Rising living costs and poorly-paid jobs are at the heart of poverty in the UK, says Helen Barnard.
With less than three weeks to Christmas, many people will be planning their Christmas dinner and splashing out on extra goodies this week. Today’s report from the All-Party Parliamentary Inquiry into Hunger highlights the situation of those who struggle to afford day-to-day food, let alone more expensive festive fare. The report explores the reasons behind rising hunger. Many of its findings are backed up by JRF evidence. Three issues highlighted in today’s report are: the rising cost of essentials; low pay and poor-quality work; and problems in the benefits and tax credit system.
Our research shows that since 2008 the cost of essential goods and services has risen by 28 per cent. This has a disproportionate impact on low-income families as essentials make up a far larger proportion of their spending. This is why, over the last 10 years, low income families have seen their cost of living rise by 50 per cent – far more than inflation for better-off families. Our research has shown that markets need to be made to work more efficiently and more fairly for people on low incomes. The Hunger Inquiry rightly calls on regulators and businesses to fix this.
The second issue highlighted today is that incomes have not kept up with this steep rise in prices. Since 2008, the minimum wage has risen by 14 per cent, average wages by 9 per cent and the value of in- and out-of-work benefits has fallen. Our recent state of the nation report shows three fifths of people who moved from unemployment into work in the last year were paid less than the living wage. The Hunger Inquiry report finds that up to a quarter of people using food banks were in low-paid work, with some food banks reporting that over half of their users were working. Our research into the future of the UK labour market has demonstrated that considerable improvements are needed in the quality of jobs at the lower end of the jobs market if work is to become a reliable route out of poverty.
Government policy has attempted to ease the pressure on low-income working households, but reductions in tax have been outweighed by freezes and reductions to in-work benefits and tax credits. Last week’s Autumn Statement was an opportunity to change this. But instead the Chancellor chose to continue the damaging freeze on the Work Allowance (the amount someone can earn before benefits start being withdrawn) and reiterated his commitment to freezing working-age benefits for another two years.
The Hunger Inquiry report highlights a number of ways the benefit system pushes people into difficulties, including delays in payments and the misuse of sanctions. Our research has also raised concerns about the impact of sanctions and of other changes to the system which undermine its role as a safety net.
Next year, JRF will be publishing its first anti-poverty strategy for the UK, setting out how we believe the these three critical issues can be tackled. This is not simply a task for government, but one we all have a stake in. We urge the Government, all political parties, business, employers and the voluntary sector to take action now to address the poverty which today’s report has laid bare.