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Just Managing?

 | 
Mark O'Brien
, 
Paul Kyprianou

Part I: Back to the future?

1. Understanding Poverty: Then and Now

Full text

Different world; same problems

1On the eve of the outbreak of World War I, a ground-breaking study of working poverty in Lambeth was conducted by researchers connected with the Fabian Women’s Group. Published as Round About a Pound a Week (1913),1 the report closely followed the lives and weekly expenditure of families who, though not the most poor, with the man of the household in work, nonetheless struggled to survive on a weekly budget of something close to 20 shillings. The report retains its interest for us today, not just for its historical importance as an example of research that influenced social policy in its era, but one that provides us with a picture of working-class life that still resonates today.

2A crucial theme running through that report was a debunking of many of the presumptions and strictures that emanated from middle class moralists and establishment reformers. In their view, the working class were ‘unthrifty’ in their expenditure and ‘improvident’ in their procreation. They asked: why could the men not cut down on their drink? Why did these families not rent cheaper basements to afford an extra room and reduce overcrowding? Why could they not buy coal and food in bulk to get better rates? Why did they have so many children?

3In fact, the men did not drink; rather they were mainly sober working men who gave the major portion if not all of their wages to their wives, who managed the household budget. Basement rooms tended to be gloomy and damp which meant more having to be spent on coal and gas. Moreover, better if possible to have one room that was well ventilated and sunny though more expensive, than two cheaper rooms that were below ground level with stagnant air and the risk of bronchial diseases that came with it. Coal could not be bought in bulk if there was nowhere to store it. The reason for the monotonous daily food shop was that many of the men were paid daily. It was also the case that these families’ houses and rooms did not afford pantries for storing food, and with vermin a constant problem it was impossible to keep food for any length of time without it attracting mice and rats. These families were large because of a combination of early marriage to be able to leave the parental home and the need to establish a household, the effective unavailability of contraception and the uncertain survival of any single child.

  • 2 Ibid., p. 57.
  • 3 Ibid.

4There was also the matter of porridge. Some ladies of the Fabian Women’s Committee, firmly of the view that porridge would make a fine breakfast for a working man, set about proselytising its virtues to the working-class women they attracted to meetings on the subject. Bags of porridge were left at their houses; the reformers returning the following week, enthusiastic to see the results of ‘their work’. To their great consternation the bags were found untouched. Porridge was slow to make and the pan could not be left to boil whilst other tasks were attended to. Porridge left too long would burn and ruin one of the two pans, or even the only pan in the house. Finally, porridge without milk and sugar was revolting to the children and men alike. One women described her children’s’ reaction: “they ‘eaved at it”.2 Another gave her husband’s response: “Ef you gives me that stinkin’ mess, I’ll throw it at yer”.3

5The condescension of the moral crusaders of the day notwithstanding, it was simply not the case that the difficulties of these working families’ lives were self-created, the result of poor household management or lack of intelligence. Rather they were the result of brute circumstance and the material limitations they had to negotiate daily. As Maud Pember Reeves, commenting upon the question of diet, put it in the report:

  • 4 Ibid., p. 145.

That the diet of the poorer London children is insufficient, unscientific, and utterly unsatisfactory is horribly true. But that the real cause of this state of things is the ignorance and indifference of their mothers is untrue. What person or body of people, however educated and expert, could maintain a working man in physical efficiency and rear healthy children on the amount of money which is all these same mothers have to deal with? It would be an impossible problem if set to trained and expert people. How much more an impossible problem when set to the saddened, weakened, overburdened wives of London labourers? 4

6Of course, it is true that much has changed even for the poorest in society. Housing conditions are better, and the extremes of overcrowding that were common in the early part of the twentieth century are gone. Levels of infant mortality have improved radically from the dreadful levels of more than a century ago. Nutrition is better. Sanitation is better. Access to healthcare is better. Education and provision for children is better. There are welfare state benefits. Indeed, many of these social improvements are attributable in part to the efforts of the socialists and reformers who worked on the 1913 Lambeth study and others like it.

7However, a horrible truth emerges from a comparison with the circumstances and social experience of the working poor then and today: in fact, there is much that remains the same. As we show here, the sense of balancing always ‘at the edge’, the constant high levels of worry and stress, the strains on family life, the struggle for decency despite the exhaustions of the weekly grind all attest to a working-class experience that is recognisable from a previous age. It is not that these things are simple continuations of what went before. They are shaped and affected by modern pressures and influences: these problems of life belong to their own time and place. However, if these different generations could meet they would have much in common to compare: the experience of debt; economic insecurity; ill health; arbitrary treatment by employers; the extensions of hours of work to impossible extremes; very long journeys for work; the struggle to make time for their children; and so on. The pernicious effects of poverty are all too evident as stubborn and shameful features of our otherwise prosperous society.

