Tackling poverty and the value of benefits
by Graham Whitham
Poverty is a problem that has worsened in recent years, not just in terms of the numbers of people experiencing poverty but in the way that poverty manifests. In Greater Manchester we have seen a significant rise in the number of people who are homeless, with 3,292 people in the city region ‘surviving without a home’ and many more living in temporary accommodation. People are increasingly reliant on food handouts from emergency food providers.
Whilst there’s much we can do in Greater Manchester to address the issue, it is central government policy which has the most direct impact on people’s living standards and on levels of poverty. Whoever forms the new government after the General Election they will have to get to grips with deeply entrenched levels of poverty in the UK and take steps to stop poverty increasing over the coming years.
The reasons why poverty exists in Greater Manchester, and in the UK as a whole, are well understood; high living costs, a housing market that is incapable of meeting everyone’s needs, a broken social security system that fails to provide a sufficient safety net and an economy that relies too heavily on insecure and low paying work in order to function are all among the structural factors that result in people experiencing poverty and hardship.
The party manifestos all suggest measures that go some way to addressing some of these factors, but none of them presents a comprehensive strategy for tackling poverty. In particular, there isn’t enough of a focus on recognising the importance of the value of benefits. As the IFS have shown, it is the failure of benefits, particularly benefits for those of working age, to keep pace with the cost of living that has the greatest impact on levels of poverty over time. Yet the value of benefits relative to earnings in the UK is among the lowest of the developed nations.
This isn’t a new problem, with the value of certain benefits no longer reflecting what is needed to meet living costs. For example, since the 1970s the value of unemployment benefit has failed to keep up with changes in the cost of living. In 1948, unemployment benefit and the state pension were set at the same value. The level of the basic pension is now more than 50% higher than Job Seeker’s Allowance and this gap is likely to grow over coming years.
The fall in the real terms value of working-age benefits over a number of decades has coincided with a shift in public attitudes. Public support for spending on benefits generally, and on some specific benefits, has fallen considerably since the early 1980s. Moving to a place where we have a social security system that is effective at driving down poverty requires political will, but also a shift in public attitudes so that support for increases in benefits gets the buy-in from the public it needs to ensure improvements to the social security system are sustainable. Or to put it another way, politicians are less likely to cut, and more like to increase, social security benefits if there’s widespread public support for them.
With a new mayor and new powers in place in Greater Manchester there is a real opportunity to do things differently here and to act as a beacon to the rest of the country, identifying effective ways of tackling poverty and improving living standards. However, national government policies must not just complement these efforts but provide the framework and conditions for a poverty free UK.
This has to include an improvement in the value of benefits.