Businesses paying employees poverty wages are costing taxpayers eleven times the amount benefit fraud cost last year

Taxpayers spend £11bn to top up low wages paid by UK companies

Research published last week by Citizens UK found that companies in the UK are paying their workers so little that the taxpayer has to top up wages to the tune of £11bn a year. The four big supermarkets (Tesco, Asda, Sainsburys and Morrisons) alone are costing just under £1bn a year in tax credits and extra benefits payments.

This is a direct transfer from the rest of society to some of the largest businesses in the country. To put the figure in perspective, the total cost of benefit fraud last year was just £1bn. Corporate scrounging costs 11 times that.

Worse, this is a direct subsidy for poverty pay. If supermarkets and other low-paying employers know they can secure work even at derisory wages, since pay will be topped up by the state, they have no incentive to offer higher wages.

None of this makes sense. We are all, in effect, paying a huge sum of money so that we can continue to underpay the 22% of workers who are earning below the Living Wage – the level at which it is possible to live without government subsidies. The only possible beneficiaries are business owners.

Read the rest of this Guardian article here:

There is great poverty in this country, but there are also great riches

Wages for most people have fallen over the past five years, meaning that work is no longer a guaranteed route out of poverty.
 Here’s the latest infographic from
More than half of the UK households in poverty contain someone in work. But many at the top have not had to economise. The number of UK billionaires has grown rapidly, as has pay for top company bosses.
There is great poverty in this country, but there are also great riches.


Food bank inquiries soar as further working class families slide into poverty

Millions find it harder to put food on the table as low wages, welfare cuts and high cost of living take their toll

An “alarming” 78% rise in food bank inquiries has taken place over the last six months, as people with jobs start using them to provide emergency supplies until their next pay day.

The figures from Citizens Advice will raise serious concerns that more people are sliding towards the poverty line and are finding it difficult to feed themselves. They reveal significant regional disparities in demand for information about food bank services in England and Wales, suggesting certain parts of the country are suffering considerably more than others.

The charity said the worst affected area was the West Midlands, where there had been a 142% increase in inquiries – 779 in total – since February. The figures show a rise in inquiries about food banks in Citizens Advice bureaux in almost every region of the country.

Gillian Guy, chief executive of the charity said: “Food banks have no place in modern Britain. Millions of families are facing a perfect storm of pressures on their budgets. The combined impact of welfare upheaval, cuts to public spending, low wages and the high cost of living are putting unbearable pressure on many households, forcing them to seek emergency help putting food on the table.”

Guy said that the rise in food bank inquiries in the past six months showed that, despite falling unemployment, millions were still experiencing financial difficulties.

There are concerns that people have ransacked their savings to tide themselves over and are now running out of financial options. A YouGov survey, commissioned by Citizens Advice, revealed that more than half of those on low incomes have raided their savings accounts in the last six months to meet basic living costs.

More than a third – 37% – of respondents on low incomes said they had no savings to turn to in an emergency.

Now, for the first time, the charity has warned that its bureaux are beginning to see people in employment seeking emergency food supplies. Even affluent parts of the country have experienced greater demand for food banks.

B y Jamie Doward and Hussein Kesvani in the Observer, 16th August 2013. Read the full article here:

UK wages decline among worst in Europe

Wages in the UK have seen one of the largest falls in the European Union during the economic downturn, according to official figures.


The figures, which were requested by the Labour Party and collated by the House of Commons library, show average hourly wages have fallen 5.5% since mid-2010, adjusted for inflation. That is the fourth-worst decline among the 27 EU nations . By contrast, German hourly wages rose by 2.7% over the same period.


Across the European Union as a whole, average wages fell 0.7%. Only Greek, Portuguese and Dutch workers have had a steeper decline in hourly wages, the figures showed.Other countries that have suffered during the eurozone debt crisis also fared better than the UK. Spain had a 3.3% drop over the same period and salaries in Cyprus fell by 3%. French workers saw a 0.4% increase, while the 18 countries in the eurozone saw a 0.1% drop during that period.

“These figures show the full scale of David Cameron’s cost of living crisis,” said shadow Treasury minister Cathy Jamieson.



These figures, requested by the Labour Party and collated by the apolitical House of Commons library, merely put into firm numbers what we’ve all sensed for three years or more.

The money left over at the end of each month is getting less and less because our salaries have been flatlining while shopping, petrol and energy bills have been rising steadily.

Politically, this is fertile ground. Ed Miliband talks of a squeezed middle and feeling poorer while the government talks of a nascent recovery that will eventually raise living standards across the board while putting pressure on benefit dependants.

Clamping down on inflation, which has been above its 2% target for four years, doesn’t appear to be a priority for the new regime at the Bank of England.

Mark Carney et al say they will tolerate it above target until unemployment falls below 7%. The tolerance of voters might be tested in the interim as their spending power continues to erode.


from the BBC website 11th August 2013. Read the full article here

Low on credit

THOUSANDS of families will LOSE cash by working more under reforms, a report claims today.

It warns many people will only take home a few extra quid a week — even if they double or treble their hours. And some will actually end up being WORSE OFF if they work 30 or more hours a week.

The Joseph Rowntree Foundation’s analysis is a hammer blow to the Government’s claim that Universal Credit will encourage people to work longer hours.

Report author Donald Hirsch claimed 900,000 working families will lose out under the system — while 600,000 will be better off.

Among the losers are lone parents with two kids, who would receive £219 a week if they were out of work and on benefits. Under Universal Credit, if they got a minimum wage job their income would jump to £267 if they worked 10 hours a week. But working 29 hours a week they’d earn £275 — just £8 more.

The income from an extra 19 hours would be almost entirely lost to childcare costs and universal payment cuts — meaning they would lose 13p an hour for every hour worked over the 29.

Mr Hirsch said: “Universal Credit strengthens the incentive to do a bit of work but rewards for additional hours can be tiny.”

Work and Pensions Secretary Iain Duncan Smith has unveiled plans to extend Universal Credit to six new areas in October.

A spokesman last night said: “Universal Credit will give very clear incentives to work more.”

by Graeme Wilson in “The Sun”, 11th July 2013