The (invisible) problem of riches

The (invisible) problem of riches

Last week on this blog, Jonathan Bradshaw argued that our ‘benefits system’ wasn’t broken and highlighted how the tax system in the UK did not do anything to help tackle poverty as it failed to redistribute wealth effectively. Whilst the tax system may not directly redistribute wealth, if everyone (including organisations) paid the tax that they were supposed to, and paid it on time, the government would have, at a conservative estimate, around £60billion more at their disposal to tackle poverty. (around £32billion ‘tax gap’£28billion tax debt) A phrase Jonathan has used in a presentation about the previous government’s approach to tackling poverty always stays with me. He claimed that the ‘treatment was right’ but that ‘the dose wasn’t strong enough’. A potential extra £60billion would certainly provide a metaphorical ‘shot in the arm’ for anti-poverty work in the UK.

Jonathan was absolutely right to bring the tax system back into discussions about welfare in our society. And we should also include discussion on the state of our democracy if ‘government of the people, by the people, for the people’ allows large sections of the same ‘people’ to live in poverty when there is no need and no absolute lack of resources across our society. Shouldn’t we be asking if parliament is broken, or at least not working, if government decisions about ‘tax and benefit reforms can account for almost all of the projected increase in child poverty over the next few years’? And which bit of Britain is ‘broken’ if public attitudes to people claiming benefits are indeed hardening?

If we continue to focus attention solely on the ‘benefits system’ or what most people call the ‘welfare state’ in our efforts to tackle poverty we risk ‘othering’ the welfare state, to use Ruth Lister’s concept. She describes othering as “a discursive practice which shapes how the ‘non-poor’ think and talk about and act towards ‘the poor’ at both an interpersonal and an institutional level.”The concept can easily be applied to how politicians, sections of the media, think-tanks and even ‘taxpayers’ and ‘hard-working families’ think and talk about the popular understanding of the ‘welfare state’. Claiming that the ‘welfare state’ isn’t working and/or needs radical reform surely misses the point that it is largely the product of the society and democracy it can be found in and is only as well-resourced as politicians allow it or want it to be. To use another phrase that I always find myself returning to, this time from John Veit-Wilsons ‘Horses for discourses’:

‘Ensuring that all the members of society, residents in or citizens of a nation state, have enough money is a clear role which governments can adopt or reject, but they cannot deny they have the ultimate power over net income distribution.’

Many people have argued that in the investigation of the causes of poverty, we need to examine and understand the causes of wealth, which often remain relatively well hidden. As long ago as the 1700s, Adam Smith wrote in The Theory of Moral Sentiments that ‘we see frequently the vices and follies of the powerful much less despised than the poverty and weakness of the innocent’.  In 1904, Joseph Rowntree, in a memorandum on the proposed trust he was to set up (The Joseph Rowntree Foundation today) suggested that ‘Perhaps the greatest danger of our national life arises from the power of selfish and unscrupulous wealth’. More recently Peter Townsend argued that wealth and poverty have ‘common roots in the unrestrained exercise of economic power’. Unfortunately, we (ourselves included) still spend a disproportionate amount of our time debating changes to services and systems at the bottom end of the income scale and not so much time on those systems which operate for those with more money.

Perhaps, to paraphrase Tawney, if we investigate and begin to uncover the‘problem of riches’, we may stumble upon the solution to the ‘problem of poverty’


Work has to be a better route out of poverty. Most poor children have a working parent.

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Poverty leads to poor attainment.  Poor attainment leads to poverty.

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