Defining poverty:

Poverty should be measured “not only the commodities which are indispensably necessary for the support of life but by whatever the customs of the country renders it indecent for creditable people, even the lowest order, to be without.”

Adam Smith 1776

“Our needs and enjoyments spring from society; we measure them therefore by society.”

Karl Marx, 1849

“People are poverty stricken when their income, even if adequate for survival, falls markedly behind that of their community. Then they cannot have what the larger community regards as the necessary minimum for decency, and they cannot wholly escape therefore, the judgment of the larger community that they are indecent. They are degraded…they live outside the categories which the community regards as acceptable.”

J. K. Galbraith, 1958

“An absolute standard means one defined by reference to the actual needs of the poor and not by reference to expenditure of those who are not poor. A family is poor if they cannot eat…By any absolute standard there is very little poverty in Britain today.”

Sir Keith Joseph, 1979

J Moore argued that relative poverty was simply inequality and could therefore be ignored: “what a relative definition of poverty amounts to in the end is that however rich a society it will drag the incubus of relative poverty up the income scale. The poverty lobby would in their definition find poverty in paradise.

John Moore 1989

How do we define poverty?

Absolute PovertyThis definition describes poverty as not having the essentials for life i.e. food, clothes and shelter.

Relative PovertyThis definition describes poverty as not having access to what society thinks citizens should have i.e. decent quality housing, certain household goods (fridge, beds, telephone, etc.), a holiday or toys and books for children.

There is no officially recognised measure of poverty in the UK however, three commonly used measures are:

Households below average income (HBAI) or ‘Low Income Household’Used by the Department of Work & Pensions (DWP), this defines those in poverty as anyone living on or below 60% of median income. In 2016, median family income in the UK stood at £27 per annum. Any family below around £16,560 would be considered poor.

Income Support Income Support is paid to those whose income falls below a level set annually by the Government. Anyone in receipt of Income Support is considered to need additional benefit payments to pay for essentials.

Joseph Rountree Foundation’s (JRF) Minimum Income Standard (MIS) This ‘minimum standard’ is based on what members of the public think people need to achieve a socially acceptable living standard. In 2015, for the first time since 2008, actual incomes have risen relative to MIS.

1. The extent of poverty in the UK

In the UK in 2013 because of a lack of money:

One in four children did not get an annual holiday away from home; One in five children lived in a home that was cold or damp; One in ten children lacked an essential item of clothing such as a warm

coat One in twenty households couldn’t afford to feed their children

adequately

In recent times some have suggested that we have witnessed the rise of the "precariat". This is a new class of workers, who endure insecure conditions and low wages.

There is a growing number proportion of the population at risk of falling in to poverty.

Poverty & Social Exclusion report [2012] found that:

The proportion of households in arrears on at least one of their household bills – rent mortgage and loan payments has increased from 15% in 1983 to 21% in 2012.

The winter of 2012/13 saw the number of excess winter deaths rise by 29% compared to the previous year.

Cramped housing conditions are also on the rise with 9 per cent of households (11% of children) living in overcrowded conditions. This means that in 2012,

“Based on exclusive access to the largest ever survey of poverty in the UK, and its predecessor surveys in the 1980s and 1990s, Stewart Lansley and Joanna Mack track changes in deprivation and paint a devastating picture of the reality of poverty today and its causes. Shattering the myth that poverty is the fault of the poor and a generous benefit system, they show that the blame lies with the massive social and economic upheaval that has shifted power from the workforce to corporations and swelled the ranks of the working poor, a group increasingly at the mercy of low-pay, zero-hour contracts and downward social mobility.”

600,000 children were sharing bedrooms in a way considered unacceptable by the vast majority of people.

There has been an increase in the numbers struggling to maintain a diet of sufficient quality… on the basis of three adult food necessities (two meals; fruit & vegetables; meat; fish or vegetarian equivalent), 3.5m are not properly fed.

Households going without, Britain 1999 2012

Significantly, these material and social deprivations are also associated with other disadvantages. In particular, those unable to afford necessities are also more likely to be in poor health.

