Government and Institutions

The London riots were not caused by poverty

Gerhart Hauptmann´s 1911 novel „Die Ratten“ (Engl. „The Rats“), set in a deprived borough of Berlin, was a powerful critique of a concept of morality that ignored the conditions people live in. Its characters are not evil people, and yet despair and misery drive some of them to commit vile acts. There is a passage where one of the villains is asked whether he had no sense of decency, to which he replies that it is hard to uphold decency when one’s stomach is grumbling.

It was utterly predictable that the usual suspects would try to rewrite the London riots in Hauptmann-style, romanticising the rioters as the victims of poverty, inequality, as well as capitalism and consumerism more generally. The one looter who spoke on BBC radio on Wednesday morning, trying to justify his acts, phrased his excuses less eloquently than Seumas Milne did in the Guardian. But his statement that these were the acts of people who “come from nothing and got nothing” were apparently convincing to Yasmin Alibhai-Brown, who was interviewed a few minutes later and said the young man was “partially right”.

Except he wasn’t. Let’s have a look at the blight of those who “come from nothing and got nothing”. The standard rate of Income Support for a non-working single mother with one teenager is currently £562.60 per month. On top of that comes Child Benefit, currently at £87.97 per month, and Child Tax Credit at £168.90, assuming only the most basic rate. The rate of Housing Benefit depends on where she lives; it is £1000 per month in inner southeast London, £1213.33 in inner east London and £1256.67 in central London (which includes Camden and most of Hackney). Council Tax is also covered. This is at current rates, meaning after the ‘savage cuts’, and ignores other benefits which are a bit trickier to qualify for.

According to OECD figures, the UK spends 3.5% of GDP on family benefits, cash and kind. That is more than in Sweden, more than in Norway, more than in Finland, more than in the Netherlands, more than in Belgium, more than in Germany and more than in Austria.

These are just input figures. Looking at outcomes, data from Eurostat show that virtually every household in the United Kingdom can afford a washing machine, a fridge, a central heating, a TV, a telephone and, of course, a diet with meat, poultry or fish. That is more than the rich folks in Gerhart Hauptmann’s novel had.

A figure that keeps being cited is the 75% cuts in some youth services. The problem with that figure is that it depends on what exactly you define as a youth service. For example, the Borough of Hackney runs seven leisure centres providing a host of activities at subsidised rates. There are many special discounts, including for young people. But since they are open to all age groups, they are not, strictly speaking, a youth service provider.

It would be a ridiculous thing to say that there is no poverty in London, or that there are no real sources for frustration. But there is nothing which could, by any stretch of the imagination, relativise what has happened in London or other cities. Attempts to insinuate otherwise should be exposed for the cheap political opportunism that they are.

Dr Kristian Niemietz is the IEA's Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).

14 thoughts on “The London riots were not caused by poverty”

  1. Posted 12/08/2011 at 09:29 | Permalink

    Yes, it is all relative but, according to members of the public, the cost of a minimum standard of living for a lone parent with a child of secondary school-age is nearly £1,200 per month. That is the figure excluding rent and Council Tax but including: food & drink, clothing, water rates, insurance, fuel bills, household/personal goods and services, travel and social participation.

    Also, could you explain how you arrive at your figure of £562.60 per month in income support? The rate for the parent would be £67.50 per week and the rate (if any) for the teenager would depend on their age and status – which would also affect eligiblity for child benefit and CTC.

    Thanks, Chris.

  2. Posted 12/08/2011 at 10:36 | Permalink

    “Also, could you explain how you arrive at your figure of £562.60 per month in income support?”
    =(67.50 + 62.33) * 52 / 12

    “which would also affect eligiblity for child benefit and CTC”
    No. Unless that person has additional income or high savings, eligibility for CB and CTC is almost automatic.

    Regarding your “members of the public” figure: If you ask people in a sensible way what they think is really necessary, they give you sensible answers. The PSE survey did that, and people came up with a standard which is not spartan but reasonably modest. That´s why I don´t trust this Minimum Income thing. Why does it deviate so much from the PSE? Presumably because the participants have been encouraged to include just about everything. If you used this alleged Minimum Income as a poverty line, one in three households in the country would be poor. Does that appear plausible to you?

  3. Posted 12/08/2011 at 11:03 | Permalink

    The Minimum Income Standard is a fantastic step in the right direction of assessing what modern poverty in the UK is like. There are like all measures problems with it such as some of the items on the list which can be tailored to families via the calculator. But the greatest fundamental flaw is that you cannot assume is that is the minimum income required. It is the minimum expenditure required. 3% of families reporting low-incomes are in the top 10% of the expenditure and 28% are in the top 50%. The IFS did studies on this years back and it was not fuelled by debt. Families reporting low-income move up and down the income distribution; the self-employed and others do not declare their true earnings etc. So a move to an expenditure measure that Kristian advocates is welcomed to see what families are really spending to see whether .

