available, they tend to fall below the poverty threshold.
There are policies in place that, if invested in more and if they were more effectively delivered, could deal with the problem of the working poor and still relieve those who have so much care and responsibility that it's not really feasible for both parents to go to work. It would not necessarily even be desirable from other policy objective points of view, and certainly not desirable from that family's point of view, for both adults to go to work. That problem the government hasn't really tackled yet.
:
The definition of fuel poverty is fairly non-contentious, in that families should not have to spend disproportionate amounts of their resources to adequately heat their homes. The contentious bit is how that is measured. It was done based on some work a very long time ago, in the 1970s, by an academic called Brenda Boardman. She identified that families who spent more than 10% of their income on fuel tended to also be income poor. That has been taken as the definition ever since, although it is reworked as better data comes forth.
However, the measurement isn't based on the actual amount people spend. It's based on how much they would need to spend to adequately heat their homes, given the energy efficiency of their homes and the average fuel prices in the area of the country in which they live. So it's quite a complex calculation. How well it works is a matter of some considerable debate.
It overlaps to a reasonable extent with the poor elderly in terms of income, but it has a much greater rural bias. So in city areas like London, where there are high housing costs, people often have high incomes in order to pay for their housing. But because that's not taken into account in the definition, they appear to not be fuel poor, whereas we know from objective social scientific measures that they often have difficulties heating their homes. So my personal belief is that the idea of fuel poverty is very important, particularly in a cold country.
The current way fuel poverty is measured in the U.K. has caused difficulties in both targeting those in greatest need and in the government meeting those targets. The policies the government is pursuing of identifying vulnerable populations and improving the energy efficiency of their homes is good in terms of also reducing carbon dioxide emissions from people's homes. But the amount of money invested in tackling fuel poverty has been woefully inadequate in trying to eradicate it. The government is not only not going to eradicate it; fuel poverty is likely to increase by 2010.
:
This time I'll have a go at it first; save David for a change.
I think it's very important that you look at not only what is counted officially as unemployment, even if you take the ILO measure. Unemployment has fallen substantially. However, the number of people who are economically inactive has fallen much more slowly; indeed, it's a much larger number. These are people who are basically lone parents or who are entitled to disability benefits but who nevertheless indicate that they would like to work.
The figures I have to hand are the opposite of your unemployment ones: they're the employment ones. And the employment rate rose from, I believe, just under 73% in 1997, when Mr. Blair's government came to office, to about 74% pretty quickly. Since then, in the remaining eight years, it's still never risen by more than a percent. It is fluctuating between 74% and 75%. I can't remember the number off the top of my head, but I can say comfortably that several million people have indicated that they would like to work.
So you have people who want to respond to the government strategy, but at some level, I think, you have to say that we just don't, at the moment, have the number of jobs that people want.
:
Perhaps I can also respond to that.
Unemployment has fallen tremendously since the early nineties, when it was over 3 million. It fell to half a million and it's now at about 800,000. That's using consistent definitions, and of course it depends on the definitions.
For all intents and purposes, the unemployment figures of 3% to 4% show full employment. But that only tells part of the story. There has been tremendous growth in the number of people working, and in many parts of the U.K. there are labour market shortages. Britain, like Ireland, has absorbed several million migrant workers from Poland and the former eastern European countries that are part of the European Union. I think in Ireland, one in ten people working now are from Poland or the Baltic States.
That really does tell part of the story, because there are many people who, although not officially unemployed, have become disillusioned. They're not unemployed; they're not seeking work. As well, there has been a tremendous growth in the number of people on sickness benefits, who possibly, if there were suitable jobs for them, would want to take those jobs up. Or at least that's what the government believes. However—
:
One of the central barriers to women going back into the labour force has been the gross inadequacy of affordable child care in the past. The government has pursued a number of policies to try to make child care more affordable, including a national day care network, but also vouchers for nurseries, and a range of other policies.
These have been effective as far as they go, but are a very expensive way of getting people into work, particularly if there are only low-paid jobs available. At some point, you get to a point where you're paying one group of relatively poor women to look after the children of another group of relatively poor women. This is because of the way economics works, as it seems to increase the GDP. If you look after your own children, it has no economic benefit; if you look after someone else's children, the GDP of the country increases. So it increases economic productivity, but it has some negative policy consequences.
There can be problems with some children if they spend a lot of time in day care from a very young age and both parents are working very long hours. The family tends to be under stress, both the parents and the children. There is a need to see the value of unpaid work and caring work, which is not really recognized in the current government's social exclusion policies in all parts of the U.K. It is recognized more in some parts of the U.K. than others.
