At last Scotland is producing a commodity hotter than a ticket to the Oscars, over which politicians are fighting and of which we have copious reserves. Just our luck, then, we can’t make any money from it. Poverty is something we Scots do better than anyone else in the UK. In Glasgow, a quarter of council wards have half their children living in homes that rely on benefits.
So when David Cameron calls poverty a moral disgrace he’s talking about us. When one of Cameron’s key policy advisers, Greg Clark, promotes the social policy of the commentator Polly Toynbee over that of Winston Churchill, we should take note, even if it is just an exercise in rebranding.
I am all in favour of a more caring Conservative party. Kindness, tolerance and manners are hugely underrated virtues and every bit as important as universal property rights or the rule of law as the bedrock of a civilised society. But, at the risk of sounding like Marie Antoinette, it strikes me politicians are in danger of making poverty, and the solution to it, more complicated than it really is.
Cameron is concerned about the gap between the richest and the poorest; so-called “relative poverty”. Thus, poverty is defined as those living on less than 60% of average earnings, which, at present, means a family of four living on less than £13,600 a year.
The problem with basing a definition of anything on an “average” is a large proportion of the population inevitably has to fall below average. When you add in the safety net of the welfare state, the fact that inflation is relatively low, that the price of many consumer goods has fallen in real terms and make adjustments for individual circumstances, the situation becomes even less clear cut.
That is not to deny there are people — particularly children and pensioners who have no redress — living in exceptionally trying financial circumstances. Nor does it mean Cameron is necessarily wrong to concentrate on the wealth gap. In the past, the Tory definition of “relative poverty” was an aunt selling a Picasso to pay the school fees, so to hear them now defining relative poverty as the inability to own a flat-screen television constitutes progress of sorts, I guess. But it strikes me a lot of the world must be scratching their heads at the debate taking place in Britain.
Poverty is watching your child die because you cannot afford medicine. It is elderly women begging on the streets. It is 10-year-olds working in sweat shops. It is not the lack of a holiday in Florida and the inability to afford the latest mobile phone. Poverty is an absence of wealth and the only way to eliminate poverty is to create wealth.
We know the cause of poverty and we know how to fix it. Poverty is caused by economic repression and it is fixed by the generation of wealth. You only have to look at the way economic freedoms have been introduced in China and the spectacular growth of that country to understand this. It’s not even that difficult to achieve. In Scotland there are plenty of families who, three generations ago, were a step away from the workhouse but who now own two cars and a comfortable home.
Even in Africa, a continent synonymous with poverty, its alleviation is a reality. According to the UN Food and Agriculture Organisation, in 1950 almost a quarter of the world’s population went hungry. Today the figure is 10%. That is 10% too many, but there is no denying progress has been made.
Poverty is not fixed, as Toynbee would have us believe, by taxation. We tried that in the 1970s. Tax on unearned income was running at 90%, the country was considerably less affluent than it is today and the IMF had to step in.
The other thing that strikes me is the way the concept has become disembodied from any idea of earning. With a few exceptions, people who have money have money because they have worked for it. Listening to the politicians you would think being comfortably off was some kind of fluke.
The ghastly concept of “the deserving poor” went out with the Victorians, but we are in danger of replacing it with an idea of the undeserving rich. Earning money confers benefit not just on individuals but on society as a whole. The danger with talking about poverty in terms of “moral disgrace” is that it is only a short hop to talking about the wealthy in terms of immorality. We already hear a great deal about the “obscenely rich”.
There is nothing inherently immoral in the creation of wealth. In fact the opposite is true. Out of a stable, growing economy come all our other freedoms. It may go against psychology and the dictates of conscience, but it is nevertheless true: economics is not a zero sum game. Productivity is expandable. Your wealth does not cause my poverty.
We have endless examples of this in Scotland. Tom Hunter, Tom Farmer, JK Rowling, Alexander McCall Smith, Ian Rankin and Ann Gloag are, to name but a few, individuals who have created vast wealth from absolutely nothing. The money these entrepreneurs and authors have generated has fuelled the coffers of the Treasury and they have donated millions of pounds to philanthropic causes. There is nothing obscene about this.
It strikes me what Cameron is concerned about is not poverty but fairness. It is almost impossible to create a political structure that delivers economic fairness. History is awash with attempts and their disastrous consequences. A politician would have to be mad or Swedish to try it.
The only way to create any real kind of economic justice is to create opportunities for people to work their way out of poverty. This is understood nowhere better than Scotland. Since the Reformation, impoverished Scots have known the best route up was via education. The destruction of grammar schools kicked that ladder away, as research by an education charity, the Sutton Trust, has made only too clear.
If Cameron wants to eliminate the poverty gap, he has to embrace wealth creation while simultaneously offering an opportunity to those in the lowest income brackets to work their way up. Far from looking to Scotland for the problem, he should look to us for the solution. There is, after all, no better advocate of the benevolence of wealth creation and the importance of education as a factor in social mobility than Adam Smith.