  • 5 Wilkinson, R. and Pickett, K. (2009), The Spirit Level: Why More Equal Societies Always Do Better. (...)

8It is an old observation, though no less true for that, that ‘poverty’ is a relative term, measured by the prevailing norms and expectations of the society in which it exists. Its impact then, its psychological meaning, its consequences for feelings about life and behaviour and even its physical effects upon health and what today we call ‘well-being’, cannot be wholly captured by absolute measures. These are important of course. Longevity, morbidity rates and the incidences of infant death within the first year are all related to poverty levels. Beyond matters of basic survival however, it is often the comparison with others that matters most today, particularly in the affluent countries. The work of Richard Wilkinson and Kate Pickett (2009), for example, reported in their bestselling book The Spirit Level5 established with statistical authority that it is the inequalities within a society that properly explain its social outcomes, and not the simple levels of overall wealth.

  • 6 Lansley, S. and Mack, J. (2013), ‘A More Unequal Country?’, Poverty and Social Exclusion Newslette (...)
  • 7 Dorling, D. (2015), Injustice. Why Social Inequality Still Persists. Policy Press, p. 388.
  • 8 Equality Trust (2017), ‘The Scale of Economic Inequality in the UK’, https://equalitytrust.org.uk/ (...)

9In the UK, as in much of the industrialised world, a ‘great reversal’ of wealth occurred between the mid-1970s and the end of the 1990s. The trend today continues, driven by ever more inequitable tax regimes and downward pressures on pay, taking the levels of inequality to ever greater extremes. This shift has, with occasional pauses, accelerated over the decades up to the present times. Between 1979 and 2010, the wealthiest ten percent of British society saw their share of the national pie increase from 21 percent to 31 percent. More egregious still has been the concentration of wealth at the richest pinnacle of the social pyramid. In 1978 the wealthiest one percent of British society between them commanded six percent of the national share. By 2010 this had reached nearly fourteen percent.6 Just four years later, the wealth of the 1,000 richest people in the UK had risen by 55 percent. This meant that their combined wealth stood at £519 billion, a figure that could have provided every British family with an extra £6,000 in their income.7 In 2017, pre-tax income for the most affluent ten percent was 24 times higher than that of the least affluent ten percent. The richest fifth of the UK population had more than 40 percent of total national wealth, compared to the poorest fifth who had just eight percent.8

Income distribution in the UK. Office for National Statistics.9

  • 10 Dorling, D. (2015).
  • 11 Jones, O. (2016), Chavs. The Demonization of the Working Class. Verso
  • 12 Lansley, S. and Mack, J. (2015), Breadline Britain. The Rise of Mass Poverty. p. 65.

10A self-justifying political and media narrative has accompanied this radical alteration of wealth distribution in favour of the already rich. Danny Dorling in his Injustice: Why Social Inequality Still Persists (2015)10, with a nod to Beveridge’s ‘five giants’ that had to be slain by the post-War Labour government, lists five myths that have constituted this ideological veneer. These he identifies as: ‘elitism is efficient’; ‘exclusion is necessary’; ‘prejudice is natural’; ‘greed is good’; and ‘despair is inevitable’. These myths, however, have proliferated not only in the offices of ministerial speech writers and tabloid editors. They have seeped into the processes and methodologies of government policy making, so that the conceptualisations that underpin them become a material reality in the lives of the poor — and (of course, very differently) of the rich. Another aspect to this narrative has been the media construction (once again) of the poor as indolent, feckless and prone to petty criminality; a phenomenon that Owen Jones (2016) has described as the ‘demonization of the working class’.11 This media game, however, is connected to real legislative processes. One example of this has been the re-framing of poverty in UK government policy as being no longer a result of low income levels, but rather of behaviour and even ‘lifestyle choices’. Within the ‘Troubled Families’ programme, for example, launched in 2011, the factors of income and living standards were downgraded in importance to give way to such things as parenting skills, parental health, drug and alcohol dependency and family stability.12

11Considering the life effects for the worst off in society, the growing gap between the rich and the poor has resulted in deteriorations on all life and well-being measures: physical health; frequencies of mental illness; life expectancy; malnutrition; etc. The Spirit Level showed this to be a global phenomenon. Along with these types of measure, the authors also considered personal and social outcomes such as educational performance, teenage birth rates, violence within communities, incarceration rates and social mobility across the industrialised nations. On each of these indicators and others, negative outcomes correlated closely with inequality within those nations. The study showed that:

  • 13 Wilkinson, R. and Pickett, K., p. 173.

