Select Committee on Social Security Minutes of Evidence

Appendix 1


  1.  The distinction between empirical poverty measures, derived from scientific research, and political MIS (and politically-set income maintenance provisions) is shown in table 1 appended. Empirical poverty measures are distinguished from the whole range of other deprivations and social exclusions by their causal correlation with low personal disposable incomes. Many deprivations and exclusions are causally correlated with low income ("The rich do not choose the life styles associated with the lack of necessities": Mack and Lansley 1985 p 96) even though not all are. To discover which social evils correlate with income levels is a matter for statistics. To discover which income-related social evils are caused by low income and at what levels is a matter for social science.[19]

  2.  The transition from the findings of social research to the potential setting of specific benefit rates has often been misunderstood, especially in government, partly perhaps because of the paradox that social science provides data which are methodologically reliable (they express the range of probability for poverty boundaries and clusters correlating with low incomes) but do not give precise guidance in individual cases. By contrast, government needs to construct precise benefit scales for application in individual cases, but these may not be wholly scientifically reliable in the terms of the research findings. The intermediate step, which makes it possible for governments to provide a credible basis for the tiered range of income maintenance provisions from minimum wage to social assistance, is the use of a governmental minimum income standard which reflects a defensible public view of the income needed for the minimally adequate level of living for some section of the population to achieve what society defines as human decency, the ability to take part in society and avoid shame (all terms drawn from the European Union recommendations on this topic). This is then the comparator against which the precise details of income maintenance benefit scales can be calibrated, taking the duration of dependence into account.

"Poverty Lines", Governmental Minimum Income Standards and Income Maintenance Measures

Table 1[20]: "Poverty lines" and MIS

  "Poverty lines" are best described as the income levels or bands which are statistically found most closely to approximate to the boundaries between:

    (a)  high probability of correlation between high rates of complex socially defined deprivations and low incomes; and

    (b)  low probability of correlation between incomes and deprivations.

  Poverty lines are scientific measures of the minimum incomes individuals and households are discovered to need in order to take part in the society in which they live and to avoid what is defined as deprivation and exclusion in that society.

  There are broadly two kinds:

    (1)  empirical poverty lines, based on statistical survey evidence:

      (a)  showing the minimum income levels at which people in fact are able and do take part decently in society and avoid deprivation, or

      (b)  showing what the population itself reports would on average be just sufficient to "make ends meet".

    (2)  prescriptive poverty lines, based on experts' calculations of the minimum income which ought to be sufficient for minimally decent participation as socially defined if used according to the budgeted prescriptions based on evidence of prevailing adequate living patterns.

  Scientific research into poverty boundaries reveals what that society's standards of adequacy are, irrespective of their political implications.

  Governmental Minimum Income Standards (MIS) are political criteria of the adequacy of income levels for some given minimum real level of living (for a given period of time or indefinitely, of some section or all of the population) embodied in or symbolised by a formal administrative instrument or other construct.

  MIS are based on political considerations and there are several types, discussed in this report.

  The standard of adequacy of MIS is primarily a political reflection of that government's values, ideology and electoral considerations.

  Social assistance and other minimum income benefits are based on political decisions about how much government is willing to pay to people in certain categories.

  Though social assistance is by definition designed for the poor, its actual benefits may be demonstrably inadequate to meet minimum income or other needs for social participation. Not all the recipients of other minimum income benefits are categorised as poor, nor is government's aim necessarily to provide a sufficient income to combat poverty: it may be to help people maintain their previous levels of living, or to support their own efforts to get out of poverty.

  The standard of adequacy of minimum income maintenance benefits is primarily a political consideration of feasibility and costs.

19   This need not be a matter for fine psychological distinctions in explaining behaviour; it may be enough to see that the choices of action open to people are limited by their low incomes and can lead to what to them seems rationally chosen behaviour which richer people might find irrational when wider choices are available. To express frustration and alienation may seem offensive to others, but it is not necessarily irrational. Back

20   Tables extracted from: John Veit-Wilson [1998], Setting adequacy standards: How governments define minimum incomes, The Policy Press, Bristol. ISBN: 1-86134-072-9. Back

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