Share nicely?

Danny Dorling’s new book is a stark analysis of poverty and low incomes in Britain today. The author rightly focuses on families with children and pictures the lives of seven children spanning the range of household incomes. This reminds us of the late Michael Apted’s television series Seven Up, which followed the lives of fourteen children in England from 1964, when they were seven years old, though Dorling’s message is very different. Seven Up gave disproportionate representation to some advantaged children, whereas Seven Children shows how many people are managing on low incomes.

The author presents the disposable weekly incomes of each of these seven families, adjusted for household size and evenly spread across the income scale. They are: £118, £237, £305, £371, £476, £633, and £984. There are 14 million children in Britain, so roughly two million in families managing on something like each of these income levels. That is a lot of children in families with very limited resources. These figures are after housing costs, and one of Dorling’s many powerful points is the high cost of housing for low-income families compared with the low costs for affluent older households with the mortgage paid off.

Many of us who are relatively prosperous insulate ourselves from the reality of poverty with two comforting illusions. First, many prosperous people believe their incomes are somehow broadly in the middle of the range, when actually they are way above that. Sixty per cent of Britons earning £80,000-£100,000 a year think they are “about average”. And the incomes of poor people are often overestimated. The sheer gap in living standards is therefore much greater than many people realize. The prosperous people have little idea how the other 75 per cent live.

This misconception is reinforced by presentations of data interpreting the average as the mean, so it is pulled up by a few very affluent families. Median incomes and incomes in different equally sized cohorts offer a much better perspective. Some of the more egregious errors in benefit policy come from working on means, not medians.

There is a second illusion from which the affluent derive comfort – that high incomes are a reward for effort and hard work. High house prices are seen as a reward for building that conservatory, for example, rather than as the result of quantitative easing or a restrictive planning regime. Within one’s own milieu the world can seem competitive, but that does not make it so more widely. Luck may matter more and merit less than we like to think. Indeed, Dorling cites interesting evidence that the more unequal a society is, the more likely people are to believe there is a fundamentally meritocratic distribution of resources. This is odd, because actually social mobility declines as the gap between the rungs on the ladder grows wider. This problem has become even more acute as Britain has seen the value of assets, notably a house and a pension, rise from three times one’s income to six. That makes acquiring an asset from one’s earnings harder and inheritance matter more.

Dorling’s trenchant book makes it harder to hold on to such convenient illusions. Created from the Family Resources Survey, his accounts of family incomes are empirical – though it should be noted that the FRS is not entirely consistent with other data sets and appears to understate income from benefits. He should warn about this. His seven children are invented assemblages of the data about families in different parts of the income range. He is trying to bring that statistical resource to life, but his device doesn’t quite work for me. It is hard to engage with the equivalent of a computer-generated person. These life stories aren’t quite true. Dorling is not a novelist with the skill to interest us in imagined lives, so his examples fall into the uncanny valley somewhere between data and narrative.

There are other costs to this methodology. It means important and illuminating accounts of specific issues are buried in the stories of one of the invented people. So, for example, Dorling’s good account of the complexity of the rules on entitlement to free school meals, and how some poor children can lose out entirely if they select the wrong meal option, is submerged in a chapter about “David”. He brings out vividly the risks for people who can’t afford home contents insurance, but that is buried in an account of a child he calls Candice.

Beneath this ingenious methodology a much plainer book is struggling to come out: what the Family Resources Survey tells us about the lives of people on different incomes in Britain today. That may have sounded too boring to get a publisher, and Dorling does not want to restrict his readership to earnest policy wonks, but it could have conveyed all his information in a more illuminating way.

Dorling is clearly angry about all this poverty. That isn’t of itself a fault – so was Dickens, so was Seebohm Rowntree, so is Polly Toynbee. And there is lots to be angry about. But that anger gets in the way of engaging seriously with why we have got into this mess and why it is particularly bad in Britain. The author’s view is clear – a group of bad people (Thatcherite Conservatives) have done the damage and pusillanimous Labour governments haven’t had the guts to reverse it. He just doesn’t like rich people. He seems to think: “For a few people to be successfully greedy, many other people, an increasing number of others, have to be poor”. But there is a more complicated explanation of what has gone wrong in Britain, which includes poor economic performance, a failure to promote growth in our twin second cities, Birmingham and Manchester, the effects of skill-based technological change on wage inequality and, yes, a badly designed tax and benefit system.

The book has little to say about what might be done, apart from hinting at a universal basic income (UBI). Dorling dismisses objections that it is unaffordable as just another example of “an age-old tactic used to hold back progress”. But that won’t do. Either it has to be set at a level high enough to float people off conventional benefits, in which case it really is expensive, or it comes in at a much lower rate with benefits on top, in which case it is not clear what the point of it is. As my former colleague at the Resolution Foundation, Torsten Bell, has argued, “an affordable UBI would be inadequate and an adequate UBI would be unaffordable”.

Dorling fears that a small number of rich people shape the media narrative and make reform impossible. But that is too pessimistic. It is possible to make the case for reform, but that involves a very different approach from the one in his book. First, if it is necessary to raise taxes to fund our welfare state, then the case should be made more in sorrow than in anger. Taxes are not a means of punishing people for being rich and greedy. They are not even always a device for reshaping incomes. They are to fund a welfare state to which we all turn at times of need, and it is only right that people with the broadest shoulders make the biggest contribution. There is a lot to be learnt from Beveridge and Attlee.

Second, our current distribution of income protects business leaders and policy makers from the consequences of our poor economic performance. British GDP per head is significantly lower than in Germany or France. But the most affluent 20 per cent of Britons travelling to those countries would not detect any difference between their living standards and those of their peer groups abroad. The burden of adjustment to our poorer economic performance is entirely born by the less affluent half of the British population, whose incomes are well below those of poor people on the Continent. Median incomes are 20 per cent (£6,400 a year) higher in Germany and 9 per cent (£2,800 a year) higher in France than in the UK. No wonder it is hard to implement tough policies to boost our economic performance when our national elite is protected from the consequences of failure.

Finally, what kind of country do we want our children and grandchildren to live in? If it is increasingly shaped by the hereditary principle, we will all lose out from the waste of talent. The educational arms race to try to ensure the best chances for one’s own children will get more intense and stressful for everyone. And failure will be so catastrophic that fear will haunt families as in a Victorian novel.

There should indeed be a much better Britain for Danny Dorling’s seven children. But he may need to adopt a different approach to get us there.

David Willetts is President of the Resolution Foundation. His books include The Pinch, 2010, on fairness between the generations

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