Poverty in the UK: Joseph Rowntree Foundation report

A new report on poverty contains key information about how society is changing – changes that are likely to influence the shape of struggles to come, writes Colin Wilson.

The Joseph Rowntree Foundation’s recent report shows the government’s claimed “economic recovery” is doing little for large numbers of people – we live in a society increasingly polarised between rich and poor.

Half of people on low incomes can’t afford to replace broken furniture, and have no chance of going on holiday. 1 in 5 people in social rented homes, and 1 in 6 in privately rented homes, can’t heat not just their home but their living room in winter – either because they can’t pay for fuel or their home is in such poor condition.

The statistics also make clear that groups of people already suffering disadvantage are more likely to experience poverty. Over 1 in 4 families where someone is disabled live in poverty, while for families where no one is disabled the figure is less than 1 in 5. Pakistani, Bangladeshi, Caribbean and African people are all twice as likely to be unemployed as white people.

It’s a depressing business, reading one statistic after another about the extent of deprivation in one of the richest countries in the world – though if you want statistics for a union leaflet or to back you up in an argument, this is the place to come. But what is interesting in the report is that it reflects social changes that will set the framework for future struggles. We’ve no way of knowing how big those struggles will be, or where they will break out. But these figures provide us with some context for the current political situation.

Incomes going down – and into privatised pockets

Since 2002, everybody’s pay has gone down in real terms, because it’s fallen behind the rising cost of the things we need to buy. The rich suffer very little, the poor much more – the income of the highest-earning ten percent has hardly fallen at all, while that of the lowest-earning 10%  has fallen by 9%.

Price inflation varies between different things. The cost of clothes, for example, has actually fallen by 26% in the last ten years. The cost of items like phones and computers has stayed much the same. You might conclude that the world market is unpredictable, so what can the government do?

Except, the cost that had increased the most is domestic energy like gas and electricity – up by 150 percent, five times the average increase of thirty percent. Next comes public transport – at 88 percent, almost three times higher than the average. Domestic water bills have gone up by 70 percent. All these are privatised industries with government-regulated prices. So the Coalition, and Labour before them, are taking big money out of people’s pockets to make profits for privatised utilities. They could cut those costs overnight.

Young people are suffering the most

There has been a remarkable change in the age distribution of poverty. Ten years ago, poverty was highest among pensioners: over 1 in 4 people aged over 70 was poor. Since then, the proportion of elderly people living in poverty has halved. Those over 65 are now the age group least likely to be poor.

Young people – those under 25 – were always poor as well, though not as poor as pensioners. But while the poverty of the elderly has decreased, that of young people has gone up – 1 in 3 people aged 16-19 is now poor, and over 1 in 4 people aged 20-25, compared with 1 in 6 people in their fifties. One reason is that people under 25 are much more likely to be unemployed – 18 percent are on the dole, as compared with 5 percent of those aged over 25.

Figures from other sources show that young people are disadvantaged in other ways. The most recent government statistics about trade union membership were published in May: they show that union membership levels for young people is less than half of that for older workers – 40 percent for those aged 35 to 49, as against 19 percent for those aged 25 to 34. Since union members are better paid on average than non-unionised workers, this contributes further to young people’s poverty – and also increases their insecurity at work, since they can’t get support from the union when they have problems. Young people are also more likely to live in substandard housing – government statistics on housing show that 44% of those aged 25-34 are living in privately rented homes, as opposed to less than 10% of those over 55, and privately rented housing is typically poor quality and insecure.

It’s one thing to have insecure work and housing in your twenties if you expect things to improve later – for example, if you can hope to get better housing with either a mortgage or from the council. But rising house prices, and reduced availability of both mortgages and council properties, mean those are much less likely options.

Poor quality, private rented housing is a growing problem

Ten years ago, out of 12.9 million people living in poverty, 2 million lived in private rented housing. Now it’s twice as many. Private renting is insecure – the most common reason for homelessness is now the end of a private tenancy. It’s often of poor quality – over 1 in 3 private rented homes is “non-decent”, twice as high as social rented homes, while 1 in 7 private rented homes is damp, again higher than all other tenures.

