onsdag 11 juni 2008

Poverty, poverty, poverty

Today's news contains a report about the government's failure to prevent increasing child and pensioner poverty.

It is unfashionable to say this, but child poverty is to a large extent a consequence of the decline in the family. Single women with highly paid jobs may be able to function effectively as single mothers, but if the mother has no qualifications and can only do a menial task, or the child is not old enough to allow her to go out to work, then child poverty will be an inevitable consequence. And with the tax and benefit system the way it is, then it is quite likely that there will be no incentive to work, but rather to continue living on the bare subsistence provided by benefits. Tax credits were meant to address this but are evidently too complicated for people to get to grips with.

Pensioner poverty is a separate issue. The Chancellor's raid on the pension funds cannot have helped, but the main effects of that have yet to come. Most pensioners will have worked, if they worked, during the post-1945 period when they are likely to have paid 40% of their earnings in tax, and if they had a mortgage, a further substantial chunk will have gone out in interest payments. To that extent, their ability to save will have been badly hit, and it was inevitable that they would be hard-up when they retired.

The present generation of pensioners need assistance to deal with their problem but policy should be directed to the underlying cause to prevent this from recurring.

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