This is a big issue that ministers often only address tangentially: who should care for children, how should they be cared for, and for how much time, and who's going to pay for it?
:
The answer is that it's a very big part. And the answer to your other question, I think, is no, it has not in any sense been properly raised.
Something we have not really discussed around our tables with you today is the whole situation of disabled people, many of whom have work-related disabilities to do with mental illness. In some sense, there's a kind of picture that these people are, as it were, former miners or men with bad backs, which I think is still the popular image in this country. Those people, of course, exist within the statistics, but they're not a majority.
The key point is that we find that the poverty rate for working-age adults with disabilities is pretty much twice the rate for adults without them. It is quite clearly a major source of economic disadvantage, and it has not been addressed. I think the mental illness angle is particularly difficult and needs very close attention.
Until one get to grips with this, people have very simplistic ideas about the situations disabled people may be in, and with the idea that they might be fit for work or not, and that this status might almost vary at times from day to day. So it's a very important issue, and I don't think the U.K. has a great deal to teach about it.
:
The tiered approach, as I said, came out of the consultation.
The first tier is a European Union-wide one, used in all 27 countries, and it refers to income below 60% of the median equivalized income. That is an EU-wide measure. The equivalization scale would probably not be appropriate to Canada, but as a relative income and equality measure, it's as good as many—although Canada has equally good measures with its low-income cut-offs, the market-based budget standards, and other methods I know you're developing.
The next tier is a kind of fixed poverty line, which is termed absolute, but it really is just a fixed relative line.
The last is a combined income and deprivation measure, which has high scientific validity and is very much closer to being a good operationalization of the European Union definition of poverty, which is households and families whose resources are so low as to exclude them from the acceptable way of life in the country in which they live. So the last tier is an attempt to look at how people are living, as well as how much income they have. That has been used in many countries, not just in Europe, but outside Europe.
:
Shall I go first on that, David?
Let me make almost a political observation, not a party political observation.
I find that there's a lot more public support for the idea of doing something about fuel poverty than perhaps there is about doing something about the wider forms of poverty to do with income and the type we are concerned with. We are holding a seminar on the subject in a couple of weeks, and it's always, I think, a measure of these things. We're having no difficulty getting people to come along. So I think you certainly should. I think people recognize fuel poverty as being something quite tangible, so it should be part of it.
Perhaps I may make one technical point. David did make this point, but I want to elaborate on it just slightly. It is very much to do with single people. Crudely, it's that a single person has half the income of a two-adult household but something around three-quarters only of the fuel cost. And it also is very much related to disability. The people who are really vulnerable on this, I think, are the people who are at home all day. Obviously the disabled out of work are likely to be in that group, but they are equally well reachable through the benefit system, which delivers benefits to them.
:
Thank you, Mr. Chairman. You're doing an adequate job in filling in for our regular chairman.
I'd like to ask a question of each of our witnesses today. We really appreciate the discussion around this today. I'll ask the questions, then I'll step back and allow you to answer.
Mr. Gordon, you had talked about the supports going to the seniors. The cheques go to the seniors, especially those who are living in older accommodations, older houses, and that money is not necessarily going toward retrofitting or refurbishing and bringing down the costs, the heating costs, the heating demands for that particular unit. So really what we're doing is feeding a cycle. We're throwing good money after bad. So I'd like your comments.
Can the U.K. be doing a better job of that? I think we do a fairly good job of it here in Canada as far as initiatives are concerned, where we can encourage seniors to help with the roofing and the windows and furnaces. Do you see some kind of initiative having to be undertaken in order to make sure that those heating costs are brought down?
I'll leave that with Mr. Gordon.
Mr. Kenway, you expressed a concern about putting a price on carbon and the potential hardships it might cause if other measures are not enacted, if other measures aren't taken to offset any kind of increase in a price on carbon. Perhaps you could expand on that.
I'll ask Mr. Gordon to go first, and then Mr. Kenway. Thank you.
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I'll say a couple of things, then give David a chance.
The first point to emphasize is that this rise in the number of lone-parent families, up to about a quarter, has been a very long-term trend. It's tempting to imagine that it is accelerated under the new Labour government here, which has produced a tax-credit system that in some ways is quite favourable to lone parents. But the truth of the matter is that, as in fact with most things in Britain, the era of revolution, the era of great change, was actually in the late 1980s under the premiership of Mrs. Thatcher, after the recessions of the early years. It's almost that period of great growth in the late 1980s that seems to have been when so many things changed, and I think there was a substantial rise in lone parenthood then.
