The Weekly paper of the New Communist Party of Britain

Week commencing 17th February 2017

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Poverty knocks

by Daphne Liddle

NEARLY one third of all households in Britain do not get enough money to support a basic minimum standard of living, according to the latest report from the Joseph Rowntree Foundation.

The Minimum Income Standard (MIS) is based on what the public think people need for a minimum acceptable living standard in Britain. An income that falls below 75 per cent of MIS is an indicator of poverty.

The team at the Centre for Research and Social Policy at Loughborough University, who compile the MIS for Britain, examined data from the Family Resources Survey and compared actual household incomes with the MIS benchmarks for each household type

The report found that:

• The proportion of people in households with incomes below MIS grew between 2008/09 and 2014/15, from 25 per cent (15 million individuals) to 30 per cent (19 million) of the population. This increase mostly came between 2008/09 and 2011/12. Since then the growth in low income has stopped but not reversed.
• The proportion below 75 per cent of MIS grew from 15 per cent (nine million) to 17.5 per cent (11 million) between 2008/09 and 2014/15. This increase contrasts with a slight fall in “relative poverty” (below 60 per cent of median household income). This is because median income has fallen substantially relative to minimum living costs.
• The risk of low income is much higher than average for children and much lower than average for pensioners. Lone parents and their children have the greatest risk of low income — three in four have incomes below MIS and nearly half have incomes below 75 per cent of MIS.
• Six in 10 working-age households below MIS have at least one person in work. The risk of being below MIS has grown despite record employment because more working people are on low incomes. For lone parents, even those working full-time have a 42 per cent risk of being below MIS, up from 28 per cent in 2008/09.
• Forecasts of renewed inflation and slow growth in wages, combined with a freezing of benefits and tax credits, suggest that the number unable to reach MIS will increase further, posing severe challenges to the Government’s stated aim of helping “just about managing” families.

Single working-age adults are also falling into poverty. The risk for young single people of having low income rose sharply in the recession, to over 40 per cent, but has reduced as employment levels have risen.

And although pensioners now are less likely than young families to fall into poverty, it is still a growing problem for them. Currently just over 14 per cent fall below the MIS threshold compared with 10 per cent in 2008/09.

Even though state pensions have been pegged at least to the Consumer Prices Index, the actual cost increases seen by pensioners have been greater than this index since 2008/09, influenced by sharp increases in energy and food prices. Nevertheless, the risk of having very low income — below 75 per cent of MIS — remains low at only five per cent for pensioners, influenced by the greater adequacy of safety net benefits for this group.

But these safety nets are now under attack as the Tory government twists the facts to make it appear that they are doing nicely, when the truth is that their incomes are simply not falling as fast as others.

The Government claims to be helping those who are “just about managing” but the reality is that, with inflation starting to rise, a lot more people on low incomes will be pushed over the edge into extreme poverty — dependence on food banks will rise, as will homelessness.

Safety nets are disappearing as local authorities and the NHS face more and more cuts, legal advice for people in poverty disappears, and the very agencies that are set to monitor levels of deprivation will disappear and no one will be counting those who are in poverty.

The answer is to fight for the restoration of trade union rights — these are the only effective means of raising wages and defending pensions.

And ultimately it is a class struggle against the political power and callousness of the ruling class.