Poverty and plenty in twenty-first century Britain

Written by: Matthew Whittley on 29 January, 2013
Filed under Economy

Over Christmas, Save the Children – a charity best known for their attempts to relieve the suffering of the global poor – were providing urgently needed medical and food supplies to children affected by the recent violence in Syria and Gaza. This year, for the first time, they were also active here in the UK, supporting children whose families are unable to afford the basic essentials that most of us take for granted.

Their report, ‘It shouldn’t happen here’, published last summer, is a damning indictment of twenty-first century Britain. It revealed that almost two-thirds of parents in poverty have had to cut back on food, with over a quarter skipping meals. One in five children in poverty can’t afford to replace old shoes that they’ve outgrown, and spare a thought on these brutally cold winter mornings for the 14% of children in poverty having to go without a warm coat.

The rise of the foodbank

There are currently 3.5 million children in poverty in the UK. The Institute for Fiscal Studies has projected this to increase by 400,000 by 2015 as stagnating wages, cuts to benefits and the rising cost of living continue to put household budgets under unprecedented strain.

Faced with high unemployment, low wages and an austerity-obsessed government slashing away at an already hole-ridden safety net, the poorest are being hit disproportionately hard by an economic downturn that they played no role in creating.

So hard in fact that increasingly large numbers of people are having to rely on charitable handouts to put food on the table. There has been a 400% rise in the number of foodbanks in the last two years; the anti-poverty charity, The Trussell Trust, is opening three new ones every week in the UK. At that rate there will be more foodbanks than ASDA stores in a few weeks time.

They have fed almost 250,000 people in the last twelve months, and they predict that figure will double by 2016. Even more alarmingly, increasing numbers of working people are now turning to foodbanks as wages continue to fall way short of inflation.

Household budgets are being squeezed yet further by spiralling energy costs. One in four UK households are now in fuel poverty, and many of these are finding themselves having to choose between heating and eating. There were 24,000 excess winter deaths last year – 214 a day, and hypothermia deaths have doubled since the recession hit.

Children going without winter coats, working families unable to afford to eat, the elderly dying in cold homes. All of this in the seventh richest country on Earth, in the twenty-first century.

There’s plenty of money

The coalition government’s stated central purpose is to reduce the national debt. This is, they tell us, the most pressing concern. This, we are told, is why cuts in public spending are necessary. These are austere times. We need to go through the pain. There’s no money left… except this isn’t true. There’s plenty of money around; it’s just distributed poorly.

We’re now a more unequal society than at any time since the Second World War. The top 10% take 31% of total income, while the poorest tenth have to make do with just over 1%. Staggeringly, the richest 0.1% now take over 5% of the pie.

The shocking levels of poverty and deprivation described above are coexisting with obscene wealth. In the last financial year, FTSE 100 chief executives saw their income rise by 12% on average to £4.8 million – 185 times the average wage, in comparison to a below-inflation pay increase of just 1.4% for the average worker.

Deborah Hargreaves of the UK High Pay Commission has warned of a return to “Victorian levels of inequality” within five to ten years if the gap between the rich and the rest continues to grow so fast.

Income inequality has been rising since 1979, and for the average worker real wage growth stalled in 2003, long before the recession. Easy access to cheap credit and tax credits helped to conceal the real extent of inequality, but now that tax credits are being cut and borrowing money is more difficult, people are left with only their wages, and the inadequacy of those wages has become abundantly clear.

Poverty pay

Low pay is the single biggest cause of poverty in the UK; over half of those in poverty are in working households. The need for a living wage is clear, yet a fifth of workers aren’t receiving it. As the government has recognised, we need to ‘make work pay’. But this can only be achieved by encouraging large corporations to pay their employees enough for them to to live on, not by following the twisted Tory logic that cutting benefits is how you make work pay.

For the twelve months to the end of February 2010, Tesco recorded pre-tax profits of £3.4 billion. In that year, executive management paid themselves £24 million in pay and bonuses, while many checkout operators weren’t being paid a living wage. If companies like Tesco can afford to reward their executive team so handsomely, they surely have a responsibility to ensure their employees earn enough to attain a socially acceptable standard of living.

After all, when corporations fail to do so it’s the taxpayer, in the form of working tax credits, that’s left to make up the difference between the poverty pay and what’s needed to live on.

‘The decade of destitution’

Surely it only takes a semi-functioning moral compass to regard the present levels of poverty and inequality as both unjust and intolerable. Indeed, three quarters of us agree that the gap between the rich and poor is too large and would prefer to live in a more equal society.

Unfortunately, the policies being implemented by the coalition government are only likely to entrench inequality and exacerbate poverty: the working poor, already struggling with low wages and rising living costs, are seeing their income reduced even further by cuts to benefits. If we’re to avoid this decade going down in history as what has already been labelled ‘the decade of destitution’, the government has to ensure that it really is ‘those with the broadest shoulders’ that bear the greatest burden of deficit reduction, not those on low incomes.

It’s important to remember that poverty and inequality aren’t inevitable and don’t have to be accepted. We can achieve a fairer distribution of  income.  But it won’t just happen; we’re going to have to make it happen. With working people now turning up at foodbanks and unable to heat their homes, the campaign for a living wage seems a logical place to start.