The most important number from the entire spring statement was not from the Chancellor but from the Joseph Rowntree Foundation. They estimated that over the next year, 600,000 people will be pulled into poverty[1]. The 14.6 million people already experiencing poverty will of course be pulled further down. It appears inevitable that the number experiencing destitution will rise from the already scandalous 2.5million that we have now.
“The rise in inflation to a 40-year high this year is expected to [result in] the biggest fall in living standards in any single financial year since ONS records began in 1956-57” – Office of Budget Responsibility.
A drop in living standards means very different things to different people. It can mean that instead of a new BMW you can only afford a new Volkswagen, or it can mean that instead of using a foodbank to tide you through the last couple of days of the month you need to use a foodbank as often as you are able but are still regularly forced to skip meals[2].
It may be you wish no-one to see a drop in living standards, but you would expect a Chancellor faced with the largest falls in the standard of living in 60 years to target support at the families whose choices are bleakest, who face poverty and destitution rather than those families with more money and more options. You might expect that, but it is not what has happened.
Focusing support on the top half of earners
2/3rds of the £18Bn in household income support measures announced in the Spring Statement will go to families in the top half of the income distribution. This is not even spreading the money equally – a crude idea of justice that ignores human needs – it is worse. The choice was to focus new money on the better off – encouraging footfall at both BMW dealerships and foodbanks.
The IFS estimates that inflation will reduce the buying power of benefits by over £10Bn. The changes to Income tax and National Insurance thresholds are presented as helping the least well off but they are irrelevant to those with low or no wages. The poorest paid and those unable to work due to illness, disability or caring responsibilities, are not touched by these tax changes, and in reality, the majority of the money spent on them goes to the top half of the income distribution.
The heavily means tested benefit system is specifically designed to target money at the least well off – instead of being invested in it was allowed to wither. The resources were there to reduce or even prevent a rise in poverty. £18Bn properly targeted using the existing tools would have been enough if helping the least well off was the priority.
Ignoring the reality of life in disadvantaged communities
Over the past few months, more and more worrying data describing the upcoming rises in the cost of living began to come in. With colleagues from the Church at the Margins team, we held informal meetings with church leaders who serve in disadvantaged areas, as well as speaking with people who battle with poverty themselves. The response to an explanation of the cost-of-living rise was usually a tired stunned silence.
The last decade has seen the fabric of our poorest communities worn thin, and the gap between many people’s incomes and the bare minimum needed to live reduce to almost nothing. The pandemic hit the poorest hardest, with the least well off experiencing the largest health and economic consequences. During the pandemic overall household debt went down and savings increased because higher earners had reduced opportunities to spend, at the same time poorest who were most likely to lose jobs and income had no choice but to rack up debt. Between March 2020 and October 2021 the number of people struggling with bills and debt has doubled from 7.5 million to 15 million.
Today’s reality is that church-based charities are routinely needed to enable many children to go into school clothed and fed. In this context tired stunned silence is the appropriate response to hearing about another bigger wave of hardship on the way.
Communities not just households affected
While budgets are always analysed by household it is important to recognise the impact on communities. Poverty concentrates: households of similar incomes congregate in the same places, go to the same schools, shop in the same shops, even go to the same churches. Shared struggle and hardship can lead to solidarity and mutual support – the community action during the pandemic is rightly celebrated example, but initiatives like Poverty Truth Commissions and Local Pantries are part of a long tradition of harnessing the solidarity that adversity can bring. However, how the fragile infrastructure that enables communities’ bonds to flourish can hold when hardship is widespread and destitution becomes commonplace is difficult to see.
There are lots of numbers and data to spell out the scale of the problem. The reality of the cost of living crisis was hit home to me by Amy*, a church volunteer, who relies on Universal Credit payments long term due to disability. Her estimated energy bill has doubled – taking up over half her after rent income. She told me “There is simply nothing left to cut”.
Difficult times ahead for the least well off
Over the next few months price rises are likely to affect most of us. Our next energy bills may provoke outbursts of unchristian language and we will face unwanted and unexpected spending choices to keep our budgets on track. Most of us however will not face Amy’s choices.
It is clear that the Spring statement did not focus on people like Amy. I would argue that the role of the church and individual Christians is to keep our focus on those, like Amy, who will face the harshest choices. We can pray, we can act by giving volunteering to projects that will address the increasing needs and we can campaign to make known the stories of those facing poverty and destitution so that the next financial statement has them at its heart.
[1] Resolution Foundation estimates that 1.3 million will be pushed into “absolute poverty” which has been the Government’s preferred measure of poverty. JRF’s 600,000 estimate is for “relative poverty” which is the measure we have preferred.
[2] That may sound dramatic but the recent Trussell Trust Report tells us that already 3 meals a day is no longer affordable for many even with the help of foodbank.
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