19 million Brits are on the edge of poverty even though nearly everyone has a job — and it’s going to get worse

LONDON — New research shows that millions more people in Britain are struggling to make ends meet since the financial crisis and predicts that the situation could drastically worsen over the next few years as inflation spikes.

Research by the Joseph Rowntree Foundation released on Wednesday found that:

  • 30% of the population, 19 million people, are now below the “minimum income standard” [MIS].
  • The number below MIS has risen by 4 million since 2008/9, or a 5 percentage point rise;
  • 11 million people have incomes below 75% of MIS and are at high risk of poverty;
  • 8 million people are just about managing to get by.

MIS is an income benchmark calculated by the Centre for Research in Social Policy (CRSP) at Loughborough University. It is based on extensive surveys of people in the UK, asking them what they believe is a reasonable income.

MIS in 2016 for a single person of working age was £286.53 per week before bills, equivalent to £14,899 a year. For couples, it was £353.21 a week, or £18,366 a year. For a couple with two children, it was £776.28 a week, or £40,366 a year.

These are relatively modest budgets. The Institute for Fiscal Studies (IFS) found last year that the average income for a childless couple in the UK was £581 in 2014-15, or £30,212. That is over £10,000 more than they need under the MIS system.

The fact that so many people in the UK fall short of this relatively low threshold is alarming.

It also comes at a time when the UK is experiencing record low unemployment levels. New data released on Wednesday shows that Britain’s unemployment level remains at 4.8%, a 10-year low. Just 1.6 million people are officially unemployed.

Families with children have the highest risk of incomes that fall short of the standard, according to the report. More than half of families with children and just one parent in work are below the MIS — 56%.

The Joseph Rowntree Foundation, a social policy and development charity, says the rising risk of poverty is due to sluggish income growth rather than any increase in unemployment.

The charity says: “The price of a minimum “basket of goods” has risen 27-30% since 2008, and average earnings by only half that amount.”

Britain’s employment market has seen the rise of the so-called “gig economy” since the 2008 financial crisis, with more and more people doing low-paid, self-employed jobs such as driving Ubers or delivering food for Deliveroo. Trade union TUC estimated this week that the irregular hours and lower earnings of these types of workers means the government is missing out on £4 billion of tax revenue a year. This means these workers are missing out on pay too.

The Trussel Trust, a charity runs the UK’s only national network of food banks, said last April that food bank usage was at a record high of 1.1 million. Almost half a million emergency food supplies were given to children.

The Rowntree Foundation’s report is supported by Office for National Statistics data, which last year found that 33% of people were in poverty at least once between 2010-13 compared to an EU average of 25%.

read more: http://uk.businessinsider.com/theresa-mays-jams-joseph-rowntree-foundation-finds-4-million-people-just-above-poverty-line-2017-2

 

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Worst 5 years for living standards in 50 years

New analysis shows that the Tory-led, pro-austerity coalition has presided over the worst 5-year period for living standards in over half a century

The latest economic figures published today also show that far from experiencing a strong recovery the UK is now experiencing the slowest rate – just 0.3% – of quarterly growth since the end of 2012.

The TUC says 2010-2014 is unique in seeing a drop in real household disposable incomes, which combine wages, benefits, taxes and inflation.

It is the worst 5-year period for living standards for at least half a century (directly comparable records begin in 1960).

RHDI – a yardstick of living standards that takes account of incomes, benefits, taxes and inflation – was 0.6% lower in the half-decade ending in 2014 than in the 5 years ending in 2009, when it rose by 6.9%.

Austerity to blame

The TUC says this provides further evidence that the government’s austerity programme, which began in 2010, is more to blame for the loss of living standards than the financial crisis that preceded it. The government’s deep and rapid cuts killed off the recovery, causing growth to flat-line and wages to remain in decline for years longer than official forecasts.
read the rest of this article from the PCS here: http://www.pcs.org.uk/en/news_and_events/pcs_comment/pcs_comment.cfm/worst-5-years-for-living-standards-in-50-years

Treating UK tourists in Europe costs five times more than equivalent cost to NHS

Critics say figures obtained under Freedom of Information Act ‘puncture a big hole’ in claims that health tourism is costing Britain

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The cost of treating British people who become ill while travelling in Europe is five times higher than the cost of treating ill visitors from other European countries in the UK, official figures show.

The Department of Health data, obtained under the Freedom of Information Act, shows that it cost £30m in 2013-14 to meet the costs of European visitors using the National Health Service. This is less than one-fifth of the £155m cost to other states in the European single market for treating ill British tourists.

The figures for costs are for the medical treatment of European Economic Area tourists under the European health insurance card (Ehic) and cover visitors rather than residents or temporary migrants, but critics say they “puncture a big hole” in claims that health tourism is costing Britain dearly.

A £200-a-year health “surcharge” was introduced this week for all new migrants from outside the EEA who stay in the UK for longer than six months. The surcharge, which is £150 a year for overseas students, is payable upfront andcovers migrants for the duration of their visa.

Ministers have said the Department of Health is working on plans to charge those non-EU patients who are not subject to the health surcharge 150% of the cost of NHS treatment. EU migrants working in Britain pay for NHS treatment through their tax and national insurance contributions.

read the rest of this Guardian article here: http://www.theguardian.com/society/2015/apr/07/treating-uk-tourists-in-europe-costs-five-times-more-than-equivalent-cost-to-nhs?CMP=fb_gu

Self-employed – the nouveau pauvre

Flip Chart Fairy Tales

I take a break for a week or so and lots of people publish stuff about self-employment. Even the Bank of England’s Monetary Policy Committee were discussing it earlier this month, describing it as a “striking feature” of the UK’s labour market while holding a “range of views” as to the possible reasons for it. As Ben Chu noted, this is a polite way of saying that they disagree, which is not surprising given the ambiguous and sometimes contradictory data on self-employment.

Of course, this didn’t stop the government putting its own spin on the MPC’s comments. Ian Duncan-Smith claimed that welfare reforms were reviving Britain’s entrepreneurial spirit, citing the Bank of England in support, even though there was no reference to entrepreneurialism anywhere in its report.

What the MPC did say, however, was that benefit reforms might have been one of the factors leading to higher rates of self-employment…

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