18th September 2023 – (London) The U.K. is experiencing a collapse of its social contract as millions of low-income families are forced to endure unacceptable levels of poverty. An independent cross-party report by the Poverty Strategy Commission warns that poverty rates are far too high and hardship is becoming more extreme. It estimates that significantly reducing poverty would cost £36 billion annually – equivalent to £6,000 per year for 6 million families. But without urgent action, a ‘more of the same’ approach will fail these families.
The report reveals that not only have relative poverty rates barely fallen over the past 20 years, remaining between 21-24%, but progress in areas like pensioner and single-parent poverty has reversed. Deep poverty, measured as incomes at least 50% below the poverty line, has also grown sharply, affecting nearly a third (31%) of those officially in hardship. This deep poverty leaves families struggling to afford food, energy, clothes, rent and bills.
The social contract between state and citizen is routinely failing, with the social security system unable to protect people from poverty even when working, disabled or retired. A 5% uplift in benefits and wages is proposed for those in poverty, alongside reducing costs for housing, childcare, disability, energy and transport. But the report insists that poverty cannot be tackled by income alone.
There is a lack of urgency from the main parties over the scale and nature of U.K. poverty. Society is failing to offer adequate protection for its poorest members. Without a new political consensus on reducing poverty, millions will continue barely surviving rather than living.
The Child Poverty Action Group reveals how even before the cost of living crisis, rising housing costs were expected to drive a 50% increase in child poverty by 2026/27. Over 4 million children would be in poverty, reversing progress made since the 1990s. But now energy price rises risk pushing a further 1.3 million children into poverty.
Already in 2020/21 there were 3.9 million children in poverty after housing costs, equating to 30% of all children. Analysis shows children in poverty are disproportionately from minority backgrounds and lone-parent families. Poverty damages children’s health, educational attainment and life chances.
There is outrage that a country as wealthy as the UK allows such deprivation and inequality. Anti-poverty charities report unprecedented levels of need, with food bank usage soaring. Yet Sunak rules out further cost of living support, absurdly claiming ‘the worst is behind us’. With inflation still nearly 10%, millions face a winter of despair.
Experts warn high inflation will not just dissipate, predicting years of wage stagnation. Analysis shows real wages are still below 2008 levels, with low-paid workers suffering most. Despite worker shortages in many sectors, even average real wage growth lags far behind inflation and is forecast to be negative in 2023.
Most wage rises are in high-paying jobs, entrenching inequality. London finance jobs see far higher pay growth than other regions. With prices still surging for essentials like food, inequality between richest and poorest regions grows ever wider.
There are demands for an increased minimum wage, benefit rises in line with inflation, and fair public sector pay. The government disparages such policies as fuelling inflation, but provides tax cuts for the rich and lifts the cap on bankers’ bonuses. Their twisted logic claims making the poor poorer will make us all richer.
All the while, the UK’s 152 billionaires grow ever wealthier, with their combined fortunes rising £54 billion since the start of 2022. Yet Sunak opposes further windfall taxes, allowing energy giants’ obscene profits. His failure to make super-rich pay their share exposes the gross inequality at the heart of British society. Fairer taxes could raise billions to tackle the burning injustices of poverty.
With British society fracturing under extreme pressures, there are warnings it faces a perilous winter of discontent. Public sector workers strike in droves over pay, with nurses, teachers and rail staff among those walking out, enjoyed wide public support as people’s living standards collapse.
Yet the government threatens draconian strike laws to enforce pay restraint. Their authoritarian clampdowns on protests cannot quell rising social unrest over deepening deprivation. Polls show most people favour tax rises on the wealthy and believe poverty is inevitable in modern Britain.
Charities report unprecedented levels of need and a mental health crisis intensifying amid the extreme financial pressures. Food bank usage has soared as parents skip meals to feed their children. But Tory politicians remain comfortably insulated from such intolerable hardship in one of the world’s richest countries.
Without radical action to tackle shameful poverty levels, divisions in British society will widen further. Concerted investment in strong public services, affordable housing, decent jobs and a properly funded social security system is desperately needed. The social contract has collapsed, and a government for the rich pursues policies that abandon the poor. Britain faces a stark choice between deepening inequality and despair, or a fairer society that cares for all.
