Council housing in Tower Hamlets, London, dwarfed by financial buildings at Canary Warf. Photo: Abbie Trayler-Smith/Oxfam

Poverty and income inequality are inseparable problems

Inequality, Research 0 Comments

New research from Oxfam and researchers at the London School of Economics shows a clear link between growing income inequality and income poverty in the UK. Philomena Cullen explores what this means for anti-poverty efforts both nationally and globally.

Council housing in Tower Hamlets, London, dwarfed by financial buildings at Canary Warf. Photo: Abbie Trayler-Smith/Oxfam

Council housing in Tower Hamlets, London, dwarfed by financial buildings at Canary Warf.
Photo: Abbie Trayler-Smith/Oxfam

Oxfam’s core purpose is the ending of poverty and suffering. Yet, in recent years, we’ve grown increasingly alarmed by extreme and growing inequality around the world. Some have questioned why an anti-poverty organisation should concern itself with the gap between rich and poor. The reason for our twin-focus is simple: extreme inequality is a barrier to reducing, and ultimately, ending poverty across the world.

Globally, this analysis has become increasingly mainstream thinking. Indeed, when world leaders agreed the Sustainable Development Goals in 2015 they included– for the very first time – a specific Goal to reduce inequalities, alongside the Goal of ending poverty in all its manifestations. They have set themselves a stretching 2030 target.

Significantly, the Goals do not only apply to developing countries, they apply everywhere – including in the UK. Yet, to date, the relationship between poverty and economic inequality in the UK context has been woefully neglected. It is this gap that our report, Double Trouble, helps to fill, and with significant implications for anti-poverty efforts within the UK.

Published today with our academic partners, CASE/LSE, Double Trouble takes the long view by exploring the trends in relative income poverty in the UK over the last five decades. We’ve focused on the relative income poverty measure as it is one of the key indicators used widely by all. This research asked the urgent, and controversial, main question – do these relative income poverty trends have anything to do with high levels of UK income inequality that we have also witnessed?

The stark answer emerging from this comprehensive independent review of the empirical data is a resounding ‘yes’. This report makes clear there is a positive correlation between income inequality and relative income poverty in the UK. The strength of this connection depends on which measure of inequality is used and this report makes no claim about causation – but the central conclusion is clear.

The significance of this finding is that we can no longer treat poverty and economic inequality as separate problems which can be tackled in isolation. They are instead closely linked and must be tackled together.

We acknowledge that our report is only a humble first step – a problem diagnosis of the reality of the entwinement of income poverty and income inequality in the UK. We identify the broad range of policy directions which could address this, but more research is required to identify the suite of policy solutions.

However, we hope and believe that Double Trouble makes a strong intellectual contribution to the academic and policy debate on the state of UK poverty, by partially filling some of the existing knowledge gaps. To have genuine impact, this research must do more than merely plug an intellectual gap; it must drive towards substantive policy and practice change.

Our key finding, must serve as an overdue and urgent call to action for all anti-poverty actors in the UK to seriously question whether a focus on reducing poverty alone is now sufficient to tackle the complexity of the challenge we face today. This could prove an uncomfortable challenge.

The shift Oxfam GB has made in widening our focus to encompass both poverty and inequality reduction has not been without its critics internationally or here in the UK. Yet the empirical data outlined in this report demands this reassessment. ‘Business as usual’ interventions to address domestic poverty in isolation from broader economic inequalities is no longer sufficient.

At the very least, the UK data contained in Double Trouble means the positive relationship between these two insidious realities can no longer be dismissed as either ungrounded ideological conjecture, or even, as the report makes clear, as little more than the product of an inherent mathematical relationship.

For our part, this research serves to reinforce and re-invigorate our global analysis that more unequal countries have less success in tackling poverty. We will therefore continue, unflinchingly, to sound the emergency alarm about the problematic relationship between poverty and inequality, this ‘double trouble’, wherever we find it occurring.

We ask all those with an interest in poverty reduction, from the governments of the UK to the anti-poverty sector itself, to explore with us the implications of this positive correlation. We know we don’t have all the answers. Nor can we turn these insights into action on our own. It will take all of us to recognise the deep connections between poverty and economic inequality in the UK, and to act together to tackle these twin challenges.

Author
Philomena Cullen

Philomena Cullen

Philomena is a Senior Policy Adviser at Oxfam GB advising on UK poverty issues. She believes in the integration of theory and practice across disciplinary boundaries to find the best solutions to make a difference to the lives of people experiencing the complex injustice of poverty.Philomena began her career as a statutory social worker, before moving into the voluntary sector where she has held a number of policy and management posts over the last fifteen years, including at the House of Commons, with Save the Children, adviser at the Catholic Bishop's Conference of England and Wales, as well as four years as the chief executive of a frontline anti-poverty charity serving vulnerable Irish emigrants.