Research by the Resolution Foundation highlights the possible...
The UK is the 5th largest economy in the world but four million Britons live more than 50% below the poverty line, which means 1.5 million people living in destitution.
The Institute of Fiscal Studies forecasts an increase of 7% in child poverty by the 2022 General Election. What hope can these fellow citizens have of escape from lives of misery?
When she became Prime Minister in 2016 Theresa May recognised this state of affairs. Standing on the steps of Downing Street, she said she wanted “to make Britain a country that works for everyone.” She unpacked what this meant for her Government.
“If you’re from an ordinary working class family, life is much harder than many people in Westminster realise. You have a job, but you don’t always have the job security. You have your own home, but you worry about paying the mortgage. You can just about manage, but worry about the cost of living and getting your kids into a good school. If you are one of those families, if you’re just managing, I want to address you directly. The Government I lead will be driven not by the interests of a privileged few, but by yours”.
So far her Government’s focus has been on reducing unemployment and they have been very successful. By January this year the employment rate reached a record high of 76.1% and unemployment fell to 4.1%. Tragically that has not meant an escape from poverty for all citizens. 60% of those in acute poverty are in families in which someone is working but that hasn’t ended their poverty.
The creation of the National Living Wage in 2016 was meant to eliminate this but it hasn’t. As from April 1st this year this should mean anyone aged 25 or over should be paid at least £8.21 per hour, benefitting 2.4 million workers. Unfortunately these benefits have been clawed back through the freezing of tax credit, rising prices and changes to benefit schemes that have hit family budgets hard. Moreover, just over one in five employees are paid less than the National Living Wage and 28% of all female employees fall into this category.
The Government’s economic policy has been one of austerity to reduce the budget deficit inherited from the previous Labour Government. To that end public services and welfare policies have been subject to severe cut backs that add to the pressures on those in poverty. However, in his Spring Statement the Chancellor reported that there had been nine consecutive years of growth and the Office of Budget Responsibility forecast continues growth in the next five years. The economy has grown faster than those of France, Italy and Japan. The only cloud on the horizon is the possible damage Brexit might do to business investment and employment levels.
The challenge for Government policy now is to prioritise positive action to address the needs of those living below the poverty line. It is not good enough for Ministers to congratulate themselves for the record employment statistics if firms are not paying the National Living Wage. Churches and charities are plying their part, with foodbanks and debt counselling. It is time for the Government to tackle the causes of extreme poverty in the fifth largest economy in the world.