Family Poverty: memorandum
In spite of increases in average earnings and living standards for a large part of the population, many people in Great Britain are at present living in poverty. Some are old people, some single people with special problems; many are families with dependent children. This memorandum is designed to draw attention to the existence of this last group, to point to some of the social and personal problems associated with poverty and to suggest ways in which the poverty of these dependent children might be alleviated.
The incidence of family poverty
Poverty is difficult to define, but a convenient measure is provided by the National Assistance Board scales which are laid down and periodically revised by the Minister of Pensions and National Insurance with the approval of Parliament. These scales list the amounts considered necessary to meet the essential needs of adults and children in different circumstances, and the N.A.B. allowances actually paid are calculated with reference to them. The scales include allowances for each child, increasing with the age of the child and ranging at present from 22/6 a week for a child under 5 years to 33/6 a week for a child of 11–15 years.
There are many wage earners’ families where the family income including family allowances is less that the amount laid down by the N.A.B. scales as needed for a family of that size and composition. This situation may arise because of the low level of earnings of the father, the number of dependent children or the high cost of housing. The children may thus spend the whole of their childhood in a situation where there is insufficient money to care for them adequately in spite of the fact that their father is in regular employment. The Minister of Labour (Mr. Gunter) was asked in the House of Commons on 22nd February 1965 what estimate he had of the number of families where the wage earner’s income was below the scales of the National Assistance Board. He admitted that the only figures available were subject to wide margins of error, but said that the number of families seemed to be between 50,000 and 150,000. The average number of children in these families was probably something over three. Higher scales of national assistance came into operation on 29th March 1965 and the number of wage earners’ families with an income below N.A.B. scales is likely to have increased. On 26th July 1965 in a written reply to a parliamentary question, Mr. Thornton, Joint Parliamentary Secretary to the Ministry of Labour, said that the number of families where wage-earners’ earned income was below the current N.A.B. scales was between 150,000 and 200,000, an increase of 50,000 families over figures given on 22nd February 1965.
The families of many unemployed men are also living below the N.A.B. scale level. In these cases the national assistance allowance is restricted so that the man does not receive more in allowances when he is unemployed than he would be likely to earn. Miss Herbison, Minister of Pensions and National Insurance, in a written reply to a parliamentary question on 26th July 1965 said that “at the end of June 1965, there were 14,710 unemployed persons receiving assistance where allowances were restricted by reference to their usual earnings. The approximate number of children involved is estimated at 60,000.”
National assistance allowances paid to families may be restricted for two other reasons. Families in private rented accommodation may not receive a full allowance to cover their rent because the Board’s officer does not consider the rent to be “reasonable in the circumstances”. The Report of the National Assistance Board for 1964 stated that at the end of that year there were 20,000 cases in which rent was not being provided for in full.
The allowances paid to supplement sickness benefit may also be restricted so that recipients do not receive a higher income when off work through illness. It is not known how many people are affected in this way.
Finally there are families who do not receive national assistance, although the head of the family is not working, because he is already receiving in national insurance sickness or unemployment allowances as much as the N.A.B. would allow. In many of these cases the family income is nevertheless below the N.A.B. scales, but no figures are available of the number of families affected in this way.
If we consider these different categories of poor family together, it seems that there are probably at least half a million (500,000) dependent children in families where the income is less that that allowed by the N.A.B. scales. The number may in fact be much greater.
A report about to be published (December 1965) presents new evidence of the dimension of poverty. (“The Poor and the Poorest: A New Analysis of the Ministry of Labour’s Family Expenditure Surveys of 1953–4 and 1960” by Professor Brian Abel-Smith and Professor Peter Townsend.) This shows, first, that the proportion of the population with an income below or just above the national assistance scale rates increased between 1953/4 and 1960 and, second, that as many as 30 per cent of those living at this standard were children. In 1960 approximately two-thirds of a million children were living in households with incomes below the scale rates and more than another 1 ½ million in households with incomes only just (from 1 to 30 per cent) above the scale rates. The great majority of these children were in households where the head was in full-time work.
This report is very disturbing, particularly since it is based on data collected for official purposes. We hope that the Government itself will make available for later years the kind of information given in the report. Since 1960 (the latest year to which this study refers) there is little evidence to suggest that poverty has diminished. On the contrary it is likely that the number of children experiencing hardship has increased. Family allowances have not been raised. Ministry of Labour wage analyses do not suggest that those with the lowest wages have received larger wage increases that others in recent years.
