Sunday, November 25, 2012

Poverty Pay UK

Britain's poorest families are facing hidden cuts worth more than 30% of their annual income by 2017 as public services are cut or withdrawn to meet the coalition's tough spending targets, new research commissioned by the TUC reveals. The TUC's analysis shows the hefty cost of austerity to low-income households.
Through detailed analysis of survey findings on who uses public services, and data from the Treasury, it has built up a meticulous picture of how planned spending cuts will affect households across the country. By 2016-17, the last year for which the government has so far issued spending plans, the cumulative cost of lost public services for the poorest 10% of households in cash terms will have been £3,995 – or 31.7% of their average annual income. For those in the top 10th of the income scale, many of whom may use public transport infrequently, opt out of public schooling and healthcare, and are less likely to call on services such as Sure Start centres for children, the impact will be much smaller: £2,805, or 2.5% of annual income. The TUC's analysis also suggests that much of the pain – in terms of reductions in public services – is still to come. The average household has already lost more than £1,200 in public services, but that's only about a third of the total cuts they are likely to experience by 2014-15.

The Joseph Rowntree Foundation in its annual Monitoring Poverty report finds that 6.1 million people in working households live in poverty. The figure exceeds the 5.1 million poverty-stricken adults from households where nobody works. Roughly one-third of children in poverty, around 700,000, are now in working households, the Monitoring Poverty report found. There are 1.4 million people working part-time but wanting full-time work. Over the last four decades, hours per worker have fallen by 11 per cent.

Tom MacInnes, research director at the New Policy Institute and author of the Joseph Rowntree Foundation study "This is about people who are working but aren't bringing in enough money to lift their family above the poverty line. The high level of in-work poverty undermines any idea that better incentives to enter work are some kind of cure-all."

Julia Unwin, the foundation's chief executive, said: "The most distinctive characteristic of poverty today is the very high number of working people who are also poor."

The number of working families receiving tax credits – payments to top up low wages – has risen by 50 per cent over the last decade, to more than 3 million. One-fifth of women and one-seventh of men earn less than £7 per hour. Ruth Lupton, deputy director of the London School of Economics' Centre for the Analysis of Social Exclusion, the report shows that "People are cycling in and out of work, into low-paid jobs..."

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