JRF: You can’t rely on a single policy to combat poverty

The net weekly budget for a family of four, with children aged 3 and 7, has risen from £370 to £455 since 2008.

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Chris Goulden is the programme manager for poverty at the Joseph Rowntree Foundation (JRF)

Research (pdf) published today by the Joseph Rowntree Foundation shows what the public think we all need for an acceptable minimum standard of living. It is based on panels of ordinary people reaching a consensus about the items and activities that allow participation in society as well as food, clothes, paying the bills and a home.

Family-shoppingThis year is the first time that families with children have been asked again from scratch what they think constitutes their minimum and it means we can compare what they’ve said with the original research done pre-recession in 2008.

The net weekly budget for a family of four, with children aged 3 and 7, has risen from £370 to £455 during this time.

That’s an increase of 23 per cent compared with CPI over the same period of 14 per cent. It’s not just the greater inflation of a minimum basket of goods that’s causing this, however.

Some things in particular are hitting working families the hardest . This is why we are seeing an even larger rise in the gross wages that families need to earn – rising by a third from £28,000 a year in 2008 to £37,000 today.

Childcare: has risen by nearly a third. In 2008, child minders outside London charged on average £2.70 an hour; now they charge £3.50. Full-time childcare are families’ single biggest weekly outgoing at nearly £150 per week.

Transport: bus travel has doubled in price since the late 1990s which, combined with cuts to public transport, means families with children now deem a (second-hand) car as essential.

Tax credits: cuts to Tax Credits – particular Childcare Tax Credits – have increased earning requirements substantially, more than wiping out the benefit of higher income tax thresholds.

Chart 1 below shows the ‘swings and roundabouts’ that lead to an overall rise of £5,000 (inflation-adjusted) in the minimum budget for a family of four. This highlights the importance of looking at incomes, costs and tax/benefit changes in the round.

Chart 1:

JRF-swings-and-roundabouts-chart

 


See also:

Two children in every classroom go hungry 5 Jul 2012

Government has “no hope” of reaching its target on reducing child poverty 13 Jun 2012

UK success on child poverty threatened by austerity programme 29 May 2012


 

You can’t just rely on a single policy (increases in tax credits or the income tax threshold for instance) to be effective against the problems of low income.

We would like to see governments using this more comprehensive analysis to show that changes in policy really do lead to improvements on the ground. It’ll be particularly important when Universal Credit comes in next year to maintain this level of scrutiny of its impact.

 


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42 Responses to “JRF: You can’t rely on a single policy to combat poverty”

  1. Lee Gregory

    You can’t rely on a single policy to combat poverty, writes @jrf_uk’s @Chris_Goulden: http://t.co/Ulr5KfeR

  2. Emma Stone

    Blog on #MIS2012 by @Chris_Goulden for @leftfootfwd here. Can't rely on a single policy to combat poverty. http://t.co/yelePuhU #ukpoverty

  3. LFRMillan

    You can’t rely on a single policy to combat poverty, writes @jrf_uk’s @Chris_Goulden: http://t.co/Ulr5KfeR

  4. Abigail Scott Paul

    Blog on #MIS2012 by @Chris_Goulden for @leftfootfwd here. Can't rely on a single policy to combat poverty. http://t.co/yelePuhU #ukpoverty

  5. grahame whitfield

    You can’t rely on a single policy to combat poverty, writes @jrf_uk’s @Chris_Goulden: http://t.co/Ulr5KfeR

  6. David Sinclair

    Blog on #MIS2012 by @Chris_Goulden for @leftfootfwd here. Can't rely on a single policy to combat poverty. http://t.co/yelePuhU #ukpoverty

  7. Danny Wright

    RT @leftfootfwd: You can’t rely on a single policy to combat poverty http://t.co/sjIMKwXM < @Chris_Goulden on #MIS2012 and #welfarereform

  8. BevR

    RT @leftfootfwd: JRF: You can’t rely on a single policy to combat poverty http://t.co/b2mGWm3w

  9. Foxy52

    RT @leftfootfwd: JRF: You can’t rely on a single policy to combat poverty http://t.co/b2mGWm3w

  10. Anonymous

    “You can’t just rely on a single policy (increases in tax credits or the income tax threshold for instance) to be effective against the problems of low income.”

