Helen Barnard is Associate Director at the Joseph Rowntree Foundation and Research and Policy Director at Pro Bono Economics.
With the current febrile political atmosphere, it’s easy to lose sight of the serious challenges facing the country. But the Government and the Conservative Party need to recover their focus and get to grips with these if they want to not only secure another election win, but fulfil their commitments to the country.
This week saw the publication of a new state of the nation report from the Joseph Rowntree Foundation. It lays bare a challenge that should be at the heart of this reset: the increasing number of children growing up in deep poverty.
Since 2012/13, poverty has been rising among both children and pensioners. Almost third of children how live in poverty, up by four percentage points. This is bad enough, but even more worrying is the fact that a rising proportion are living in deep poverty, with incomes so low as to be completely inadequate to cover the basics. 1.8 million children are in families trapped in this position – an increase of half a million between 2011-12 and 2019-20.
And for many, poverty is not a fleeting experience – the hardship and fear it causes can last for years. The report highlights large numbers of children in persistent poverty in the years running up to the pandemic. Around one in five children have lived on a low income for at least three of the four years between 2016 and 2019. For young children, living in a family that is going without the essentials is all they will ever have known.
Worst of all, the research finds that destitution – the very deepest poverty in the UK – has risen extremely sharply in recent years. 2.4 million people, including 500 000 children experienced destitution in 2019, a rise of more than a third since 2017.
The cost-of-living crisis is rightly at the top of the political agenda and is likely to stay there. Higher prices in the shops and massive increases in energy bills will undoubtedly feel challenging for many people across the country. But it is those who are already struggling to afford the basics or are teetering on the brink of hardship and debt, who should be our priority.
In 2019, the Conservative manifesto promised to reduce child poverty. On January 5 this year the Prime Minister said that “the Government is determined” to “support the poorest people”. These are the right commitments, but we are already seeing signs that the dire situation laid out in this report is getting worse.
In many places, charities are bearing the brunt of the escalating crisis. A survey before last Christmas found that three quarters of charity leaders were worried staff were at risk of burnout. They had already seen demand rising and expected pressure to build further into this year. Crisis estimates that over 200,000 families are experiencing homelessness. Food banks are recording record rises in demand. We hear about families unable to afford beds for their children. There was recently a news story about a family who had to move a lightbulb around their temporary home because they couldn’t afford more than one.
The situation was made worse by the Chancellor’s decision in last Autumn’s Budget to cut social security support for those out of work to the lowest level in 30 years. It was hugely encouraging to see him invest in Universal Credit and boost help for workers on low incomes. However, the choice to direct that additional funding solely towards those able to work has left large numbers of the very poorest families unable to keep up with bills and horribly exposed to the price rises to come.
In the short term, the Government needs to step in and protect those facing the greatest hardship over the next few months, as inflation climbs to six per cent and energy bills rise by between 40 and 50 per cent. Energy bill hikes will affect large parts of the country, but for those on middle incomes, they will only take up around six per cent of their income.
By contrast, low-income households will be spending nearly a fifth of their income on energy, with some on the lowest incomes finding over half of their cash eaten up by energy costs. With budgets already stretched beyond coping, many will have no choice but to stay cold and go hungry. Targeting additional support towards those facing the greatest hardship (for instance through a one-off grant for all those on Universal Credit, legacy benefits and Pension Credit) would be a far better use of public money than a thinly spread VAT cut.
Just as importantly, we must get to grips with the underlying drivers of rising and deepening poverty. Over the last decade, we have largely succeeded in getting those who can work into jobs. But too many of those jobs have not protected people from poverty. This is not just about the level of hourly pay – workers at high risk of poverty are often stuck in part time and insecure jobs. Using the promised Employment Bill to increase job security for those at the bottom of the labour market would be a significant step forward. Opening up better quality, better paid jobs to people who need to work part time would massively boost the prospects of disabled people, parents and carers.
Reducing costs is just as important as boosting incomes. A million private renters are stuck paying rents they can’t afford and thus far polices to increase home ownership and make renting more affordable have failed to help. Investing in social housing could free 600,000 people from poverty, as well as rebooting a genuine pathway to ownership for those on low incomes. Tackling high energy costs is harder, but better regulation of the energy market (with Ofgem’s failures starkly set out in this Citizen’s Advice report), increasing the UK’s storage facilities and going further and faster on energy efficiency measures would all help.
And we must revisit the question of the adequacy of support for those who cannot work or can only work a low number of hours. As Baroness Stroud argued after the Universal Credit cut last Autumn – “as well as rewarding work, our welfare system must always protect society’s most vulnerable.” It cannot be right that we have allowed our social security system to be eroded so far that it traps disabled people, carers and children in such hardship.