    You cant get rid of poverty by giving people money as it may help them in the short term with material deprivation but all you do is create unemployment and poverty traps that are very difficult to over come; you can’t blame people if EMTR are 96%.

    A Negative Income Tax and complete decentralisation of Welfare that Thomas Chambers advocated is needed.

  4. Posted 12/08/2011 at 11:41 | Permalink


    I suspect the prices of basic things like food, transport etc has been rising. What does a journey on the underground cost these days? Also, direct taxation, such as council tax, tv license fees, airport tax (on holidays) etc. The poor also tend to smoke and drink more (assumption, I might be wrong), so they end up paying these consumption taxes.

    In one video, the lady doing the looting said, “i am getting my taxes back”. Could excessive taxation be behind the riots?

    Those government cuts are therefore more urgent than ever. Privatise the BBC, that would be one less bill for households.

    Best regards


  5. Posted 12/08/2011 at 11:50 | Permalink


    Could you please explain how you arrive at that figure, rather than simply attributing it to “members of the public”? That would add up to around £14,400 and I know working single mothers with children of that age who earn less and still seem to lead a fairly comfortable existence and do a good job of raising their kids. Yes they still get some financial support and they have to be reasonably careful with money. However, they are also paying some rent, some income tax and NI, some council tax, etc. etc. In one case, my friend made the decision to start working, at minimum wage, even though all considered she is about £200 a month worse off working than she would be on benefits. She did so because she was concerned that she was normalising joblessness for her sons and wanted them to grow up to be good, hard working adults and have aspirations, and she has my undying respect for that.

    She does not, however, live in anything that could be considered poverty by anyone who has ever seen real poverty. Her home is modest, but well furnished, clean; she feeds her boys, sometimes their friends (and occasionally me) well; the boys are always as well presented as boys of that age are and whilst they aren’t spoilt like some children are they have ample possessions and don’t go wanting for anything where school is concerned – uniform/coats/bags/etc. are saved for and bought new, as she remembers kids being bullied for having faded/worn/out of date things from when we were at school; they have a flat-screen TV, albeit an older model purchased second hand, a laptop with internet she got cheap with a mobile phone contract and the boys have recently bought a new games console (don’t ask me which, not my thing) with the pooled proceeds from the elder of them working as a paper boy and general helping hand at a local newsagents, and the younger doing chores for me and my wife, and my parents.

    Sure, many of their possessions are a bit old or second hand, but it is all well looked after and they are one of the happiest families I know. Extra money might make things a bit easier, but I think anyone who considers their lives to be below a “minimum standard of living” is an abject snob.

    Regards, Jim

  6. Posted 12/08/2011 at 12:06 | Permalink

    I don’t think poverty itself causes violence, but there is a lot of evidence that inequality does.–>

    Moreover, as Stefan Molyneux points out, British youth are coming into the world with none of the services they were promised and an enormous debt burden that will enslave them for their entire lives.–>

  7. Posted 12/08/2011 at 12:25 | Permalink

    I’m willing to agree with Kristian that these riots were not caused by “poverty”, at least not on any well thought out definition of the term. Could they not have been partially caused, however, by a lack of prosperity? Maybe the distinction is false, but I think that many young people today feel that they face an insurmountable task of acquiring useful skills, earning enough to look after themselves (never mind a family) and maybe having enough spare time and resources after that to pursue lesiure and other activites. Would anyone be interested in this kind of behaviour if they had confidence that their current quality of life would improve as they developed, learned, worked and saved?

    No one can be at all confident that sacrificing immediate consumption will ever lead to a more secure or happy life in the future. These people may have all of their basic needs provided for one way or another; they are probably wealthy enough to interact with their peers or “participate socially” also, but the cost of this is that they cannot in addition accrue wealth or have the confidence that such sacrifice will ever outweigh the disadvantages or lower social participation, harder work and self discipline. There is, in short, a complete lack of confidence concerning the future despite being well outside any meaningful defintion of poverty.

    Then again, some reports describe rioters who ostensibly have good futures to look forward to, law students, recent graduates from middle class backgrounds etc. In that case I may be either totally wrong, or else perhaps the feeling that I am trying to convey extends even further up the social hierarchy than many people would expect. Certainly having a degree is no longer a reason to feel good about the future!

