Oxfam warns of “Perfect Storm” of UK poverty

Today, Oxfam released a briefing paper: The Perfect Storm: Economic stagnation, the rising cost of living, public spending cuts, and the impact on UK poverty.

The paper warns of an assault from all sides on Britain’s poor, caused by a toxic combination of rising unemployment, declining incomes, increased cost of living, public service cuts, benefit cuts, housing shortages and weak labour rights.

The government‟s rapid deficit reduction measures are hitting the livelihoods of almost everyone in the UK, but the particular approach taken is hurting people living in poverty the most. The focus on cutting public spending rather than raising taxes is deeply regressive, and the blend of tax increases chosen is itself regressive. In addition, both public spending cuts and the tax and benefit changes introduced by this government will have a significantly more negative impact on women than on men.

At the same time, we are seeing a synergy of economic and social needs. Protecting the incomes of the poorest people is crucial for both social and economic reasons. It is people on low incomes who are being hurt the most by the Perfect Storm, and increasing the incomes of the poorest will have the strongest multiplier effect on aggregate demand in the economy. By prioritising and targeting social and economic investment, the government can ensure that it protects the services upon which those in poverty most rely, while helping to boost demand and provide investment in the long-term productive capacity of the economy.

Oxfam are calling for decisive action to safeguard the increasing number of British people living in poverty, which shames our status as one of the richest nations in the world.

Protect the incomes of the low paid, reducing the withdrawal rate of Universal Credit from 65 per cent to 55 per cent to ensure that work pays, and increasing the National Minimum Wage at least in line with inflation or average earnings, whichever is the higher;
Protect people in poverty from the increasing cost of living, by giving new powers to Ofgem to cap fuel prices; introducing a maximum level of interest; and protecting the Social Fund and expanding its resources, to protect people from exploitation and to guard against problem debt;
Protect public services, by using progressive taxation to slow the speed and depth of cuts; ring-fencing the Sure Start grant to local authorities in England; and exploring investing in a national system of universal child care, to make work pay for women and to build the social infrastructure of the country;
Protect the social safety-net, by giving local authorities in England and Wales sufficient resources to maintain existing levels of Council Tax Benefit; monitoring the effect of the Housing Benefit and overall benefit caps; reversing the switch from RPI to CPI inflation for benefit uprating; maintaining real Child Benefit levels; and reversing cuts to child-care support;
Provide secure, affordable, decent housing for all, by investing in affordable homes to boost the economy and to help solve the housing crisis; and increasing maximum penalties for rogue landlords;
Protect rights at work: the weak labour market is adding to the power that employers have over workers, and so it is essential to maintain and enforce the vital protections that do exist for vulnerable workers;
Move towards a fairer tax system by clamping down on tax avoidance; introducing a Robin Hood Tax on financial transactions, to help protect public services and benefits and ensure that everyone pays their fair share; and exploring options for a land value tax; and
Rethink how we measure value: the social damage caused by inequality, high unemployment, and environmental degradation all tell us that it is not growth that matters, but the type and distribution of growth; measuring true social value through a measure of well-being such as Oxfam Scotland‟s Humankind Index will help us to measure whether what we are doing to fix the economy is really, sustainably benefiting society.

While such a paper wouldn’t be so surprising if it came from the likes of, say, UKUncut, this is from a major charity more usually associated with providing aid to the developing world. That they now feel it necessary to speak out about the way we treat our own poor may speak volumes about the increasing levels of inequality and hardship on our doorsteps.

You can read the full briefing paper here.

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About Zarathustra

Trained as a nurse, currently working in Child and Adolescent Mental Health Services (CAMHS). Co-editing the Not So Big Society blog. May possibly be an incorporeal being called Phil Dore. All views expressed are in a personal capacity and not necessarily the views of my employer.

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