Paul Nicolson – The Poverty Trap

Our Chairman, Rev Paul Nicolson, had the following letter published in The Times this morning.

Sir, Maria Miller (letter, Feb 7) claims that the Universal Credit will lift 350,000 children and 550,000 adults out of poverty — but she comes to this conclusion by using the income threshold before housing costs have been deducted (BHC), below which people are deemed to be in poverty. However, poverty is at its harshest when measured after housing costs have been deducted (AHC). Using the latter measure the Universal Credit cap will add to the misery already created by the housing benefit caps. The higher the rent which is capped, the worse the misery. The level of a single adult’s Job Seekers Allowance is now £67.50 a week and will continue at that level as the Standard Allowance in the Universal Credit in 2013. The two caps create rent arrears which have to be paid out of that £67.50, if the children’s or disabled people’s additional benefits are not to be reduced by the debt. It is already half the governmental poverty threshold and is expected by the Centre for Research in Social Policy to be reduced by £1 a week every year as a result of the coalition moving the annual uprating from the retail prices index to the consumer prices index. The Joseph Rowntree Foundation estimates that a healthy diet costs £47.31 a week. The Royal College of Psychiatrists reports that poverty and debt are trigger factors for, and part of, the experience of those with poor mental health. It is an impossible struggle to pay bills as prices rise and AHC welfare incomes fall.

Protests outside Houses of Parliament

Yesterday the government was defeated by Labour and Crossbench Peers three times over the Welfare Reform Bill. Z2K is very pleased that these excellent ammendments that protect the disabled were passed and we hope that they survive when they return to the commons. They also give us hope that our own ammendments, which are still to be debated, do well.

On the same day there was also a demonstration outside the houses of parliment. Here’s a video where you can see our Chairman, Rev. Paul Nicolson, taking part.

Please sign our statement opposing benefit caps in London

The following statement will be sent to Peers considering the Welfare Reform Bill. Please sign it below no later than the 7th of January. Alternatively if you are an NGO and would like to add your name, inform us at benjenkins@z2k.org.

To Peers considering the Welfare Reform Bill.

A statement opposing benefit caps in London.

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An open letter to Lord Freud

To The Minister for Welfare Reform.  

Listening to the debate on the benefit caps yesterday, and their obvious responsibility for increasing the unaffordability of housing for many of the poorest citizens in the UK, it became ever clearer that tenants are being asked to carry the pain of deficit reduction for the landlords and landowners;  who are untouched by the ferocity of measures in the bill creating debts, eviction and misery. That injustice is spelt out in the following letter which was put together with my colleagues in the Pro-Housing Alliance.

There is a fundamental injustice at the heart of deficit reduction in the UK . Landlords have annually taken billions of pounds of taxpayers’ money in housing benefit by raising their rents to keep up with a housing market in short supply,  but awash with the reckless lending of many financiers in the City of London since deregulation was allowed by Parliament in the 1980s. It rose to £21 billion in 2010. Around £3.5 billion was paid to sustain the unhealthy tenancies of neglectful landlords that give rise to significant but avoidable costs for the NHS in 2009, when 4.7 million (21%) of England’s 22 million homes were unhealthy, unsafe and poorly maintained.

The coalition’s response to the inevitable crisis has been to take a total of £18 billion from welfare claimants and nothing effective from landlords. It would be squeezing an already dry lemon to expect claimants to take any more cuts. Parliament should look for alternatives which require landlords and landowners to pay their share. It is essential to create  a coherent national housing and land policy, the first in living memory, to cover every aspect of housing for all, rich and poor, that puts decent housing at the heart of national health and wellbeing.

Parliament should also explore how a land value tax could replace council tax, business rates, and abolish the other inefficient taxation measures such as stamp duty, capital gains exemptions, and second home council tax discounts that have helped create the current inequalities of health and wealth in our society.

Stephen Battersby, President, Chartered Institute of Environmental Health.

Peter Ambrose, Visiting Professor in Housing and Health, University of Brighton.

Peter Archer, Chair, Care and Repair, England.

Stephen Hill, Director- C2O futureplanners.

Rev Paul Nicolson, Chair, Zacchaeus 2000 Trust.

Childcare

The Resolution Foundation has released an authoritative report on the failures of childcare to meet the needs of working parents in the UK today. As expected the uncertainty over how help with child care costs will delivered under Universal Credit is highlighted. The DWP are still considering a range of options despite the Welfare Reform Bill having passed through the commons and being due in the Lords this autumn.

