New research provides Parliament with a harsh reality check as millions of working UK families slip further towards penury, reports Dick Skellington.
Over 7 millions households in the UK with working-age adults are now living in extreme financial stress despite being in employment and largely independent of state support, according to a comprehensive survey of working households commissioned by the Guardian.
The study was published as Works and Pensions Secretary Iain Duncan Smith advocated that parents should secure employment in order to ensure their children did not fall into poverty. The study found that 2.2 million children currently live in households in extreme financial stress.
Over 3.6 million British households have no savings, no equity from their homes, and despite their employment, many still struggle to feed themselves and their children. These squeezed working families are particularly vulnerable to unexpectedly large fuel bills, and are becoming increasingly marginalised as welfare and policy changes impinge further on their income.
This group consists of "traditionally proud, self-reliant, working people", said Bruno Rost, head of Experian Public Sector, who used more than 400 variables from Experian's database and government research to identify those belonging to At-Risk Britain. After removing from the research households in the "most deprived" categories, Rost's team focused on those who are working but are nevertheless suffering high levels of financial stress. "These are the new working class – except the work they do no longer pays," Rost said.
The Experian findings challenge the Coalition Government's claim that people are better off in work than on benefits. The research found that 2.2 million children live in families teetering on an economic cliff-edge – despite one or both adults earning a low to middle income. The households in trouble include couples without children who earn a gross annual income of between £12,000 and £29,000, or couples with two children earning between £17,000 and £41,000.
Experian's research into 26 million households across the UK, identified eight types of employed adults most likely to be suffering in-work poverty, including self-employed tradespeople living in small communities,people in ethnically mixed communities and single people who are living in the centre of small towns, and young owners and private renters in inner-city terraces.
This is not exclusively a northern or inner city problem; it include large tracts of south-west England, outer London and East Anglia, with low- rise estates particularly at risk especially in thehitherto more prosperous seaside resorts of Torquay, Paignton and Brixton.
Average regional salaries have changed dramatically over the past five years. People working in the Blackpool South parliamentary constituency have the lowest average wages in the UK – £320 a week, compared with £1,305 a week in the London borough of Kensington, according to further research commissioned by the Guardian from the Resolution Foundation.The four constituencies with the lowest average wage are in north-west England; those working in Blackley and Broughton, Preston and Middlesbrough earn an average salary of between £323 to £330 per week.
The study backs up the disturbing Perfect Storm report, published in June by Oxfam, which reveals that the number in work but also claiming benefit has doubled since 2005, and now totals more than 1 million people. Oxfam report a significant rise in the number of households now using food banks.
There was worse news on 5 July when the child welfare charity Kids Company revealed that two children in every school class are going hungry because their parents can not provide effective meals and nourishment. "A lot of agencies who could help are short of funding and they are having to gatekeep more or refer more," Kids Company's founder, Camila Batmanghelidjh, said. "I have been at street level 21 years, and lack of food in the last year-and-a-half has become a much more widespread problem than we have seen before. I know of a collective of parents who are shoplifting just to feed their kids."
At the end of June, Prime Minister David Cameron announced that the Government would consider scrapping housing benefit for the under-25s to send out a clear signal that work pays, that welfare benefits are not an entitlement, and that the family should play more of a role in welfare. His proposal affects 380,000 people, including over 200,000 children. The removal of this temporary safety net, if it became policy, would further compound the difficulties currently being experienced by the new working class on the brink of penury.
Dick Skellington 6 July 2012
The views expressed in this post, as in all posts on Society Matters, are the views of the author, not The Open University.
Cartoon by Catherine Pain
