Society: The UK Government is making a feast out of poverty

Let them eat hardship

If a rising level of poverty was a sign of success, then the UK Government would be flying high on its policies. As it is, a number of reports recently show that more people than ever are struggling to make ends meet – with even more to come

By Mark Cantrell 

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THE UK Government may be floundering over Brexit and making the country a by-word for buffoonish incompetence, but there is one area where its policies are proving a resounding success – poverty.

Sadly, it’s not the kind of success that ministers can praise to the rooftops – well, not in so many words, at least – because far from alleviating hardship, the Government’s policies have only served to make a bad situation worse.

What’s more, rising poverty has been the entirely predictable outcome for many of its policies. Indeed, it has been warned of this time and time again.

This rather begs the question: if expanding poverty across more and more British households wasn’t actually the directly intended result, was it simply acceptable collateral damage in a drive to transform the State’s relationship to its citizenry?

Either way, it ought to serve as a damning indictment of a government that wilfully discards the life chances and well-being of its poorest citizens, while preaching in the language of opportunity and inclusion.

Now, far from there being light at the end of the tunnel, as the Chancellor of the Exchequer hinted at with his Spring Budget last month, the latest austerity juggernaut is rushing headlong towards those impoverished souls trapped on the wrong side of the tracks. This poverty engine is about to grind a lot of children beneath its wheels as it rushes headlong into their future.

The Equality & Human Rights Commission (EHRC) warns that an extra 1.5 million children will be condemned to poverty by 2022, unless the Government reverses its austerity drive and changes track on a whole raft of once-flagship policy ‘reforms’.

In March, the EHRC released its final cumulative impact assessment, following up an interim report it released towards the end of last year. The latest analysis assesses the likely impact on households and individuals of the Government’s changes to taxes and social security. All told, it will hit a lot of people hard – children hardest of all.

Not only will there be an extra 1.5 million children in poverty by 2022, the child poverty rate for those in lone parent households will rise from 37% to over 62%. Households with three or more children will experience particularly large losses of around £5,600.

The report tracks the impact of reforms introduced since 2010, when the Conservatives first returned to power in a coalition with the Liberal Democrats. Under the guise of ‘taking back control’ of public expenditure in the wake of the 2008 banking crisis, then-Prime Minister David Cameron’s Government embarked on its programme of austerity, justified as necessary approach to reduce the national deficit.

As the Chancellor of the Exchequer at the time, George Osborne, was fond of saying: “We’re all in it together.” Belt tightening was the order of the day, but as a shelf-load of reports have made clear in the years since, some people’s belts were tightened more than others. And so it continues.

The EHRC says that the negative impacts on already struggling families are “largely driven” by changes to the social security benefits systems. In particular, it cites the freezing of working-age benefit rates, changes to disability benefit, and reductions in the rates of Universal Credit; a new and controversial system that has been the subject of much criticism for its failure to deliver its stated purpose of “making work pay”.

“It’s disappointing to discover that the reforms we have examined negatively affect the most disadvantaged in our society,” said David Isaac, the EHRC’s chair. “It’s even more shocking that children – the future generation – will be the hardest hit and that so many will be condemned to start life in poverty. We cannot let this continue if we want a fairer Britain.”

But, far from a fairer Britain, the axe has not yet finished its work. The Resolution Foundation has warned that a further round of social security cuts is coming. These are ‘reforms’ that were already announced but have yet to be implemented; the axe strikes on 9 April and it will lop off £2.5 billion in social security spending. This makes it the second largest cutback in welfare spending in a single year since the 2008 crash, the thinktank has pointed out.

That first wave of big cuts in 2012-13 focused on such things as removing child benefit from higher earners, but this time the Resolution Foundation claims the “squeeze is set to fall squarely on lower income families”.