Analysis shows that those who cannot afford meat, fish or its vegetarian equivalent every other day are seven times more likely to be in poor health than those who can.

Deprivation is defined as an ‘enforced lack of socially perceived necessities’. Deprivation poverty can be identified as those whose deprivations are overwhelmingly enforced (through a lack of income) and whose lives are affected in deep and multiple ways.

Across Britain thirty per cent of adults cannot afford three or more of the necessities for adults, and 31 per cent of children live in households cannot afford two or more of the child necessities. This child ‘deprivation poverty’ comes despite the fact that children are being protected from the deprivation by their parents.

Between 2004 and 2013, the incomes of those in the bottom quarter fell by around 9% and, overall, were no higher in that year than in 2000.

This income squeeze has been further tightened by increases in the ‘cost of living’: Not only have incomes been contracting but they buy fewer things. Between 2002 and 2013 the CPI measure of inflation increased by a third; food prices rose by over 50%, the price of electricity and gas more than doubled and rents also increased more steeply than general prices.

One area where there has been some improvement is in the number of poor elderly citizens. In the 1960s, around a third of the poor were elderly. Today less than a tenth of those in poverty are in households were all adults are retired. The falling rate of poverty is the only success story of the last three decades. However, despite increase to the UK basic state pension from 2016 the UK pension will remain below European standards.

Consequently, the number of people having to borrow just to get by rose sharply, with, in particular, a growing dependence of help from the family.

Those forced to borrow are heavily concentrated among those who lack three or more necessities.

One of the consequences of this has been a rise in the accumulation of personal debt:

There are now more than 240 lenders operating in the UK.

Wonga saw its loans soar to 1.2bn in 2012 up 68% on the previous year.

There remains a content juggling to get by and worry over the future.

One comment from the 2012 study summed this up thus:

‘I’m not living, I’m surviving… it’s like rationing on food, rationing on electric and gas, it’s not a life at all.’

2. Who becomes poor?

In the summer of 2011 David Cameron launched his ‘troubled families’ strategy’.

According to him ‘troubled families’ lay at the heart of the problem of poverty.

He characterised families with multiple deprivations as being ‘neighbours from hell’ that “we’ve known for years that a relatively small numbers of families are the source of a large proportion of the problems in society. Drug addiction. Alcohol abuse. Crime. A culture of disruption and irresponsibility that cascades through the generations.”

This statement from David Cameron, gave a clear insight into the government’s central understanding of the causes of poverty – namely that it was down to individual behaviour.

In the government’s view poverty was to be reclassified to shift the emphasis from family income and lack of opportunities to factors such as family breakdown, poor parenting and drug addiction.

The government and the DWP were widely criticised for taking a highly misleading, amateurish and deeply flawed approach to identifying poverty.

Comprehensive research by the JRF has shown that poverty is difficulty to escape from: the study found a significant persistence of poverty from teens to adult life and that a large proportion of the link between child and adult poverty could not be put down to any parental characteristics other than low income.

Being brought up poor does carry disadvantages for future life chances – and does increase the risk of poverty in later life – but these disadvantages can be heavily traced to wider societal factors, such as the condition of the labour market or educational access, rather than to a supposed culture of poverty.

3. Britain’s work crisis:

In 2013 Costa Coffee opened a new branch in Nottingham advertising eight new positions, only three of which were full time opportunities.

According to Costa 1,701 applications were received for the posts – over 200 per job.

Among those applying were new university graduates to former retail managers. Many according to Costa were ‘clearly overqualified’.

In 2010 Argos received 14,000 applications for 700 positions nationwide – 20 people chasing every job. In one Argos store in the midlands it received 1,300 applications for just 20 temporary positions over the Christmas period.

In 2012 Jaguar received 20,000 applications for 1,000 jobs – 95% of applicants were out of luck.

In the Sumer of 2013 2,000 people applied for 30part-time, minimum wage jobs at a cinema in West Bromwich.

For the last 4 years the UK government has been able to publicise its ‘success’ of having brought down the UK unemployment rate – it has decreased from 8% in 2010 to just under 5% in 2016.