    How about reducing the duty on fuel? It’s hard to think of anything that hits poor people more savagely and disproportionately than artificially increasing the cost of heating your home or driving a car.

    The Government has the power to cut the cost of petrol by about two thirds with immediate effect. Doing so would make almost everything cheaper. It would create more jobs and enable even many poor households to drive to Scotland or Cornwall or even the south of France for a camping holiday.

  11. Anonymous

    Of course you can – the Tories are. It’s called “Denial”.
    The *results* may vary.

  12. Anonymous

    You can’t? I can think of three offhand – public transport, rent and food.

    Of course the Government can give another massive tax break to the middle class, which would do little to nothing for the urban poor. Create jobs? Sure, absolutely, in the Middle East. Meanwhile, the poverty premium would soar as billions of cuts were imposed on the poor to make up for the *massive* loss in tax revenue.

    Holidays? Don’t make me laugh, the poor have food and rent to worry about.

  13. Danny Wright

    You can’t rely on a single policy to combat #ukpoverty, @chris_goulden writes on @leftfootfwd: http://t.co/sjIMKwXM #mis2012

  14. Joseph Rowntree Fdn.

    You can’t rely on a single policy to combat poverty, @chris_goulden writes on @leftfootfwd: http://t.co/yZ5FsaIO #mis2012

  15. KAAL Group

    You can’t rely on a single policy to combat poverty, @chris_goulden writes on @leftfootfwd: http://t.co/yZ5FsaIO #mis2012

  16. Body Politic Radio

    You can’t rely on a single policy to combat poverty, @chris_goulden writes on @leftfootfwd: http://t.co/yZ5FsaIO #mis2012

  17. Nancy Kelley

    You can’t rely on a single policy to combat poverty, @chris_goulden writes on @leftfootfwd: http://t.co/yZ5FsaIO #mis2012

  18. Claire Pullar

    You can’t rely on a single policy to combat poverty, @chris_goulden writes on @leftfootfwd: http://t.co/yZ5FsaIO #mis2012

  19. Antonia Bance

    You can’t rely on a single policy to combat poverty, @chris_goulden writes on @leftfootfwd: http://t.co/yZ5FsaIO #mis2012

  20. Chris Goulden (JRF)

    You can’t rely on a single policy to combat poverty, @chris_goulden writes on @leftfootfwd: http://t.co/yZ5FsaIO #mis2012

  21. Paul Gibson

    You can’t rely on a single policy to combat poverty, @chris_goulden writes on @leftfootfwd: http://t.co/yZ5FsaIO #mis2012

  22. Tyrrell Golding

    You can’t rely on a single policy to combat poverty, @chris_goulden writes on @leftfootfwd: http://t.co/yZ5FsaIO #mis2012

  23. Zahra Alijah

    You can’t rely on a single policy to combat poverty, @chris_goulden writes on @leftfootfwd: http://t.co/yZ5FsaIO #mis2012

  24. Martin Steel

    You can’t rely on a single policy to combat poverty, @chris_goulden writes on @leftfootfwd: http://t.co/yZ5FsaIO #mis2012

  25. Louise Woodruff

    You can’t rely on a single policy to combat poverty, @chris_goulden writes on @leftfootfwd: http://t.co/yZ5FsaIO #mis2012

  26. Dimitrina Kaneva

    You can’t rely on a single policy to combat poverty, @chris_goulden writes on @leftfootfwd: http://t.co/yZ5FsaIO #mis2012

  27. BevR

    RT @leftfootfwd: JRF: You can’t rely on a single policy to combat poverty http://t.co/b2mGWm3w

