Deborah Orr: The crime equation: spend more money on welfare, and less will be needed for prisons

It was hardly a social exposure on the scale of the New Orleans flood. But the Farepak collapse was still a jolting reality check, revealing British life on the breadline not as feckless and contemptible, but as cautious and careful.

When I was little, all the shops had year-round signs exhorting people to join their Christmas clubs, clubs I wistfully presumed it would be great fun to be in. One thinks such traditions have disappeared, along with "the respectable working class". In truth, as reports that many people are too poor for banks to be interested in their tiny savings attest, such ways have just dropped out of the sight of the credit-card-waving mainstream.

The launch this week of a new campaign from the Save the Children fund, offers further salutary glances into micro-scrimping Britain. Proposing seasonal government grants of £100 in summer and winter for the poorest families, Save The Children has commissioned a survey of 1,500 parents on low incomes. Again, it reveals lifestyles that are highly circumscribed.

About 85 per cent of respondents cited bills, clothes and nutritious food as the most expensive items related to bringing up a child, with two-thirds saying they often go into debt to make ends meet. The crises some of them mentioned as being highly disruptive of the family finances were modest - such as a washing machine breaking down, or the children needing new shoes. Nine out of 10 said they went without to provide for their children, and one-third said their financial circumstances created stress in their family relationships. Almost 10 per cent admitted they had resorted to borrowing from doorstep lenders.

No wonder. While the Government has famously committed itself to eradicating child poverty by 2020, the numbers many people juggle in their domestic economies are pitifully slight. The Government's official poverty level is 60 per cent of median income, and 3.4 million children fall into that category. Save the Children calculates that 1 million of those live on less than 40 per cent of median income - that aggregates as a single parent with two children living on £124 a week. I often spend that on babysitting.

And while Save The Children's remit concerns itself, by definition, with the welfare of minors, the very fact that government investment in benefits has centred on outcomes for children - in "hard-working families", on Sure Start programmes, on baby bonds and so on - suggests an underlying belief that the poor have only themselves to blame. Only the children are to be looked upon kindly, for the adults are not innocent.

Partly this is due to an almost Jesuital belief in the idea that early intervention can radically change the course of a child's life. When a childhood is actually abusive - and extreme poverty can be experienced as a kind of abuse - this is true. Nevertheless, the darker side of the theory debouches into a feeling that adults are way beyond help. It follows that offering it to them is simply rewarding them for their personal failings - a wasteful investment in the "dependency culture" that neo-liberal economies fear so heartily.

Yet such views are extremely punitive, and there is persuasive evidence that they are punitive in an awesomely literal way. It is in the countries most committed to what British-based criminologists Michael Cavadino and David Dignan describe as "minimal and residual, mainly means-tested benefits with stigmatised entitlement" that prison populations are highest. Research by the men confirms there is "an almost watertight divide between the different types of political economy as regards imprisonment rates" in a study of 12 contemporary capitalist countries.

The different types of economy Cavadino and Dignan refer to were defined by the Swedish thinker Gosta Esping-Anderson, in his 1990 book The Three Worlds Of Welfare Capitalism, as the social democratic model (typically Scandinavia), the corporatist model (Germany, Italy, France) and the neo-liberal model (the US and the UK), by the "degree to which people could maintain acceptable living standards independent of market participation".

Cavadino and Dignan have added a fourth category, Oriental corporatism, typified by Japan. Though slightly anomalous, its inclusion does nothing to upset their basic observation - that neo-liberal economies generate high levels of imprisonment, and social democratic economics generate low ones. Cavadino and Dignan reject the idea that neo-liberal economies are in themselves "crimogenic", though they note that in an economy that emphasises individualism and reduces social cohesion this would be unsurprising. Instead, they argue that the phenomenon is driven by cultural attitudes. Put simply, in neo-liberal society economic failure is seen as being "the fault of the atomised", so they are left to sort out their difficulties in whatever way is open to them. Except, perhaps, if they are children.

If this all sounds rather too esoteric to be helpful, then a new publication from think-tank the Crime and Society Foundation makes matters more explicit. Examining research across US states, then replicating it across 18 OECD countries including the UK, the foundation has found an intimate link between the amount of welfare spending and the level of imprisonment. The seven countries with the highest imprisonment have the lowest rates of welfare spending, while the eight with the highest welfare have the lowest imprisonment rates.

Again, the relationship is clear but complex, with high-spending regimes seeking to address the social problems that might be causing marginality, and exclusionary low-spending regimes laying responsibility for social problems in the hands of the socially marginalised. The overwhelming indication is that welfare cutbacks imply penal expansionism, and the relationship between the two has become stronger over the past 15 years. This can be seen most clearly in the US, where the trend towards mass imprisonment over the past two decades has been accompanied by ever-greater restrictions on welfare rights for the poorest families.

Unhappily, the great exception is Britain, which has in recent years managed to increase welfare spending while simultaneously achieving new records for incarceration.

There may be a variety of reasons for this, including the distorting inclusion of Private Finance Initiative money in the overall welfare figures, and the cumbersome vehicles of welfare delivery that are so obsessed with targeting the deserving that they cost a great deal to implement. The latter, for sure, is all part and parcel of that punitive idea that the poor are at fault, and should not be rewarded for it. Though £37,000 a year on keeping them in prison also looks rather extravagant and counterproductive, in comparison to an extra few quid to keep the wolf from the door on the outside.

d.orr@independent.co.uk