Inequality and Poverty

The News Hour

Those figures, however accurate, are incredible in the light of statistics published this week by the Institute of Fiscal Studies which reveal how one in four low income households are struggling with debt. Household debts have reached an all-time high of £1.5 trillion and half of British households have an average of £3,737 in unsecured debts such as credit card bills and pay day loans

There may be nothing wrong with borrowing and using credit cards when interest rates are as low as they have been in recent years but with inflation rising it is inevitable that interest rates will be increased, creating serious problems for low income families with these debts. This situation has been exacerbated by shrinking wages for the poorest households. Unemployment has fallen to 4.3%, the lowest since 1975, but wages have only grown by 2.1 whilst inflation has risen to 3%. Those who earn upwards of £50,000 a year can cope with this but those who take home £13,000 a year struggle to make ends meet. It is no wonder that more than half a million households now look to foodbanks to help put food on the table for their families.

Some progress has been made in reducing poverty amongst pensioners but 39% of lone-parents with three or more children remain at risk. Poverty rates are rising as a consequence of reductions in benefits and tax credits. Raising the income tax threshold and the minimum wage rate has helped some but these measures have been outweighed by benefit cuts. The poorest 20% typically spend a third of their income on housing and housing costs have risen. They also spend proportionately more on food and fuel, and fuel prices have risen faster than the rate of inflation.

There is more to this than cash poverty. Struggling to make ends meet may affect people’s physical and mental health. The poorest households have worse health records and are more likely to experience anxiety and depression as a result of their constant struggle with debt. Poverty can also damage people’s relationships. Couples on low incomes are more likely to separate or divorce than the better off but struggling alone may make things even worse, especially for the children involved. So this is a social and spiritual matter, not just a financial one.

In her first speech as Prime Minister Theresa May spoke about “the burning injustice that if you are born poor you will die on average nine years earlier than others”. She pledged to make Britain a country that works for everyone, especially those who are ‘just managing’. In their 2017 election manifesto the Labour Party proposed to increase the taxes on the top 5% who earn more than £80,000 p.a. and to increase Corporation tax in order to increase benefits and funds for NHS and other essential public services. Party politics aside, we need a new political consensus that gross inequalities and acute poverty have no place in our society.

This is not just a political matter; it is also a serious moral and spiritual issue. In his parable of the sheep and goats (Matthew 25) Jesus says caring for the hungry, homeless and poor is a Christian duty. Charities like the Salvation Army, Christian Aid and Tearfund, and those who support them, take this teaching seriously but much more needs to be done both nationally and locally to obey Christ’s teaching to love our needy neighbours, especially the poorest and most desperate whose lives are a constant struggle. It is not enough to be the fifth wealthiest nation in the world if we don’t have the social and moral values to share that wealth with the poorest people amongst us.