  28. Mahmoona Shah

    You can’t rely on a single policy to combat poverty, @chris_goulden writes on @leftfootfwd: http://t.co/yZ5FsaIO #mis2012

  29. Liz Sewell

    You can’t rely on a single policy to combat poverty, @chris_goulden writes on @leftfootfwd: http://t.co/yZ5FsaIO #mis2012

  30. Anupama Ranawana

    RT @leftfootfwd: JRF: You can’t rely on a single policy to combat #poverty http://t.co/kYJiXRTY

  31. Standing Together

    You can’t rely on a single policy to combat poverty, @chris_goulden writes on @leftfootfwd: http://t.co/yZ5FsaIO #mis2012

  32. JC

    How about changing Income Tax and NI so that the poor don’t pay it? It would be easy to determine that the tax free allowance would be the NMW at 40 hours per week and also not charge NI below that rate. You might even chose to set the Employers NI at above that rate too.

    At least those hard working squeezed whatevers would be better off.

  33. Kathleen Kelly

    You can’t rely on a single policy to combat poverty writes @chris_goulden on @leftfootfwd: http://t.co/hJMwgr1y #mis2012

  34. Kim McKee

    You can’t rely on a single policy to combat poverty writes @chris_goulden on @leftfootfwd: http://t.co/hJMwgr1y #mis2012

  35. Anonymous

    For one, allowing the government free run to call people scroungers and attack them is a bad idea.

    For two, the massive tax gap would be closed, by this government, off their backs anyway per previous policy. So at best they’d be no better off. Slashing employer’s NI? Oh my, MASSIVE cuts – and you just encouraged minimum-wage jobs.

  36. Eva Lloyd

    You can’t rely on a single policy to combat poverty, @chris_goulden writes on @leftfootfwd: http://t.co/yZ5FsaIO #mis2012

  37. JC

    Why would you want to call me a scrounger and make attacks on the hard working poor just because the tax free allowance was above the amount I was paid? I don’t think taxing the poor is a particularly good idea at any time, especially now.

    The government should be running an economy within the reach of fair taxation policies, and should be trying to optimise the amount of tax collected instead of targeting various groups for political gain.

    As for having a tax on jobs; I just don’t believe that it’s a good idea. There’s no evidence that employers take advantage of your last point anyway. There’s nothing stopping them doing it now.

    If my proposals were adopted, then the minimum wage would become the living wage.

  38. Anonymous

    I wouldn’t, but I’m not a Tory now am I?

    And the thresholds don’t make it very sensible to do it now, but you’d make it near-irriststable. It’s also not a “tax on jobs”, it’s part of the standard cost of employment and it’s actually not especially high. Again, the sort of tax cuts you’re talking about would be taken out, by this government, of poor people’s services causing an even higher poverty premium, and if you think wages would rise I have some buckets of wet sand to sell you.

  39. News4NowHere

    You can’t rely on a single policy to combat poverty, @chris_goulden writes on @leftfootfwd: http://t.co/yZ5FsaIO #mis2012

  40. JC

    What’s the difference between a cost of employment which goes to the government and a tax on jobs? Especially when the latter is a percentage of the pay.

    As for the reduction in government spending, if the poor had more money, then the government wouldn’t need to give them so much to catch up would they?

    Evidence shows that a lower tax on employment leads to larger profits and thus higher wages. Unless you decide to increase the tax on company profits that is.

  41. Anonymous

    Zero, of course, to the treasury, but companies are not thick. They won’t increase wages simply because their employers NI contributions have been slashed.

    Higher profits | Higher wages. This was a link which only held true until the 1970’s. Now, it simply goes into more capital.

  42. Look Left – Lords reform, the last PMQs before recess and the return of "the king" | Left Foot Forward

    […] UK in 2012: Keeping up in Hard Times” report (pdf) by the Joseph Rowntree Foundation (JRF), which shows what the public think we all need for an acceptable minimum standard of […]

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