A new ‘long term deal’ to solve poverty in the UK could allow for the ‘first generation of Brexit children’ to live an adult life that is both prosperous and poverty-free, according to a new report from Joseph Rowntree Foundation (JRF).
The independent thinktank has launched a “five-point plan” to solve poverty by 2030, but says this will only work if Theresa May stands by her commitment “to make Britain work for everyone”.
The call comes as a new poll reveals that 90% of the public believe government has a key role in solving poverty, 85% say local government, 71% say people living in poverty themselves, and 70% say businesses.
Poverty costs the UK economy a whopping £78bn a year, with £1 in every £5 spent on public services to tackle the problem costing a further £9bn is lost tax revenue and extra benefits spending.
Solving poverty also has wide public support, with 71% saying poverty is a big problem for the UK. However, this falls to 64% of people earning more than £62,000. Two thirds believe poverty has increased in the past decade and half agree it is more difficult for people to escape poverty than ten years ago.
JRF says the first priority is for the UK to move towards “a more responsible capitalism that benefits people on low incomes”, ending the so-called “poverty premium” where people on low incomes are left paying more for goods and services.
Julia Unwin, chief executive of JRF, said: “It’s shameful that in the 21st century, 13 million people in our wealthy country are living in poverty.
“A new ‘long term deal’ to solve poverty is urgently needed so the first generation of ‘Brexit children’ starting school this week grow up in a country where no matter where they live, everyone has a chance of a decent and secure life. Previous approaches have been too piecemeal, failing to deal with issues such as the high cost of living.
“Poverty divides communities and generations; it harms people’s potential and strains families; it drains the public purse and holds back our economy.
“The Prime Minister has made a promise to make Britain work for everyone and reform capitalism. As Westminster reconvenes this week, I urge her to deliver on this promise.
“If we don’t take action now, poverty is set to increase for children and working-age adults. Poverty is the biggest social evil of our time – we must act now.”
JRF are working with Big Society Capital to raise up to £20m of social investment. The money will be used to support charities and social enterprises to develop solutions to the “poverty premium”.
Cliff Prior, CEO of Big Society Capital, said: “How can it be that thousands of people living in poverty pay more than £1,000 extra each year for even the most vital services such as gas, electricity and loans? It’s a scandal that must be ended – and we believe that’s possible.
“So Big Society Capital is keen to work with JRF and our co-investors, to support charities and social enterprises in financing ventures that can provide fair and affordable alternatives. We want to prove that people on lower incomes can be served fairly, and to encourage companies, government and regulators to do the same.”
- Boost incomes and reduce costs:
– End the poverty premium – where people in poverty pay more for everyday goods and service.
-Invest an extra £1 billion per year to build 80,000 genuinely affordable homes to rent and buy in England each year.
2. Deliver an effective benefit system:
– Reboot Universal Credit to make work pay and provide a strong safety net.
– Reform job centres to support people into secure and better-paid work – not just any job.
3. Improve education standards and raise skills:
– Improve educational attainment among children growing up in poverty.
– Double investment in basic skills training so 5 million more adults have basic literacy, numeracy and digital skills by 2030.
4. Strengthen families and communities:
– Radically overhaul the childcare system to give children the best start in life and to make work pay for parents.
– Support strong families and relationships by establishing a family hub in every area.
5. Promote long-term economic growth benefiting everyone:
– Employers support and train their lowest paid staff to get on at work into better paid and secure jobs.
– Give mayors and town halls the incentives, powers and budget to help create more and better jobs and connect people in poverty to economic opportunities.
TUC General Secretary Frances O’Grady said: “Today’s report makes for sobering reading. For millions of families living standards are getting worse not better.
“The JRF’s strategy recognises that unions play a crucial role in increasing wages and winning security and fair conditions at work – which are sorely needed if we are to end poverty in the UK. And so the challenge now is to get unions into more workplaces and get more working people covered by collective bargaining.
“And the government must play its part too. Theresa May must push on with planned increases to the national minimum wage and reverse the planned cuts to universal credit, which will leave even more working people below the breadline.”
Rachael Orr, Oxfam’s head of UK Programme said: “Oxfam welcomes the Joseph Rowntree Foundation’s ambitious strategy to end poverty in the UK by 2030. As one of the richest countries in the world poverty shouldn’t exist in the UK but millions of people across the country are struggling to put food on the table and heat their homes.
“This report highlights a stark reality for poor people, being ripped off twice with low wages and job insecure work compounded by higher prices for essentials like gas, electricity and insurance. Poverty premiums and low pay risk widening the already unacceptable divide between the haves and have-nots.”