Poverty in the UK is increasing after two years of heavy welfare cuts have helped to push hundreds of thousands of people below the breadline, according to an independent study of the coalition government’s record.
Although middle-earners saw incomes rise marginally after 2013, policies including the bedroom tax and below-inflation benefits rises have reduced incomes for the poorest, pitching an estimated 760,000 into poverty since the last official figures were produced, according to the New Policy Institute (NPI) thinktank.
Child poverty showed the biggest increase, with 300,000 youngsters moving into hardship, reversing a fall in the headline figure recorded in the coalition’s first year. NPI estimates 29% of UK children are in poverty after housing costs.
The study challenges Tory claims that child poverty has been reduced by 300,000 on the coalition’s watch. While that figure is officially correct, NPI says, the data on which it is based only applies to the three years between 2009 and 2012.
“The clear conclusion is that poverty in the UK is rising among all age groups,” the NPI’s research director, Tom MacInnes, told the Guardian.
“The trajectory over the second half of the coalition’s term has been a bad one. The next government, whoever wins next week, will be dealing with worsening, deepening poverty.”
NPI undertook the study after the government refused to bring forward the publication of official data which would have shown the impact on poverty figures of the major welfare reforms introduced in 2013, and enabled the coalition’s record to be properly scrutinised before the election.
Official poverty data for 2013-14 will not be published until June, while figures showing the coalition’s record in the final year of the parliament will not be available until June 2016.
Alison Garnham, chief executive of the Child Poverty Action Group charity said:
“This important analysis shows the weakness of the claim being put about by ministers that they have got child poverty down despite making wide-ranging and deep cuts to benefits and tax credits.”
Responding to the report, a Conservative spokesman repeated the claim that there were fewer people in poverty compared to 2010.
“The truth is that the best route out of poverty is work, and there are now a record number of people in work – 2m more since the last election and 700,000 fewer workless households.”
Labour’s shadow welfare minister, Helen Goodman, said:
“This report shows that increasing levels of poverty under this Tory-led government are leaving millions of families struggling to make ends meet.”
Child poverty fell in the first year of the coalition, under the tax and benefits framework inherited from Labour, and remained stable for two years as median incomes fell, the study says. It started to rise again after April 2013 when a series of benefit cuts were introduced, alongside increases in tax allowance.
The median weekly income fell from £425 in 2009-10 to £392 in 2012-13, inching up to £395 by the end of the parliament, says NPI, largely as a result of increased tax allowance and rising employment. But the weekly income of the poorest 10%, which was £174 five years ago, has fallen to £160.
The upward trend in relative poverty over the past two years has affected all groups, the study finds, including working families and pensioners, while the numbers of people identified as being in severe poverty also rose.
The Child Poverty Act requires the government to reduce relative child poverty to below 10%. Latest official figures, which differ from the NPI model in that they measure poverty before housing costs are taken into account, show that 17% of children are below the breadline.
Labour says it will keep the target, though admits it is “very unlikely to be met”.
The Conservatives say they will “work to eliminate child poverty”.
The Institute for Fiscal Studies has estimated that child poverty will rise to 23% by 2020.
A person is defined as in poverty if their household income is below 60% of the median, while “deep poverty” refers to people in households where income was less than 50% of the UK median.
The study, using a model developed by NPI, estimates income and poverty levels for 2013-14 and 2014-15 using 2012-13 data adjusted for changes in population, employment, earnings, benefits and prices.
According to NPI, the government said the decisions on publication dates were not political. But a spokesman for NPI said:
“Given the significance of recent policy changes and welfare reform to the poverty landscape, not publishing official statistics before the election is also political”.
Source – The Guardian, 29 Apr 2015
Shocking research published today reveals a sharp rise in the number of under 25’s and working people living in poverty in the UK.
The latest poverty and social exclusion report, written by the New Policy Institute (NPI) in partnership with the Joseph Rowntree Foundation (JRF), shows how under 25’s and people in work are now more likely to be living in poverty than pensioners.