The effects of family poverty
The amounts by which these families’ incomes fall below the present national assistance scales may vary from a few shillings to several pounds a week. A family dependent on the earnings of a man with a net wage of £10, paying a rent of £2.10 and having three dependent children under 5 and three between 5 and 11 years old, will have an income of 76/- a week less than the amount allowed by the National Assistance Board scales. A second family where the man was earning £11.10 per week and the rent was £3 per week would have an income 56/- per week less than that allowed by the N.A.B. scales. If the wage earner became unemployed, the National Assistance Board would probably limit the allowances to these families to a level which would leave their income about 15/- below that received when the man was working. This means that the income of the first family might then be 91/- below the figure allowed by the N.A.B. scales and that of the second family 71/- below.
If we consider these two families at a later stage, with three children between 5 and 11 years and three between 11 and 15 years, the first family (income £10 p.w. rent £2.10) will have an income of 109/- per week below N.A.B. scales and the second family (income £11.10 p.w. rent £3) will have an income 89/- below when the fathers are working, and probably 124/- and 104/- below when the fathers are not working.
Finally, if these families were living in private rented accommodation with a weekly rent of £4+, the amounts by which the family incomes would fall short of the N.A.B. scale allowances would be 139/- for the first family and 109/- for the second family when the fathers were employed, and 154/- and 124/- when they were unemployed.
Existence over long periods at this low income level places a heavy strain on parents, particularly when there is apparent affluence in society generally. The constant struggle to make ends meet can have a harmful effect on the quality of family life and, subsequently, on individual health and achievement. Some of those whose earnings are low are also limited in their ability to plan their expenditure and manage in the most economical way. Many social problems occur in situations where parents have to maintain a family on a below subsistence level income over many years.
There is evidence from recent research that the child in a large family is likely to be handicapped in a number of ways and that these handicaps are much more marked in poor families. Butler and Bonham’s report “Perinatal mortality” (1963) showed that from the second child on, there is a steady increase in the perinatal mortality rate and for the fifth and subsequent child the risk is more than 50% above the average for all births. A London County Council report on school pupils in 1959 (1961) showed that children from large families are below average for weight and size, and the amount by which they are below the average correlates positively with the size of the family. Douglas’s study of children born in 1946 (“The Home and the School” (1964)) showed that the child from a large family stands less chance than the child of a small family of going to an academically successful primary school, and, if he gets to one, less chance of being placed in the top stream when competing with children of the same ability. At 11 the chance of getting to a Grammar School is closely related to the family size and, as the Crowther Report showed, the probability of leaving school at the minimum leaving age of 15 rises progressively as the size of the family increases. It seems likely that it is the association of poverty with the size of family which is largely responsible for these disabilities. Poverty undermines the health of expectant mothers and, through inadequate diet and overcrowding, the health of children. The pressure to leave school and start earning at 15 is greatest in families whose normal income is insufficient to cover essential needs.
The latest Report of the National Food Survey (referring to 1962) shows that certain groups of households were not reaching the nutritional levels recommended by the British Medical Association. Although it is not easy to measure nutritional “needs” scientifically, the Report shows that some groups of households in Social Classes B and C, namely those with three children, and with adolescents and children, had diets which on average contained significantly less calcium and protein than is recommended by the B.M.A., and one other group of households in all social classes, namely those with four or more children, had diets which contained less calcium, protein and energy value than is recommended by the B.M.A. These groups of households accounted for 33 per cent of the children in the sample.
An independent report published in 1962 (“Nutrition in Britain”, by Dr. Royston Lambert) has drawn attention to this evidence of widespread “under –nutrition” as measured by the National Food Survey. Despite the publication of this report and public concern expressed at the time no attempt seems yet to have been made by the National Food Survey Committee to explore the facts behind the averages and show how many and what kind of households fall seriously below recommended nutritional levels. The reports of the food survey suggest that there may be a problem of considerable magnitude. They certainly show that the dietary intakes of households of all social classes with four or more children are markedly inferior to those of other households.
The alleviation of family poverty
The poverty of large families, with its resultant disabilities, is at present eased slightly by the provision of free school meals and welfare foods for the under-fives. These provisions focus directly on the needs of mothers and children and we believe that they should remain part of our social services and that families should be encouraged to take advantage of them. But these measures of material assistance are not sufficient to meet the present problem. It is necessary to find a way to increase the income of poorer families with dependent children, both when the head of the household is employed and unemployed. We believe this can best be done by increasing family allowances or by making some modification of the child tax allowances that will benefit poor families.
Our proposals may be criticised on the grounds that they might encourage increases in family size. In fact, there is little clear evidence about the effect of family allowance on the birth rate. However, if the risk of encouraging increases in family size through child allowances is regarded as serious, we put forward two possible ways of countering it:
a) Assistance in family planning could be made more freely available within the National Health Service.
b) Any increased child allowance could be delayed until the child is 12 months (or even 24 months) old, so that the parents would have to wait a considerable time before they had this benefit. At the same time, we would recommend that an increased maternity allowance be paid for all confinements.
