Brexit is a burning issue. But poverty is still the big one

Three striking trends stand out from the annual state-of-the-nation report Monitoring Poverty and Social Exclusion, commissioned by the Joseph Rowntree Foundation (JRF).

First, the inexorable rise of in-work poverty. A total of 7.4 million people are in poverty, despite being in a working family – a figure that has risen by one million over the last decade. This is despite record employment and the growth of full-time work. One in every eight workers in the UK is now living in poverty and 55% of people in poverty are in working households – a record high.

Second, the number of people living in private rented housing who are living below the poverty line has doubled in a decade, to 4.5 million households.

The third trend is an indication of how today’s “just managing” families can so easily become tomorrow’s poor: 69% of those in the bottom fifth have no savings whatsoever. Again, this increase over the past decade has been stark, up from 57%.

So how did we get here?

It began at a time of crisis. People were thrown into uncertainty by the 2008 global financial crisis, followed by recession, and austerity in the aftermath, with cuts to public services and the social security safety net. Insecure and low-paid work increasingly became a feature of the modern labour market. People and places in poverty were handed a raw deal, tearing away at the resilience that might have once held communities together.

It has created a toxic atmosphere for which the political establishment is now paying the price. Too many people did not feel the benefit of the boom years. The fantastic growth and revitalisation of our cities was rightly celebrated, but too many former industrial heartlands and outlier towns saw little of this rising prosperity. Places such as York, Leeds and Harrogate, close to where JRF is based, have enjoyed opportunities and potential. They were the islands voting to remain in a sea voting to leave.

In the 10 years I have led JRF, I’ve seen governments of all persuasions fail to address the seismic shifts in the labour and housing markets. The colours may have changed, but the approaches did not. Insecurity and mistrust thrived. The cost of failing to recognise and act on these changes and concerns has been dramatic, with a backlash at the ballot box from people who felt they had little else to lose. The cruel irony is the uncertainty and insecurity from the financial crisis risks being repeated a decade later.

It would be all too easy to be gloomy and fatalistic. A comprehensive response is required from governments across the UK, business and local leaders to provide short-term stability and support people with the foundations to enjoy a decent, productive and secure life.

This must start by supporting the millions of people who are evidently not managing. Cuts to the work allowance under universal credit must be reversed. Likewise, the freeze on working-age benefits are increasingly out of date, particularly as inflation is predicted to rise above 2% and real wages will falter.

Longer-term, stable and affordable housing needs to be a cornerstone of policy for reducing poverty. By investing an extra £1.1bn a year in the affordable housing budget, the government could go a long way to meeting its target of building one million new homes by 2020. Around 40,000 of these homes would be available at “living rent” level, making them affordable to people earning the “national living wage”. The remainder would be available for rent-to-buy and shared ownership, depending on local need.

Business must also play a leading role by taking on more apprentices, offering secure contracts and providing routes to better pay and job progression. Utility and financial services can reduce and end the poverty premium: the higher costs faced by poorer households for everyday goods and services.

And we must ensure growth reaches all corners of the country. Having control over adults skills budgets, for example, will enable the incoming metro mayors to connect unemployed people to training and jobs, and allow them to progress in work, helping them truly share the benefits of rising employment and prosperity. There are also new opportunities for mayors to build more affordable homes through land assembly powers, as well as using procurement and planning powers to create apprenticeships and job placements.

Governments in Scotland, Wales and Northern Ireland have powers and capability to reduce poverty and enable everyone to play their full role as citizens.

With energy focused on the process of leaving the EU, there’s a danger the concerns of people at home are ignored. This analysis should act as a warning for politicians who often talk about representing the concerns of those “just about managing” – or as is too often the case now, not managing at all.


First published on the Guardian.

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