Even if the government issued newspaper editors with D-notices banning any public mention of the word “poverty”, it could hardly do more to create a wall of silence around Britain’s biggest social crisis. By eliminating any ministerial admission of our deepening poverty epidemic from public discourse, it has left Britain with a hidden emergency whose forgotten and voiceless victims are the hundreds of thousands of children behind closed doors, in bedrooms without beds, homes without heating and kitchen tables without food, and whose suffering is worsening by the day.
Since the ITV drama Mr Bates vs the Post Office, people across Britain have been asking why it took so long for the government to exonerate innocent post office operators who faced such appalling treatment. In years to come, I believe, people will be asking how it was that government walked by on the other side when thousands of children were suffering abject deprivation, and failed to support them in their hours of need.
For 2024 is already shaping up to be the worst year in living memory for families on the lowest incomes. For nearly 80 years, since the creation of the welfare state, Britain has boasted of a safety net below which no one should fall – a minimum that at least covers the very basic needs of everyone and prevents destitution. But without ever announcing its demise or formally sounding its death knell, that welfare state has been systematically shredded and is now so full of holes that millions of families, already feeling trapped and having to balance their families’ needs with their limited budgets, have nothing to cushion them if they suffer a heavy fall. The result is, as documented in a new report published this week by the Multibank, that food banks and charities have become our country’s last line of defence against destitution – rather than the inappropriately named universal credit.
The first gaping hole in the welfare state is the standard universal credit allowance, which is at its lowest ever level as a proportion of average earnings. Because the overall level of benefits has not risen in line with earnings or inflation during the past decade, payments cannot now cover basic needs. Until two years ago, as much as 73% of a single person’s universal credit was taken up with food and heating. Now, according to the recent abrdn Financial Fairness Trust report, by Donald Hirsch, the cost of food and heating alone would exceed 100% of their benefit, thus forcing claimants to cut back even on these essentials.
The typical family spend 20% of their income on food and fuel. But for families with children on universal credit, the share of benefits required just for food and energy has risen from 46% to 63%, leaving too little to afford basic necessities of life such as clothing, toiletries, laundry and essential goods such as bedding.
But for millions of people, things are even worse because of a second change: punitive but arbitrary cuts cruelly directed at children that have removed long-established family support. The family element of child tax credit – £10.45 a week – is no longer paid to huge numbers of families just because their children were born after 6 April 2017. And the two-child limit means a three-child family now loses even more – £62 a week. Resolution Foundation analysis indicates that by 2028, 55% of families with three children and 77% of four-child families will be thrust into poverty.
A third hole has emerged owing to a set of rules limiting the scope of help. As a result, more than a million people who depend on benefits do not receive the bare minimum necessary to avoid abject poverty. More than 300,000 tenants in social housing are hit by the “bedroom tax”, which again cuts benefit arbitrarily, based not on your need but on how many rooms you have in your home.
Meanwhile, 80,000 families are now being hit by the benefit cap, which says your benefits will be cut no matter your circumstances. And the local housing allowance limit means low-income families must find money from their food and heating budgets to pay rent, which hits the third of children whose parents on universal credit now live in privately rented accommodation. Yet the Conservatives are still talking about further reducing welfare to enable tax cuts.
A final blow is the steep monthly deductions from benefits, which are now so severe that they can be as much as 25% of weekly incomes and in some cases 30%. These are so widespread that about half of families with children are hit – and most of these deductions are for the repayment of loans that had to be taken out because of the unjustifiable five-week delay in sending the first universal credit payment.
All of these problems are compounded by three other changes. Emergency government cost of living help is running out (the last payments are due to end this month). The capacity of charities to step in is also running low as many donors, who have given a little to people who have nothing, have themselves nothing more to give. If families ever had any savings, those have now run dry, forcing more than a million people into the hands of illegal money lenders. According to the Joseph Rowntree Foundation, which has public support for its proposed “essentials guarantee”, four million people, including one million children, are close to destitution.
In an advanced economy, understanding that these privations need fixing shouldn’t be a question of ideology, but a question of decency. Two basic recommendations should be at the heart of this year’s budget on 6 March. First, Jeremy Hunt should announce an urgent root-and-branch review of the entire universal credit system. And second, because of the additional damage done by deductions, the chancellor must show how he will ensure that at a minimum the rates of benefit will cover life’s basic costs, not least by supporting the urgent cross-party appeal to extend the life of the household support fund (HSF), which provides emergency help with food, beds, cookers, washing machines and heating bills.
There are two emotions that the rising level of extreme poverty summon up. The first is anger. Our country is entrenching inequalities between rich and poor with little debate. The second is compassion. We must do everything we can to help those falling through the net. From food banks to pantries and baby banks, all sorts of initiatives have sprung up to bridge the poverty gap. But all those who lead them know that more can and must be done. More than £2bn worth of excess products are estimated to be destroyed or wasted in the UK every year, some landfilled. Putting these unused resources to use would not just be an anti-poverty initiative but an anti-pollution initiative too.
A number of great charities – the Trussell Trust, the Felix Project, In-Kind Direct and the Multibank – have launched an appeal to businesses to join a coalition of compassion that links the companies that have goods people need with the charities that know the people who need them. Part of our appeal is addressed to the government to exempt charities and companies from VAT when goods are donated free of charge, and to provide the £25m a year that Fareshare has called for, which would help to redirect surplus food to hungry families.
But there is another option that is essential to bring immediate relief this winter. From the success in Scotland and Greater Manchester of two pilot multibanks – food banks, clothes banks, bedding banks, toiletries banks, furnishings banks and baby banks rolled into one – a UK-wide network of multibanks is now being created, targeting the acquisition and then distribution of 20m items, from soap, shampoo, toilet rolls and nappies to bedding and cleaning materials. Under this alliance of altruism, foundations are now raising money to pay for goods that companies sell at no more than production cost, and sometimes much less.
Through initiatives such as these we can at least soften the landing for our fellow citizens in desperate need, but it will need a Conservative budget that shows at least a modicum of compassion if we are to repair these gaping holes.
Gordon Brown was UK prime minister from 2007 to 2010
