First of all we shall disucss what we mean by ‘poverty’ and what we mean by ‘inequality’; then we shall need to discuss the book The spirit level, by Wilkinson and Pickett, because it has had such an important effect on current debate about inequality; and finally we shall need to ask what a Citizen's Income would do about poverty and inequality.

Would a Citizen's Income be an answer to poverty?

First of all, what is poverty? We shall consider two fictional people:

Edna lives in a turn-of-the-century local authority house. She lives on Income Support as her husband, who is now dead, worked in the building industry and never paid National Insurance Contributions. She is now sixty, she belongs to pottery and singing classes at the local adult education centre, her children – all of them in low-paid employment and sometimes unemployed – come to see her once a week, and she tells her grandchildren about family hop-picking holidays spent living in wooden sheds and working from dawn to dusk in the fields. She will tell you how her mother helped to start the local co-op, and how she now has rheumatism but still enjoys visiting her old school at the end of the road: though it is now very different from the way it was when she left it at fourteen to work in a shop.

And there is Paul, thirty, who works in the design industry. He is single; his flat is worth 80 per cent of the mortgage and he can just about keep up with the payments; and he earns £30,000 a year, but he is not sure how long his job will last. He has a first-class degree and a master's degree, but his field is being taken over by younger people who can cope with computers better than he can. He is depressed, he never has any money, and he has started to drink too much.

Which of these two people is poor? Which of them is in poverty? The local authority tenant on Income Support who left school at fourteen? Or the owner-occupier who earns an above-average salary and has two degrees.