However, the headline unemployment figures understate the scale of the modern jobs crisis.

The unemployed are typically out of work for longer today, than ever before.

There has been an increase in the number of people underemployed – people working fewer hours than they would prefer. Such as, people being forced in to part-time work when they would rather have full-time employment.

Another clear sign of the growing fragility is in the big increase in the numbers of people identifying themselves as self-employed:

The number of self-employed workers in the UK rose by 257,000 to 4.79

million in the three months to June 2016. The number of self-employed workers has risen by around 1m since the start of the financial crisis.

The growth in self-employment is an indication of the lack of job opportunities in the UK currently.

There is also evidence of rising pressure from job centres on the jobless to become self-employed in an attempt to reduce the unemployment count.

Over the last forty years, rising numbers of the workforce have been denied access to secure, decently paid work with reasonable prospects.

Not only are good jobs scarce but Britain has become an increasingly low-paid economy.

One-in-five employees (21 per cent, or 5.5 million individuals) were low-paid in Great Britain. There has been little change in this proportion over the past 20 years.

Extreme low pay affected just 2 per cent of employees – likely to be young people and apprentices as well as some possible minimum wage non-compliance – reflecting the fact that the threshold falls below the adult minimum wage.

More than one-in-five employees (22 per cent, or 5.7 million individuals) were paid less than the Living Wage. This is an increase from 20 per cent in 2013.

One-in-twenty employees (5 per cent, or 1.4 million individuals) were on the minimum wage. This proportion has been increasing steadily since the early 2000s.

National minimum wage currently stands at £7.20 for over 25 year olds. However there is widespread non-compliance and few prosecutions, an estimated 280,000 in Britain are paid illegally – less than the minimum wage in cash-in-hand informal sectors.

More than half of people in poverty live in a family where someone is in work. At 6.8m it is 1.5m higher than a decade ago.

What are the causes of this shift in employment outcomes?

De-industrialisation Manufacturing decline Globalisation – Competition from the global market Technological change & advancement The government assault on collective bargaining and the declining

influence of trade unions Less job security as a result of legislation – ‘the flexible economy’ Zero-hour contracts

Zero-hour contracts: ‘A zero-hours contract is not 'flexibility' but exploitation – and it's rising’.

The number of workers on zero-hours contracts has increased by more than 100,000 over the past 12 months to exceed 800,000 for the first time, official figures show.

Figures from the Office for National Statistics (ONS) showed that 801,000 workers, or 2.5% of the employed UK workforce, were on zero-hours contracts in the quarter to last December, up by 15% or 697,000 from the same period of 2014.

The data showed there were about 1.7m such contracts in November, indicating that many workers have more than one zero-hours contract. The increase renewed fears that employers are using cheap casual labour to cut costs and avoid commitments to their workforce.

4. Punishing the poor

David Cameron: “too many people are getting something for nothing”

Ian Duncan Smith: “The nature of the life you lead and the choices that you make have a significant bearing on whether you live in poverty”.

It is apparent the Over the last 8 years or so the Conservative Party has established a clear ‘us and them’ approach to welfare claimants. The

Conservative party have made political gains as presenting themselves as tough and Labour soft on welfare.

During the coalition years, the levels of benefits for those of working age was cut, sanctions were intensified and conditions for receipt of benefits was made more restrictive. This is part of a long term trend of the government to take greater control over the lives of claimants – where they live, their approach to work, how many children they have and their lifestyles.

From 1997 lone parents were required to seek work when their children turned five.

From 2012, penalties for unemployed and disabled claimants were severely tightened, involving a new set of fixed penalty sanctions – with benefit suspensions for between 4 weeks and 3 years – for claimants of Job Seekers Allowance (JSA) and for disabled people on Employment Support Allowance (ESA).

In 2013 the DWP carried out close to 1m sanctions, this was the highest for any 12 month period since JSA was introduced in 1996 and compares with 500,000 in the last year of the labour government. The most common reasons for sanctions are ‘failure to arrive at an interview’ (which, in practice can mean arriving late), non-participation in a training or employment scheme (even if unsuitable); and ‘not actively seeking work’ (not applying for the number of jobs required by the job centre).