  8. Posted 12/08/2011 at 13:49 | Permalink

    You can look at this in another way – it is still possible to blame relative poverty, social injustice or inequality for the riots, or at least for portion of the criminal underclass which carried them out. However, that ought not lead one into believing that the solution is more state aid: as you point out, there is already an extremely high level of state aid, which has failed to solve the problems of poverty. It is ridiculous to argue, as these people do, that additional contributions via the state would alleviate the problem, even if it were affordable, which it is not. Instead of an argument as to whether benefits are generous enough, I think we should examine the actual effects of such benefits.
    It is vital to observe that it is the very generosity of the welfare state which is the structural cause of the rioting – but I have heard this in very little of the commentary. The very existence of such a class of people is owing to the incentivisation by the state of those in society who are least well-equipped to have children to have them. The state is also busy destroying family and other social institutions which might support them (see the IEA’s work on this subject for one, and Katherine Birbalsingh’s comments on Today this morning). Such children, and even those of more capable parents, are then sent to appalling schools, over which they have no choice. Far from having any prospects once leaving school, the state subsidises long-term unemployment and by regulation and taxation destroys employment opportunities. Also, via social housing policy subsidises people to live in certain areas over which, again they have no choice. Further contributions come from the state’s policy towards drugs which creates an ideal market for drug gangs and gang warfare. In effect, the state has created a class of people with no jobs, education or expectations; and with no respect for property rights or codes of moral conduct, standards which they learn from the state. We oughtn’t be surprised they behave in the way that they do.
    Of course, now we have such a class of people we have to deal with the consequences – although I don’t think that the state is the means of doing so. Still, I think it’s time to admit that the welfare state has failed and needs – at the least – radical overhaul. Certainly what we do not need, even if it were affordable, is throwing of more money into the situation either directly via transfer payments, channelled through charity (private charity is different) or into authoritarian measures such as more policing which has also, clearly, failed. As for ‘cuts’ – they are deeply necessary; the fact that the generosity of the welfare state is unaffordable as well as, not only ineffective but actually worsens the effects it claims to solve, is simply another addition to the many arguments against the welfare state. The tragedy is that many intelligent, well-intentioned and compassionate people are so deluded as to think that the state can help.

  9. Posted 12/08/2011 at 15:19 | Permalink

    Thanks for the responses.

    – What does the £62.33 refer to?
    – I meant that the age of the teenager (13-19) would affect what benefits they and the household were entitled to.
    – You can’t have an income standard based on consumption that doesn’t cover all the items that people need. That is why it is impossible to deliver such a figure using a population survey. People are not ‘encouraged’ to include or exclude items – the figures are led by what people agree to be necessary and there are fierce debates in the groups about this.
    – You also cannot judge the validity of a measure just by the results you get – you have to base it on a theory about what you are trying to measure. We had no idea what the MIS level was going to be when we set up the research programme – nor can we alter it.

    – The full details of the research, which I should have referred to, apologies, can be found here:
    – Of course, many people have to get by on less. The point of the research is to provide a non-arbitrary measure of an adequate standard of living based on a consensus from members of the public (informed where necessary – for example on nutritional adequacy – by expert input).

    Thanks again.

  10. Posted 12/08/2011 at 16:37 | Permalink

    Yes, I think benefits causes people to lose their sense of motivation and entrepreneurship. People develop a handout mentality, and get accustomed to receiving handouts. It becomes habitual.

    Like a child, when the handout stops, the child throws a tantrum in the hope of getting what it wants.

    After an adjustment period, people will find other ways of making money.

  11. Posted 12/08/2011 at 18:51 | Permalink

    Thanks for that Chris, very interesting although somewhat baffling. Having just adjusted all the perimeters you can on the calculator to fit myself, it seems to think my (and my wife’s) outgoings should be quite a lot more than they actually are. If I were to exclude our charitable and political donations, almost three times as much – so I must say I remain very sceptical. I certainly wouldn’t have said I was poor, indeed I would have said I was very comfortable. I would have said I was quite careful with money, but not that much so – I do drive, drink (not at the same time of course), I also smoke and holiday abroad and so on and so forth! I will have to have a look at the full report when I have time. Regards, Jim

  12. Posted 15/08/2011 at 09:01 | Permalink

    JIM: Thanks for having a look at the calculator. Quite often, I think people forget to include the weekly average cost of less-frequently bought items, such as a fridge, which is why the budgets may seem high compared with what you consider to be your weekly outgoings (e.g. how much you spend in the supermarket each week).

    The full item breakdowns can be found here:

    Best wishes, Chris.

  13. Posted 15/08/2011 at 10:11 | Permalink

    £62.33 is the IS premium for a dependant. There are other top ups to IS but I’ve ignored them.
    I agree, of course, that you cannot suddenly change the methodology of the MIS just because the results look funny.

  14. Posted 15/08/2011 at 13:32 | Permalink

    KRIS: I don’t think that is correct. If the child is still at school then you would get Income Support for the adult and receive Child Benefit & Child Tax Credit on top. If the child has left school and is over 16 then you would not receive CB or CTC.

    Per week (as it’s easier and more normal to talk about it in those terms than per month) the total benefits for a lone parent and a child of secondary school age is: Child Benefit £20.30, Child Tax Credit £59.36 and Income Support £67.50. You seem to have double-counted by including the IS dependant rate as well as CTC. You would have Housing Benefit and Council Tax Benefit on top but these will just cover the costs of those two things (rent/Council Tax). Also, not everyone has a very high rent so that further distorts your figures.

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