In modelling one of the favoured options, 70% of costs up to £125 for one child and £210 for two or more children, Donald Hirsch found that a second earner on £7.20 an hour with two children aged two and five keeps just £1.75 for every extra hour worked up to 15 hours. Once she works over 20 hours the amount she keeps for each additional hour drops to 66p. And if she works over 30 hours she actually loses 24p every hour she works. This clearly fails the coalition’s own test that work should always pay.

In London and the South East, where childcare costs are higher, parents will pay more out of their own pocket more quickly as they take on more work. Last week Z2K attended a childcare seminar run by 4 in 10. There Veronica King of the Daycare Trust discussed the Childcare for the Capital’s Children campaign which aims to improve affordability of childcare in London. We share their hope that it will be a central issue during next year’s London Mayoral elections.

As the Daycare Trust noted at the seminar work is one of the best routes out of poverty for low income families, so it is essential that these difficult problems are addressed by the coalition if they are to fulfil their promises and obligations.

On the fault lines of fractured Britain – Guardian, 3rd June 2011

On the fault lines of fractured Britain

Behind the Department for Work and Pensions press release about benefit fraud of £l.5bn (Chav: the vile word at the heart of fractured Britain, 31 May) has been debate in the welfare reform bill committee about the £2.6bn of benefit claimants’ debts which are the result of overpayments made in error. Administrative errors in tax credits are not recorded by HMRC but have been very substantial. Enforcement of these debts against claimants has been illegal since 1975, if they were in no way their fault, a law endorsed by John Major’s government in 1992 – but it will be allowed in the welfare reform bill at the discretion of the same officials unless peers maintain the status quo when the bill reaches them. Continue reading

Marmot: new data on the link between wealth and health inequalities

This morning Sir Michael Marmot published data showing how unequal health outcomes are between the richest and poorest parts of the country. Life expectancy and time spent in good health are shown to be heavily linked to social standing.

Some key point picked out by Randeep Ramesh in today’s Guardian are:

  1. 60% of five-year-olds in some of Britain’s poorest areas do not reach a “good level” of behaviour and understanding – double that found in wealthier suburban parts of England.
  2. Marmot, a public health specialist and author of Fair Society, Healthy Lives, said: “Education and child development are key for health. It is the educated who stop smoking … we know the key driver of teenage pregnancy is not getting early child development. You are not going to get pregnant as a teenager if you develop as a child.”
  3. There was also an alarming health gap opening up within areas. Marmot pointed out that in [Z2K’s home borough of] Westminster the average life expectancy of male residents was 83, five years longer than the English norm, but this masked wide disparities. The poorest in the London borough could expect to live 17 years less than the richest.

This evidence futher supports the need to support a minimum income standard across the UK so that people can afford to feed them selves and thier children a healthy diet, heat thier homes and while staying out of debt. The to the UK of failing to do this are currently  unpriced but likely to be large. The government already predicts that mental health (which is strongly linked to debt) costs the economy £105 Billion a year.

We must hope that the Welfare Reform Bill, due for publication next week, recognises the negative implications for everyone of imposing poverty incomes on the poorest.

Reform Criticises Welfare Reform

Writing on a blog last week for the website Public Finance Dr Patrick Nolan, chief economist at leading think tank Reform, has strongly criticised the coalition government’s Welfare Reform Bill.

He calls for what he describes as “expensive and poorly thought-out” reforms to be immediately abandoned. Not enough attention has been paid to how the Universal Credit will be delivered and, it is argued, this lack of detail is likely to lead to expensive mistakes down the line.

He rightly acknowledges that as the scheme is proposed it is likely that many will be trapped in a cycle of dead-end, low paid, unskilled jobs as there is no incentive to find secure, skilled work. However he fails though to point out the inadequacy of Job Seeker’s Allowance and the Minimum Wage to provide a healthy lifestyle, inhibiting both job seeker’s ability to find gainful employment and many workers from lifting themselves out of poverty.

This very real problem faced by many of Britain’s poorest and their dependents, who make regular decisions about whether to eat or heat their homes, will not be solved until the Department of Work of Pensions considers the health of those on poverty incomes and the Department of Health considers income.

For more evidence on the shortfall between these poverty incomes and a minimum income standard, see Z2K’s response to the DWP.