Claimants that receive a sanction will have their benefits payments withheld, the claimant can apply for a ‘hardship payment’ but only after 2 weeks and it is for 60% of the withheld benefit payment or 80% for ‘vulnerable’ claimants.

From the inception of the new tougher regime local Jobcentres have been under considerable pressure from Whitehall to raise the number of sanctions issued.

Further benefit changes include:

DWP administered council tax benefits have been replaced with alternative local authority schemes, reduced from 100% of council tax payment to 75%.

The DWP Social fund was abolished and devolved to 150 local authorities – its budget cut by 50%.

The introduction of the ‘flagship’ Universal Credit, which is aimed at replacing 6 main benefits (including JSA, ESA and incapacity benefit) with one single benefit payment. The idea behind this was to simplify the benefit system and reduce administration costs. However it continues to be years behind schedule and has cost millions of pounds to introduce. The government has also warned that as part of the Universal Credit scheme jobseekers would be expected to accept any job offers of zero-hour contracted employment or have face having their benefit payments stopped.

Fit to work (134)

Prof Malcolm Harrington, the government appointed adviser on testing welfare claimants, admitted the work fitness test was “patchy”.

He said that as a result of the flaws in the 13 week assessment, which tests physical fitness as well as mental skills, some claimants who were genuinely unable to work, have suffered.

He made the comments during an investigation into the system, introduced by the last Labour government,

5. Housing

For the first time since the late 1960s there are more homes renting their homes privately than in social housing.

For more most, standards are adequate but for a growing number, this has meant a return to poor and, too often, grim and unfit housing conditions.

Over the last 30 years housing policy has been dominated by one overriding aim – to boost levels of home ownership.

Council house sales have greatly outstripped the volume of new building, leaving depleted social housing stock unable to cope with demand, families in need have been left increasingly dependent on an under-regulated and expensive private rental market.

The number of new houses being built is down from around 325,000 per year in the 1970s to 127,000 in 2012. Against this the number of households is expected to grow by 272,000 per year until 2033.

In the first 30 years of ‘right to buy’ more than 2 million council properties were sold. Councils were debarred from spending the proceeds from these sales on replacement housing. Council have ended up having to rent the very houses that they were forced to sell.

The number of households on the waiting list for new housing grew by 700,000 during the labour years and had reached an all-time high of 1.8m in 2012.

In Scotland 173,587 households are on the waiting list for social housing (may 2016).

Another consequence of the growing shortage of homes is the persistence of homelessness.

By the end of 2013, 185,000 people were homeless, the figure having risen for each of the three years before.

Almost 30,000 households became homeless, in2015, in Scotland and more than 65,000 households approached their local authority for help with housing.

Home buyers are having an increasingly difficult time being able to afford to buy a home as house prices have soared. The ratio of median house prices to median earnings has significantly increased. In 1997 it was 3.54 (house price 3.5 x average earnings); by 2013 it had risen to 6.8.

In 2012 63% of new buyers received help from their parents.

The Resolution Foundation estimates that 1.6m UK households – two thirds working households – are spending more than half their disposable income on the ongoing costs of housing each month.

In 2012 the Conservative/ Liberal Democrat, coalition, government introduced the ‘under-occupation penalty (‘bedroom tax’)

This meant that people living in social housing would get less housing benefit if they have a spare bedroom

The amount of net rent covered by housing benefit is cut by:

14% if you have one spare bedroom 25% if you have two or more spare bedrooms

For example, if your net rent is £120 a week you need to pay the following extra rent yourself:

£16.80 more if you have one spare room £30 more if you have two spare rooms

There has been a growth in the number of private landlords refusing to house tenants in receipt of housing benefit. It is now not uncommon to see landlords stating “no DSS in the adverts”.

Britain now faces a deep-seated housing crisis, with deteriorating housing choices, runaway house prices and private rents, and a soaring housing benefit bill (around £41bn for 2015/16).

What can/should the government do to resolve these housing issues?