I attended the APPG on Child Poverty this week, chaired by the Lord Bishop of Durham. It was attended by some Lords, Lord Listowel and Baroness Ruth Lister because all the MPs were squabbling in the chamber of the Houses of Parliament over the legal standing of Brexit.
The implications of austerity on poverty increase was presented in graphic detail. The lack of acknowledgement to this problem from so many Ministers and MPs while they beat their breasts about whether they can support the Prime Minister or not is depressing.
Alison Garnham from CPAG opened the APPG with a quote from a letter to Prime Minister Harold Wilson, written in 1965:
“The existence of poverty in this country today tends to be overlooked and, indeed, denied. Poverty affects the health and welfare of growing children. It creates long-term social problems. We are sure you are already convinced of the need to support the family and care for the dependent child; but we wish to draw your attention to the special problem of family poverty and to urge that action be taken by Her Majesty’s Government to alleviate it at the earliest possible moment.”
So it felt like a modern take on Nero, replace fiddling for squabbling and Rome for a burning London.
The report A New Measure of Poverty for the UK from the Legatum Institute tells an unambiguous story. The new measure is necessary to hold people, organisations and the establishment to account. It also better identifies those in poverty in particular families with small children, those working with school age children and pension age families. It is shaped to:
- Take account of all material resources not just income (any available assets the family may have).
- Account for the inescapable cost some families face such as childcare, extra costs of disabilities, rents and mortgage costs.
- Broaden the approach of poverty measurement to include an assessment of housing adequacy for example by counting people who are living rough as in poverty.
- Position the measures of poverty within the wider measurement framework which allows us to understand more about the nature of poverty in the UK.
The findings from the report are pretty depressing especially when you consider the impact of poverty on people and society. The rise in child poverty shows no sign of slowing. Here are the headlines from the report which correlate with the findings from CPAG:
- 14.2 million people in the UK are in poverty. 8.4 million working age adults. 4.5 million children and 1.4 million pension aged adults.
- Children under five most likely to be in poverty with highest is among families with children under one year.
- 7.7 million people are living in persistent poverty. That means living in poverty for four years or more.
- Persistence rates of poverty are highest for families with children.
- More than 6 in 10 working age adults who live in families are more than 10% below the poverty line.
- Poverty gap is growing with people £60 per week below the poverty line on average
- Of the 14.2 million in poverty, 48% are living in families with a disabled person
- 13% of children in working families are in persistent poverty and 48.7% of workless families.
- Poverty rates among pension aged people has halved since 2001 down to 11.4% in 2017.
- There are 2.5 million people less than 10% above the poverty line and with relatively small changes to their circumstances can fall into poverty.
- There is a resilience gap between those in poverty and those not in poverty.
The debate was lively about the factors that are contributing to the continual growth of child poverty with an anticipated further 1 million families to add to the poverty statistics by 2020. The worse situation is the numbers of people who work and are in poverty.
6 in 10 working age adults who live in families are more than 10% below the poverty line is a pretty dire statistic especially when we have created an economy that requires both parents to work. If you are working and poor, how do you get out of it?? 75% of mothers work. The choice to not work when your children are small is limited. The workplace is shaped by many economic and political decisions over the years which have had quite unexpected and unintended consequences which include widening workforce participation, lower wages, zero hours contracts, reliance on immigration, higher rents and living costs.
In the meantime, costs keep rising, wages are stagnant are reducing and people in work are poorer. This poverty is not due to fecklessness or poor management as some would have us believe. The costs are high. It generally costs £150k to raise a child by age 18. Childcare is expensive, and the Government has failed to discharge its duty to the UK families and taxpayers by short-changing everyone on the 30 Funded Hours, tricking parents into believing that this will reduce their fees substantially. It’s not doing that except for the top earners. For those on the poverty line or below it, the tax relief through funded hours and the direct subsidy is insufficient. Those Mrs May called “just managing” are most likely to tip into poverty as their don’t have a safety net in the form of savings secure rents, or access to cheap loans for emergency purchases.
Our market place is being shaped by insecure jobs, increased employer costs, pressure for higher returns, overseas investors calling the shots and those at the edge are most vulnerable.
The Universal Credit is causing significant problems. We have £40 billion less to spend on helping to shore up poverty. 75% most affected by the benefit cap are single parents and families with children with child under five. If your child is under two then you are 66% negatively affected by benefit cap.
There appears to be no solutions only compounding factors. In fact, there is a policy vacuum. In Early Years, where poverty is highest there is no long-term Early Years strategic plan. There is talk about social justice but no action.
There is the national living wage and the London living wage but too many employers are managing to avoid this. I am an employer and I understand the challenges of balancing income against staff costs so we keep afloat but there are lots of very large companies out there prepared to pay their senior executives huge salaries and pay offs when they could redistribute dome of that to their lower incomes families and reduce their dependence on zero hours contracts. We need to think about housing and what we do to make rents affordable and secure, that also included getting housing associations to do more. The Universal Credit has to be better managed with some added flexibility and a second earner work allowance for parents. The single parents work allowance could be boosted. These are just some ideas. The fact is that poverty affects us all in some way . It’s therefore important we open the conversation up to help people understand the complexities and interconnected issues.
Solving Brexit is important but so is addressing the issues emerging from an austerity agenda that is being paid for by the poorest and most vulnerable in our society.