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How best to measure poverty has long been a vexed question in British politics. The naive hope that statistics would be able to produce an answer simultaneously accurate and robust enough to withstand the pressures of political misuse, abuse and misunderstanding has yet to be fulfilled.

In the Blair years, a story – likely apocryphal – had John Prescott raging that “we’ve been in power for five years, and half of people still earn below average”. It’s a decent joke, but it also gets at a truth about the awkwardness of statistical measures of real-world problems.

Like the three statisticians who try to hunt a deer – one shoots 10 yards too far to the left, one shoots 10 yards too far to the right, and the third punches the air and shouts “We got it!” – data doesn’t necessarily describe what is actually happening in a true, rather than technically accurate, sense. In the political bear-pit, that risks handing ammunition to those who want to overstate their own performance or understate that of their opponents – a return to the back and forth which numerical truth was meant to free us from in the first place.

The simple measure of averages, satirised in that Prezza gag, has obvious flaws. Average income could rise even as the poorest became slightly worse off if, say, the very richest person enjoyed a truly vast increase at the same time.

Hmm. Perhaps measuring inequality would provide a more truthful truth, escaping crude averages and exploring the gap between rich and poor instead? The concept appealed to some on an ideological level, and swiftly became fetishised – inequality was to blame not just for, well, inequality but for all manner of social ills. The gloss came off when the impact of the financial crisis on the richest resulted in various of these new measures showing the crash had technically improved equality. It was an accurate result on its own terms, but the idea the new system theoretically scored such a disaster as a positive thing exposed its inherent flaws.

At the same time as these debates and experiments were pursued, the ways in which the state gathers data and assesses its own performance on poverty and social opportunity have changed. In some instances, outdated, clumsy and downright misleading methods have been succeeded by better ones. In other cases, politicians have tried to cherrypick the numbers that suit them best. By turn, their opponents have accused both types of change of being a conspiracy against transparency and accountability, fairly or otherwise.

All this has frustrated the majority of people in the field, who want to get on with solving problems. Even if they don’t feel that such hurly-burly has got in the way or distracted from the matter at hand, many would still like an accurate, consistent measure of poverty so that they can see if things work or if they do not. With limited money to spend, and the futures and lives of the most vulnerable at stake, having a reliable basis against which to test different policies would be of obvious benefit.

Philippa Stroud, the former Iain Duncan Smith adviser, co-founder of the Centre for Social Justice, and now Chief Executive of the Legatum Institute, shared that frustration. She admired the way in which the Institute for Fiscal Studies had managed to knock on the head much of what had previously been a factual free-for-all on the question of what government spends and taxes. Under Robert Chote (who now runs the OBR, the quango doppelganger of the IFS) an external body had managed to establish itself, its analysis and its post-Budget presentations as a trusted authority on fiscal facts. Perhaps the same could be done for measuring poverty?

That is the background for Stroud’s new Social Metrics Commission, which formally launched yesterday. As well as seeking to create a non-partisan outside authority, the SMC has created its own method of measuring poverty, hoping to overcome some of the flaws of past attempts. There is no scoring of inequality or social mobility, for example. And while a household’s available resources are compared to the median as a working estimate of relative poverty, there is also consideration of the way in which their costs differ from personal circumstance (i.e: disability) to area (i.e: housing bills). The report itself also makes clear that they would like more and better numbers in various areas to further improve the metric.

It’s not hard to see how incorporating the varying costs faced by different people would be more informative than simply assessing their means. The initial analysis produces some interesting details which more clumsy measures have neglected – not least the huge impact of disability on driving poverty, the way in which London’s wealth conceals high poverty rates, and the degree to which pensioner poverty has been slashed in the last 15 years.

The report presents some political challenges, including for its authors.

For example, there are 2.5 million people marginally above or below the SMC’s poverty line, and 4.1 million people 50 per cent below it. “Small changes” to the situation of the former could push the former into or out of poverty very easily, while really quite major changes would be required to help the latter group escape it. It also seems likely that more of these are in what the Commission terms “persistent poverty”, rather than temporarily on hard times.

That’s a head-scratcher for Government: if you have to choose, do you help the easier to reach first or those in greater need?

For the SMC, if it achieves its hoped-for goal of becoming the familiar independent authority on the topic, it’s an equally important question. If the statistic which gains most traction from its reports is the total number of people in poverty, then the incentive will be for ministers to do address the low-hanging fruit for a quick win, risking a lack of aid to the most needy; if the focus of its new index is the very poorest, then the political response could overlook those who are still in poverty but not the very direst state, resulting in a state that promotes bread line maintenance of life, not enables people to live and prosper beyond that level.

The Commission’s new statistics and insights are interesting and welcome. But new numbers do not vanquish politics, they simply become an additional tool within it. The success of the project will rest ultimately on selecting and enforcing the correct strategy for how these facts and figures are presented and deployed; what behaviour by ministers will be rewarded with the stick, and what with the carrot? In other words, while the numbers are informative, the work of Stroud and her fellow Commissioners has just begun.

87 comments for: How to measure – and vanquish – poverty? A new answer to an old problem.

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