However, it cannot be stressed too strongly that it is wrong to try to discourage parents from having more children by penalising those already born.
At present there are two main ways, apart from educational grants, of assisting financially families with dependent children; namely, family allowances and child tax allowances. The way these affect families with weekly earnings of £10, £18 (roughly the current average industrial earnings figure for a man) and £30 per week is shown in Table I for families with from one to six children under 11 years. The figures are based on 1965/66 income tax rates but do not take into account the small changes in personal allowances made by the Finance Bill, 1965.
No. of children Annual value of allowances with earned income of:
£10 per week £18 per week £30 per week
1 12. 8. 0. 44. 3. 6. 47. 8. 9.
33. 4. 0. 94. 19. 6. 109. 9. 9.
3 59. 4. 0. 147. 1. 6. 174. 5. 3.
4 85. 4. 0. 188. 5. 6. 239. 9. 0.
5 111. 4. 0. 214. 5. 6. 304. 12. 9.
6 137. 4. 0. 240. 5. 6. 367. 4. 9.
At present there is a marked disparity between the assistance provided through statutory allowances to poor and well-to-do families. The problem of family poverty can be met by reducing this disparity and extending similar assistance to all children. This can be done either by replacing the present double system of allowances by a single family allowance or by retaining the present system and giving financial assistance through child tax allowances to families at all levels. Two alternative proposals of this kind are set forth below.
Our first proposal is to abolish the child tax allowance and replace the existing family allowance by a tax-free allowance of 10/- for the first child, 25/- for all subsequent children under 16 years and 35/- for Any child over 16 undergoing full-time education, Table II compares the income that families with wage earners of £10, £18 and £30 p.w. would receive through family allowances under this proposal in comparison with what they receive at present as shown in Table I.
No. of children Annual value of allowances with earned income of:
£10 per week £18 per week £30 per week
Present system Proposed F.A. Present system Proposed F.A. Present system Proposed
1 £12 £26 £44 £26 £47 £26
£33 £91 £95 £91 £109 £91
3 £59 £156 £147 £156 £174 £156
4 £85 £221 £188 £221 £239 £221
5 £111 £286 £214 £286 £305 £286
6 £137 £351 £240 £351 £367 £351
It is assumed that all children are under 16 years.
Our alternative proposal for channelling help to the large family with low income is that the benefit of the tax allowances should be extended to those below the tax paying level. This could be done by a simple adaptation of the P.A.Y.E. machinery. At present this machinery is used to collect tax on the excess of the taxpayer’s income over his total allowances. If the allowances exceed the income, no tax is payable but the excess allowances are “wasted”. In such cases, the machinery could be put into reverse and used to pay “Tax Adjustments” calculated at the normal tax rates on the excess of allowances over income. As a simple example, let us take a man with a wife and three young children, earning £10 a week. Including family allowances his annual income would be £567. His tax allowances would be:
Personal allowance £340
Child allowance £345
Earned income allowance £126
£567 of the tax allowances are needed to reduce his tax liability to nil, leaving £244 to be used as the basis of a Tax Adjustment payment, calculated as follows:
100 x 4s. £20. 0. 0.
144 x 6s. 43. 4. 0.
244 £63. 4. 0. or 24s. per week
This would be added to his weekly wage packet and recovered from the Inland Revenue by his employer (normally by deducting the Tax Adjustments from the P.A.Y.E. deductions and paying over the difference). For those not in work the system could be operated by the local employment exchange or National Insurance Office in place of the employer.
In Table III we show how Tax Adjustments would affect the families whose present position we have examined above. It is assumed that family allowances for all children including the first are raised to 10/- a week (the rate at present applicable to the third and subsequent children) and that the tax allowance (now £115 for each child under 11) is abolished for the first child and raised to £175 for the second and third children. For the sake of simplicity no account is taken of the grading of allowances by age and the allowances are shown to the nearest £1.
No. of children Annual value of allowances with earned income of:
£10 per week £18 per week £30 per week
Present system Proposed Tax Adj. Present system Proposed Tax Adj. Present system Proposed
1 £12 £22 £44 £18 £47 £18
£33 £79 £95 £102 £109 £108
3 £59 £149 £147 £174 £174 £197
4 £85 £205 £188 £219 £239 £262
5 £111 £270 £214 £264 £305 £328
6 £137 £336 £240 £318 £367 £392
It should be stressed that these figures are only illustrative. There are many possible combinations of tax allowances, family allowances and tax adjustments, and the particular combination chosen would depend on the extent to which it was desired to concentrate help on families of particular ages and composition.
The figures for family allowances and child tax allowances in our examples have been taken partly to illustrate how the poverty of low income families may be alleviated by a redistribution of allowances within the present system. It is believed that this could be done as shown, with relatively little additional cost to the Exchequer, and the cost could be further reduced by limiting the value of the child tax allowance for surtax payers for whom it may at present be as much as £2 per week per child. It is, however, difficult for us to give accurate estimates of cost because the figures necessary for calculation are available in Government departments only.
