Between 2021-2022 people in Britain experienced the biggest rise in relative poverty since the 1980s. Real-terms cuts in benefits, poverty pay wages, soaring housing costs and inflation mean that increasing sections of the working class are facing the most savage attack on their living standards in more than 50 years as the British state forces them to pay for its deepening crisis. Government figures published at the end of March show that in 2021-2022, a fifth of the population was living below the poverty line (calculated as 60% of median wages); this included 800,000 children. The Resolution Foundation’s research shows poverty has increased even more sharply in 2022-2023. With the Office for Budgetary Responsibility predicting a fall of 5.7% in living standards over the next financial year – the sharpest two-year decline since records began in the 1950s – this intolerable situation can only get worse. In the past, the British state has been prepared to use taxes on the better-off sections of the working class to support the poorest sections. That is no longer the case, and the consequences for the poorest are brutal, with the most drastic measure being to drive down the cost of working-age benefits.
The attack on benefits
Benefits have plummeted to a 40-year low in real terms. The basic rate of Universal Credit (UC) is at around 13% of average earnings, its lowest-ever level as a proportion of wages. It is impossible for those relying on benefits to make ends meet. A joint report by the Joseph Rowntree Foundation and the Trussell Trust calculates that 90% of those on UC cannot afford the essentials of life including food, heating, hot water, electricity, travel, basic toiletries and cleaning products.
The report calculates the cost of such essentials at £120 per week for a single adult over 25; the standard UC allowance is £85 per week. This represents a £140 shortfall per month for a single adult and a £264 shortfall for a couple. In reality more than half of households on UC do not even get the standard allowance because of benefit caps and deductions. The five-week wait for the initial payment forces claimants to get loans or advances from the DWP. These are then recouped directly from their meagre benefit payments, trapping them in debt. An adult facing deductions will typically see the standard allowance drop from £85 to £64 per week. In 2021-2022 – even before the £20 uplift was removed – one in six UC claimants was dependent on food banks to survive.
In its mission to cut back on the payment of benefits and force people into work, the DWP has introduced an even more severe regime of punishment and control. Since February, thousands of UC claimants have been moved from the ‘Light Touch’ group to the ‘Intensive Work Search’ group. The measure targets those who remain unemployed or on low earnings after 13 and 26 weeks of claiming UC who are expected to raise their hours of work. The definition of ‘low earnings’ has been revised upwards. Claimants will be forced to attend Jobcentres ten times a fortnight on pain of being sanctioned and losing their benefit altogether; they can be sanctioned for missing just one meeting. It is part of a raft of attacks on benefits which include forcing single parents to work up to 30 hours a week once their youngest child is three. To increase compliance by staff enforcing this regime, the DWP has introduced league tables for staff, offering vouchers of up to £250 for the best performing Jobcentre.
Working to be poor
The government continues to peddle the myth that ‘the best way out of poverty is through work’. Yet its own figures show that 54% of those in poverty live in a household where at least one adult is working; more than two thirds of children in poverty live in such households. Even in better-paid jobs, wages have been slashed in real terms by soaring inflation. Many nurses and teachers are forced to resort to using food banks on a regular basis.
Inflation reached 10.4% in February, compared with 5.5% for the same period last year. It is not expected to fall significantly until the summer. Yet in the three months to January 2023 average regular pay (excluding bonuses) grew by just 6.5% – a fall in real terms of 3.6%. Wages no longer cover rent, energy bills and the price of food. For jobs that pay the minimum wage, every adult in the household needs to be working full time to stave off poverty.
Around one in three adults is finding it difficult to afford rent or mortgage payments. Evictions and homelessness are on the rise. Energy bills may have been frozen at the current level of £2,500 for a further three months, but for many this is still unaffordable.
Going hungry
Food inflation rose to 18.2% in February, the highest ever recorded. In a single-day survey in January, the Food Foundation found that 22% of households reported going hungry, up from 12% in 2022. Food banks are handing out a parcel every 13 seconds. The Resolution Foundation predicts that ‘very low food security’ – the most severe category – will increase dramatically in 2022-23. Poverty for millions of children is at extreme levels; it is particularly prevalent for black (53%) and Asian (47%) children, compared to white children (25%), and in regions such as the northeast, where government figures show 200,000 children have been living in poverty for the last three years. The number of children in food insecurity has almost doubled to four million in a year.
In the Spring Budget, Chancellor Jeremy Hunt stated that the government would not hesitate ‘to take whatever steps are necessary for economic stability’. For capitalism, those steps require restoring profitability by driving down the living standards of the working class. They mean increasing poverty, hunger and exploitation. The only response must be to fight back.
Mark Moncada
FIGHT RACISM! FIGHT IMPERIALISM! 293 April/May 2023
