I agree with your statement that “government action to reduce poverty is effective”. It can be effective.

However, in fairness, when you write:
“Between 2008 and 2009, mean take-home incomes grew by 1%, even despite the recession.”,
there’s a crucial point to make:
Has this 1% been weighed against the rise in the general cost of living (i.e. food), council tax rises and the galloping utility bills (they really went up loads in 2008-09)?

”Poverty” here is defined as with below 60 per cent of contemporary median net disposable household income after housing costs

But a true definition of poverty isa condition in which a person or community is deprived of, or lacks the essentials for a minimum standard of well-being and life

I don’t think we need a new definition.

I think we need a new word.

“But a true definition of poverty isa condition in which a person or community is deprived of, or lacks the essentials for a minimum standard of well-being and life”

That doesn’t actually change the numbers much. The Joseph Rowntree Foundation got people to come up with an absolute minimum income standard as per your definition, and the numbers were similar to the relative poverty definition.

Claude – short answer is that it is a good point and I reckon that costs would (for most people in poverty) have risen quicker than incomes. I think there was some research recently which suggested that inflation over this time for people on low incomes was more like 5%. It is still quite surprising that incomes rose during a recession, though.

I would expect the 2009/10 figures to be worse, and the worst effects of the recession on poverty to be felt over the next few years, particularly as a result of the coalition’s cuts.

Pagar – I think you are trying to say that poverty is an absolute rater than relative matter. I don’t agree – I think poverty is and always has been relative to other citizens. As soon as you refer to a “minimum standard of well-being”, you invite the question “according to whom”. The 60% figure, whilst maybe a bit arbitrary does at least give some definition to what is being discussed.

I’ve always thought that the more striking thing about the poverty figure is that it means that if you have an ‘average’ income, your income is only ~1.7x the poverty line income, whereas most people think that an ‘average’ income is £40k or something daft like that.

Yes. of course the figures account for inflation….whether RPI or CPI I don’t know. Absolutely no one is going to release these sorts of figures without taking account of inflation.

They won’t account for differential inflation rates for different parts of the population though. However, the implicit assumption above that the inflation rate for the poor has been higher than for others is almost certainly wrong.

The richer you are the more services (as opposed to physical goods like food and manufactures) you consume as a portion of your income. (In the UK this is even more so than in many other countries, given the way that services like medicine, dentistry and education are free for the poor while those fuirther up the income scale might decide to purchase some of their consumption of these). And inflation rates for services are, unless something very strange indeed is happening, always higher than inflation rates for manufactured items.

From http://don-paskini.blogspot.com/2009/07/minimum-income-standard-2009.html

“The minimum cost of living has risen by 5%, contrasting with official inflation figures of 2½% (CPI) and -1% (RPI). A low-paid worker whose earnings were linked to the retail prices index could be 6% worse off this year, relative to the minimum cost of living.”

”Poverty” here is defined as with below 60 per cent of contemporary median net disposable household income after housing costs.”

I find this a pretty lame definition of poverty.How does this relate to the ability to put food on a plate, or shoes on feet, or heat a living room? Or given 21st century concerns how does “below 60 per cent of contemporary median net disposable household income after housing costs” relate to buying Johnny the latest ps3 console or game or a two week holiday in Spain, or filling the tank on the 4×4?

In fairness, it does indicate an improvement in the relative wealth of children and pensioners and (whisperer it if you dare) is something new labour should rightly take credit for.

Why after housing costs – given that they are most people biggest expense ? The net result is that people in “poverty” will have a higher disposable income than 40% of the people earning below median income. That cannot be poverty, and it certainly isn’t equitable.

The inflation issue is important when looking at poverty. Nominal incomes do not tell the whole story of how much income has to go on financing basic necessities. For example, in 1971, the average family spent 21% of their income on food and non-alcoholic drink, 2007 it was around 10%. Therefore, those on low incomes who spent a higher percentage of their income on food were better off through their real income no matter where their nominal income was in relation to the median.

Inflation always makes the poor worse off because they lack the assets to compensate for the loss of purchasing power. Unfortunately, real incomes for those in poverty are currently being squeezed and it will continue for at least the next few years. With so much spare capacity ( output gap ) in the economy there is very little chance that incomes will keep pace with inflation. That means huge swathes of workers will be getting poorer. It will disproportionately hit those in low incomes because most of the inflationary pressure will be on food and energy. Those two sectors are necessities rather than discretionary spending and they consume a large percentage of income from those in poverty. On the upside it makes the economy more competitive so although real incomes are squeezed, employment prospects are enhanced though for a lower real wage.

@10 Yes, but benefits, including the state pension, are indexed to account for inflation, so “the poor”, if you define that as people wholly reliant on benefits, are arguably more insulated from the real economy than those in work who are currently having their wages frozen, which in real terms is a pay cut.

@ 11
I don’t think you can narrowly define poverty and ‘ the poor ‘ to those wholly reliant on state benefits. Moreover, although benefits are index-linked to September RPI, inflation does not rise in a uniform manner across all prices. For example, it is perfectly possible to have food inflation running at 10% and RPI at 2%. Therefore, those who spend a lot of their income on food will have a higher personal inflation rate than the index.

If 60% median income is the definition of poverty, and this was for 2008/09 £244 per week, that is an income of £12 688.

Somewhat above the line where the government which was so concerned about poverty started taxing people. Which either suggests they were a government who were not so concerned (see 10% tax rate for possible evidence of this) or perhaps they did not consider this poor? Odd really, considering for much of the previous government the chancellor was a man dedicated to defeating poverty. I can see problems with building on the narrative of success against poverty.

There are currently 7.8 working age adults in the UK living in poverty.

Well, I dunno about you but I laughed.

Gwyn – for that, you are appointed as Liberal Conspiracy official proof reader

”but benefits, including the state pension, are indexed to account for inflation, so “the poor”, if you define that as people wholly reliant on benefits, are arguably more insulated from the real economy than those in work who are currently having their wages frozen, which in real terms is a pay cut.”

You jest, When we get an increase in our pensions our rent and rates etc go up accordingly in fact it is always more than the increase which do us no good at all.
The rise in the cost of electricity food and rates mean our income has gone down in real terms, we are not insulated.
We worked all our lives and get a state pension which is NOT A BENEFIT we paid for it.