There are now around 13 million people living in poverty in the UK, with half of those coming from a working family and 1 in 5 are working age adults without children.
In stark contrast pensioner poverty has fallen to a record low under the coalition, according to the report. The decline in pensioner poverty is attributed to targeted government support aimed at protecting older people from the worst austerity cuts.
A changing labour market and the prevalence of zero-hours contracts, part-time work and low-paid self-employment means that moving into employment is no longer a guaranteed route out of poverty.
According to the report, there are around 1.4 million zero-hours jobs that do not guarantee a minimum number of hours. Over half of these are in retail, admin, accommodation or the food and restaurant sector.
Around two-thirds of unemployed people who moved into work over the last year are paid below the living wage. And only a fifth of people in low-paid jobs have escaped poverty wages completely within 10 years, according to the report.
Incomes are lower on average than they were a decade ago with the very poorest taking the biggest hit. For the lowest paid men, their hourly pay has fallen by a shocking 70p per hour, while women have seen their hourly rate fall by 40p per hour.
The prospects for self-employed people isn’t any better either, because analysis shows they earn 13% less than they did just 5 years ago.
Failure of the welfare system means Jobseeker’s Allowance (JSA) claimants on the government’s controversial Work Programme are more likely to be sanctioned, or have their benefits docked/cut, as they are to find a job through the back-to-work scheme. And 60,000 disabled people are having to wait 6 months or more for their sickness benefit claim to be fully processed.
The report also highlights a ‘welcome’ drop in the number of people classed as unemployed. However, Welfare Weekly recently reported that as many as 500,000 job seekers could be ‘disappearing’ from official unemployment figures, due to cruel and unjust benefit sanctions.
Children in receipt of free school meals fail to attain five ‘good’ GCSE’s, highlighting a lack of social mobility among children from poorer families.
The report also reveals more people living in poverty in private rented housing. There are now as many people living in poverty in the private sector as in social housing, according to the report. Private landlord repossessions are now more common than mortgage repossessions – 17,000 compared to 15,000 in 2013/14. Private landlord repossessions are the most common cause of homelessness in the UK, say JRF.
Julia Unwin, Chief Executive of JRF, said:
“This year’s report shows a real change in UK society over a relatively short period of time. We are concerned that the economic recovery we face will still have so many people living in poverty. It is a risk, waste and cost we cannot afford: we will never reach our full economic potential with so many people struggling to make ends meet.
“A comprehensive strategy is needed to tackle poverty in the UK. It must tackle the root causes of poverty, such as low pay and the high cost of essentials. This research in particular demonstrates that affordable housing has to be part of the answer to tackling poverty: all main political parties need to focus now on providing more decent, affordable homes for people on low incomes.”
Tom MacInnes, Research Director at the NPI, said:
“This report highlights some good news on employment – but earnings and incomes are still lower than five years ago, and most people who moved from unemployment into work can only find a low paid job. Government has focussed its efforts on welfare reform, but tackling poverty needs a wider scope, covering the job market, the costs and security of housing and the quality of services provided to people on low incomes.”
TUC General Secretary Frances O’Grady said:
“This report highlights once again how ordinary working people are being excluded from the recovery and are becoming poorer in real terms.
“Our economy has become very good at creating low-paid, insecure jobs which are trapping more and more families in working poverty.
“The situation looks particularly bleak for young people – many of whom face decades of private renting and diminished career prospects.
“Without more affordable housing and quality employment opportunities, living standards for the many will continue their steep decline.”
A Government spokesman said:
“The truth is, the percentage of people in the UK in relative poverty is at its lowest level since the mid-1980s and the number of households where no-one works is the lowest since records began.
“The Government’s long-term economic plan is working to deliver the fastest growing economy in the G7, putting more people into work than ever before, and reducing the deficit by more than a third.
“The only sustainable way to raise living standards is to keep working through the plan that is building a resilient economy and has enabled us to announce the first real terms increase in the minimum wage since the great recession.”
> By the end of the statement, Government Spokesman’s nose had grown several inches longer…
Source – Welfare Weekly, 24 Nov 2014