As a further step towards meeting the cost of these proposals, we propose that family allowances be financed partly from contributions, although they should continue to be paid, as at present, without regard to contribution records. This would mean that the costs were met not simply by redistribution of income among families with children as above, but that all earners would contribute to a fund from which in the long-run all would benefit, since the future wealth of the nation depends on the health and welfare of the child population. It might also make it easier to vary the allowances with changes in insurance benefits. Moreover, there seems to be some evidence that a contributory family allowance is more valued by recipients than one they pay for through taxes alone.
We are aware that Her Majesty’s Government is reviewing our system of social security and welfare services, and therefore wish to put these proposals forward at the present time. These families and their children are not able to present their own claim for consideration and their needs are in danger of being overlooked in consequence. Nevertheless, to ignore their situation is to leave a very large number of children in conditions of stress which is likely to have long-term effects in limiting their subsequent contribution to the community and in increasing their demands on social services. We do urge that consideration be given by H.M. Government to this problem and the remedies proposed.
Child Poverty Action Group
207 Marylebone Road
Three examples of family poverty
Mr. and Mrs. B. have eight children aged 1, 3, 5, 6, 7, 9, 11 and 14 years. Mr. B. works as a coalman and earns £12 per week. The family receives £3 8s. in family allowances, bringing their total income to £15 8s. From this they pay £2 4s. weekly in rent.
The N.A.B. scales for this family would give a total figure of £17 5s. 6d. plus a rent allowance, i.e. £19 9s. 6d. At present the B’s are trying to manage on an income which is £4 1s. 6d. per week below that given by the N.A.B. scales.
Mr. D. is a lorry driver with a net wage of £14 per week. He has a wife and seven children, aged 13, 12, 11, 10, 7, 5 and 2 ½ years old. Mrs D. draws £2 18s. family allowance making a total weekly income of £16 8s. They live in a local authority flat for which they pay £3 13s. per week rent.
N.A.B. scale allowances for this family, including full rent allowance, would amount to £20 2s. 6d. The family is thus very considerably below scale. Their flat is barely furnished; the bedrooms contain no equipment other than beds which Mr. D. has made himself. The children have free school meals, even during the holidays, but Mrs. D. finds it hard to feed the family on the remaining money after the rent is paid. They go short of meat, green vegetables and fruit.
From the North-West
The J. family consists of father, mother and four children aged 6, 8, 12 and 15 years. Mr. J. works as a labourer and earns £9 5s. per week after deductions. The rent is £1 15s. per week.
John, who is 15, left school a few months ago but is disabled and has not yet been able to find work. He is not entitled to either family allowance or national assistance. The total for this family is therefore £10 3s. The comparable figure given by the N.A.B. scales for a family of this composition and including a full rent allowance is £14 1s. 6d.
Abel-Smith, B. & Townsend, P. “The Poor and the Poorest: a new analysis of the Ministry of Labour’s Family Expenditure Surveys of 1953–4 and 1960”. Occasional Papers on Social Administration No.17, Bell, 1965.
Butler, N. R., and Bonham, D. G. “Perinatal Mortality: First Report of the 1958 British Perinatal Mortality Survey”. Livingstone, 1963.
London County Council. “Report on the Heights and Weights of School Pupils in the County of London in 1959”. L.C.C. Publication No.4086, 1961.
Douglas, J. W. B. “The Home and the School: a study of Ability and Attainment in the Primary School“. McGibbon & Kee, 1964.
Lambert, Royston. “Nutrition in Britain”. Occasional Papers on Social Administration No.6, Bell, 1962.
The Child Poverty Action Group
Brian Abel-Smith – Professor of Social Science & Administration, London School of Economics.
Walter Birmingham – Warden, Toynbee Hall, E.1.
M. F. Bligh (Mrs.) – former Children’s Moral Welfare Worker.
Barbara Drake – Children’s Officer, Tower Hamlets.
Elizabeth Gittus – Lecturer in Social Science, Liverpool.
Audrey Harvey (Mrs.) – author of “Housing in the Sixties” and Citizens’ Advice Bureau Worker.
A. F. Philp – Secretary, Family Service Units (Chairman).
Geoffrey Rankin – Fieldwork Organiser, Islington & N. London Family Service Unit.
Morna Smith – Assistant General Secretary, Social Services Dept., National Association for Mental Health.
Peter Townsend – Professor of Sociology, University of Essex.
John Veit-Wilson – Sociologist.
Harriett Wilson (Mrs.) – Lecturer in Social Science, Cardiff.
Stephen Wyatt – Fieldworker Organiser, Oldham & District Family Service Unit.