The four key cuts to come are:

  • The third year of a four-year cash freeze in working-age benefits, saving – in theory – £1.9 billion and affecting 11 million families.
  • Two child limit for benefit claims, which will see three-child families lose up to £2,780, saving the State £400 million and affecting 150,000 families.
  • Withdrawal of the family element of support for new tax credit and Universal Credit claims from families with children. This will cost affected families up to £545 and save £200 million this year, affecting 400,000 families.
  • Roll-out of Universal Credit. This is expected to save the State £200 million this year due to its lower entitlements than the existing benefits system, especially when it comes to long-term sickness, or working families.

“[F]amilies across Britain still face a huge living standards crunch in the coming years, some of which is a direct result of Government policy,” said David Finch, the Resolution Foundation’s chief analyst. “The Government is doing the right thing on pay with another big rise in the National Living Wage and ending the cap on public sector pay. But for many families the extra pay will be outweighed by the £2 billion worth of benefit cuts being rolled out.

“With an average loss of £190, low and middle income families are set for the second biggest welfare squeeze since the crisis, at a time when pay growth remains muted and household incomes are already under strain.”

The EHRC and the Resolution Foundation are not alone in presenting grim analyses of the impact of welfare reform (which has all-too-often become a euphemism for cuts and coercion – even persecution – of some of the poorest and most vulnerable households in the country). Sadly, the Government has remained more or less unmoved by such criticisms of its policies, now or in the years past.

Meanwhile, seemingly oblivious to such concerns, the Government – via the Department of Work & Pensions (DWP) has boasted that the number of children living in “workless households” has fallen 53,000 on the year, and 881,000 since 2010, when the Conservatives first returned to power.

“Children living in workless households are five times more likely to be in poverty and less likely to do well in school, compared to those growing up in households where all the adults are working. That’s why it’s so important to help parents into work. It helps the individual too – it provides a wage, personal fulfilment, a social life and a career,” said Secretary of State for Work & Pensions, Esther McVey.

Just a shame, then, that in-work poverty is rising as the two reports above indicate. But recent figures from the DWP itself also serve to undermine McVey’s positive narrative. There may be fewer children living in workless households, but they haven’t necessarily found that having one or more parent in work has alleviated poverty.

“Although being in work reduces the likelihood of falling below low income measures amongst working-age adults and children, the majority of those in relative low income belong to working families,” noted the latest Households Below Average Income (HBAI) figures, covering 2016/17. “This is because a great majority of working-age adults and children belong to working families.”

Low income is calculated as falling below 60% of the median household income (£494 per week), which comes out at a household income of less than £296 per week (£15,392 a year). Overall, the HBAI figures show that 32.3 million working age adults were in working families in 2016/17, while 6.5 million were in workless families. All told, 57 per cent of all working age adults in low incomes were in working families.

Furthermore, in 2016/17 there were 11.8 million children in working families, and 1.9 million in workless families. Overall, 66 per cent of all children living in low income households were in working families.

“It’s totally unacceptable that so many working households are still locked in poverty. Families with children are continuing to struggle to make ends meet, and more households are at risk of being pulled in to poverty,” said Campbell Robb, the JRF’s chief executive, in response to the figures.

“Beyond the statistics, poverty restricts people’s choices meaning that families are having to make impossible decisions, such as whether to heat their homes or pay their rent. We share a moral responsibility to make sure that everyone has the opportunity to build a better life.

“The Government must act to restore Work Allowances in Universal Credit to their original level. By doing so, lower earners could keep more of their earnings ensuring they could reach a decent standard of living, benefiting over three million low income working households and protecting 340,000 people from being pushed into poverty by 2020-21.”

Sadly, as both the EHRC and the Resolution Foundation point out, much of this impoverishment is the result of cold-blooded policy. The Government knew what it was doing, then – more or less – and did it anyway. In this area at least, in the calculus of politics the only concern, really, is to ensure success doesn’t fly so high it melts its wings. The poor have always been expendable.

Meanwhile, at the risk of bad satire, the way things are going perhaps the only answer we can realistically expect from ministers is a Woosterish: “Let them eat Brexit!”

MC

 


Mark Cantrell, Stoke-on-Trent, 31 March 2018

Copyright © March 2018. All Rights Reserved.

First published on Medium.

 

 

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