People with low incomes pay more for housing as a share of that income, wherever they live. But private rented homes also cost much more than social rented or mortgaged ones, even if you’re wealthy. Those two factors together mean that people with mortgages, in the top fifth as regards income, spend only 10 percent of that income on housing. People with income in the bottom fifth, in private rented places, spend over 50 percent. They are forced to live in poor housing, which they can’t really afford, because council waiting lists are enormous and they can’t afford a mortgage.

London is supposed to be the success story – but isn’t liveable for many

London’s economy, and that of the south east to a lesser extent, are growing faster than the rest of Britain. The government expects London’s economy to grow by 4.2% this year, while north east England will grow by half that. London has always included extremes of wealth and poverty – areas like Mayfair, to the west of central London are huge enclaves of the rich, while Tower Hamlets, to the east, is one of the poorest boroughs in the country. The last few years have ratcheted up those differences. Posh London has become a haven for the international super-rich – the Financial Times has speculated that “eastern European oligarchs are using the capital’s housing market to conceal their assets from international sanctions.”

This has pushed up house prices and rents, and the boom pulls in yet more people and so drives up prices further. So, as the Joseph Rowntree report explains, the average house price in London is £424,000, while in the East Midlands it’s less than half that, £173,000. So even middle-class people can’t afford to buy a home, and for people on low incomes the situation is dire – repossessions by landlords in London are more than twice as common as in north west England.

Work: slowly getting worse

The government has portrayed the poor as work-shy, living in idleness on benefits. The fact is that around 4 out of ten people living in poverty are in work – and the numbers of the working poor are increasing, while the numbers of the poor on benefits are falling. The government claims that it wants to get people off benefits because work is a way out of poverty – but it isn’t. The report looks at the people who were working on low pay in 2002 – are they working on good pay now? Only 1 in 5 are – most people in low-paid jobs stay in low-paid jobs, or move between low-paid work and benefits.

Under the Thatcherite recessions of the 1980s, unemployment rose. That’s not the case now – employment levels are at a record high. But what kind of work are people in? For one thing, around a million people are working part-time who would like full-time work. Over a million people are on zero-hours contracts. But it’s also important not to exaggerate the extent to which work is precarious: there was a trend in the 1990s for the number of temporary contracts to increase, but this peaked in 1997 and the level is now lower than it was then. Zero-hours contracts are a real and disturbing trend, but are heavily concentrated in certain kinds of work – most of all accommodation, food, admin and other support services, followed by wholesale, retail, transport, arts, health and social work. But there’s no doubt, whatever the statistics, that work feels more precarious. What’s more, many of us in work are aware that if we do lose our job, we have little to fall back on – 1 in 3 households are either in debt overall, or have a net wealth of less than £500.

So, what political conclusions can we draw?

As I say, we’ve no way of knowing for certain how big future political struggles will be, or where they will break out. These things often surprise us all – no one would have thought a year ago that the independence referendum in Scotland would focus millions of people’s desire for change in the way it has. But, if we’re to organise politically, we have to make the best guess we can, and prepare to be proved wrong.

To judge from the Joseph Rowntree report, workplaces are unlikely to be the first area where struggles break out. There are reasons to fight, such as falling pay and, for those workers affected by them, temporary and zero-hours contracts. But those contracts both affect minorities, and we know that pay campaigns have recently collapsed in both local government and higher education. It seems more likely that future struggles will reflect some aspects of the situation of young people – and it was interesting to see, in that light, that most of the people protesting over Ferguson and British police racism last Wednesday were under thirty. Housing certainly seems a topic where there’s an increased level of campaigning, both at the grass roots and in parliament. But the truth is that we can’t know what will happen – there is no guarantee that suffering produces resistance. All that we can do, as Daniel Bensaïd put it, is to prepare and be ready for the unexpected.