Should the systems be adjusted to provide greater support for two-parent families? I think it's a very reasonable question. A point that is worth making is that most of the in-work poverty for children is among two-parent families; most of the out-of-work poverty is among lone-parent families. I think it's partly a question of how far one wants to sort of socially engineer in this way, or whether perhaps we need to look more basically at the way in which we recognize and reward the caring responsibilities. David has talked about this; we are a society in which unpaid caring is poorly recognized, including financially.
Perhaps the answer to the problem that you raise needs a slightly oblique response, rather than a direct one. But it's certainly a legitimate question.
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Yes, there has been equal pay legislation, but there nevertheless remains a substantial pay gap. David might correct me on this. I think it's possibly a 17% or 18% gender pay gap.
However, while gender pay gap and equal pay legislation is extremely important, I suspect that from the poverty point of view the pay that one really needs to worry about is the pay of part-time workers. Most part-time workers are women workers. However, the men who do the part-time jobs are also poorly paid. It's our view that there is a real prejudice against part-time. I don't know whether this translates very well into French, but in English you almost always get the word “only” in front of part-time--it's “only” part-time.
I think a considerable amount could be done for low-paid women if we did something about the low pay of part-time workers. It has to be said that this is only to some degree caused by market forces. A lot of this is in the public sector. In Britain, for example, many of these people are employed within the public sector, so it should be possible to do something.
It's not just the workings of globalization or international competition. Part-time work, for me, is the key gendered issue in pay. There are, of course, other issues.
Illiteracy is a major problem—not not being able to read at all, but functional illiteracy. It's quite high in the U.K., although it's hard to get comparative statistics in this field.
There are partnerships between government nationally, locally, and in the voluntary sector, but the partnerships between the governments and the business sector are much reduced. There used to be more in terms of apprenticeships and in-work training, but the U.K. policy in this area is not really a model. In fact, one of the problems with both ordinary poverty and fuel poverty is that the government hasn't really brought the business sector on board. So in terms of fuel poverty, for example, although there are social tariffs, often even poor people on these tariffs end up paying much more for their fuel than people who are richer and can afford direct debits in bank accounts.
So in a whole range of areas, the poor often pay more than richer people in absolute terms for the same service or the same goods. And often in terms of getting an education in order to combat illiteracy, the provisions available through the business sector are ten to one against poor people in terms of their losing wages to take time to train.
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The U.K. government has rejected the idea of using budget standards in order to test the adequacy of the income support rates. In the past in Britain, with the work of Booth and Rowntree, these kinds of studies were used widely. Rowntree's work in the 1930s was used to set the national assistance rates at the foundation of the welfare state. There was some work done in the 1960s then to test the adequacy of the supplementary benefit rates, the income support rates. That work was classified by the government as an official secret, and I think to this day it still remains an official secret.
Market-based measures, project standard measures, are unlikely to be used by the U.K. government in the foreseeable future. There are a number of good academic studies, both in Britain and Europe, using different levels to set the criteria, such as the minimum income you need to maintain healthy living, using the medical criteria on how much you need in order to have exercise and adequate diets. These are very interesting studies if you compare to our income support rates, particularly when it looks at the amounts of money available for families with disabled members, particularly disabled children.
But I think the U.K. government is not going to pursue those measures. The Australian government did look at them recently and also has not used them, because they believe there are too many matters of opinion on what should be included and what shouldn't be included. I think they saw the example of the Russian Duma, where there were big debates in their parliament about how many bras should be included in the basket for women of various ages, and British civil servants shuddered with horror at that.
I think it is worth pursuing, but I don't think it will be pursued actively at the government level in Europe in the foreseeable future.
I want to thank Professor David Gordon, director of the Townsend Centre for International Poverty Research at the School of Policy Studies, University of Bristol. Thank you, sir. I want to also thank Dr. Peter Kenway, director of the New Policy Institute of London. Thank you both very much for your analysis and expert opinion today. We will be doing some more studies on the U.K. policy towards poverty when we come back in the fall.
I remind committee members of two things: first of all, there is no meeting on Thursday; second, the report on the EI commission was tabled yesterday, and the clerk will be making that available to us in due course.
Since there is no meeting Thursday, I'm sure you would want to join with me in thanking our staff for all the hard work they have done in enabling us to have a good session and doing some good work at this committee.
Mr. Lessard, did you want to say something?