[…] among the rich developed countries and among the fifty states of the United States, […] most of the important health and social problems of the rich world are more common in more unequal societies. In both settings the relationships are too strong to be dismissed as chance findings. The importance of these relationships can scarcely be overestimated. First, the differences between more and less equal societies are large—problems are anything from three times to ten times as common in the more unequal societies. Second, these differences are not differences between high-and low-risk groups within populations which might apply to only a small proportion of the population, or just to the poor. Rather, they are differences between the prevalence of different problems which apply to whole populations.13

The question of pay

12The social consequences of the inequality we see today are terrible not just for their impact upon individuals and families, but for the quality of social relationships at a larger scale. Regardless of the effects upon the ‘social fabric’, these trends have been driven deliberately and relentlessly by government policy over a period of more than four decades. Crucial to the descent into ever deeper levels of poverty for the worst off, along with the erosion of the welfare services and protective state benefits, has been the downward pressure on relative wage levels for the working poor. A counter-argument to this assessment is that government legislation has been in place to address the problem of poverty pay for two decades. And yet the reality of worsening income inequality continues. There is something here to be explained.

13The National Minimum Wage Act (1998) established for the first time a basic level of pay for all workers regardless of industrial sector. It had been preceded by historical legislation that had provided wage regulation for specific occupations. As far back as 1891 there had been the Fair Wages Resolution Act. This was followed in 1909 by the Trade Boards Act which set basic localised wage levels for the most exploitative industries. In 1912, miners had struck for the minimum wage; the result later that year was the Coal Mines (Minimum Wage) Act. In the years immediately following the Second World War the Wage Council system that had emerged from the Trade Boards further improved wage regulation. By the early 1950s the wages of 3.5 million workers were protected by its provisions. This redistributive policy regime, combined with the wage militancy of the 1960s, drove the favourable shift of the relative working-class portion of national wealth that had occurred by the mid-1970s. It is this period that provides the most meaningful baseline by which to assess the effectiveness of more recent minimum wage policy.

14Throughout the 1980s, Wage Councils were eroded in effectiveness and in number. In 1993 the John Major Conservative Government abolished the last of the Wage Councils, thus giving employers a much freer hand in setting remuneration levels. Over this period, as we have seen, the redistributive tide was reversed, as the wealth gap grew wider by the year. Since 1998, the minimum wage, though increased annually, has come nowhere near narrowing the wealth gap to the extent that was seen in the post-war years. Even by the more modest standards of the recent era of government social policy, it has fallen far short of the levels needed to prevent worsening inequality and increasing neediness amongst those on the lowest incomes.

  • 14 Low Pay Commission (2014), The Future Path of the National Minimum Wage, https://www.gov.uk/govern (...)
  • 15 D’Arcy, C. and Kelly, G. (2015), Analysing the National Living Wage Impact and Implications for Br (...)
  • 16 Toynbee, P. (2003), Hard Work. Life in Low Pay Britain. Bloomsbury, p. 178.

15The National Minimum Wage was hailed as a great achievement of the 1997–2010 Labour Government. Overseen by the Low Pay Commission it has held its position against average earnings across the UK. What it has not done however, has been to retain its value against inflation, and this is what matters to working families. Whether measured against the Retail Prices Index (RPI: that includes housing costs) or against the Consumer Prices Index (CPI: which does not) the reality is that its relative value, considered as a ‘real consumer wage’, has deteriorated for most of the years of its existence.14 So, in the four years up to October 2013 the real consumption value of the National Minimum Wage had fallen by 45 pence an hour. The Resolution Foundation has calculated that it is worth £1,010 less a year than in 2008.15 Considering the problem in the longer term, minimum wage policy in the UK has failed to protect the low paid against a continuous downward slide in the value of their income since it came into effect in April 1999. Indeed, even a very low paid worker in 1970 was likely to be earning more in real terms, than a worker on the National Minimum Wage in the years following its introduction.16

16In his 2014 budget the then Chancellor of the Exchequer George Osborne raised the adult National Minimum Wage to £7.20 an hour. This was heralded as a new National Living Wage (NLW), even though it was in fact lower than the UK Living Wage and the London Living Wage established for that year by the Living Wage Foundation as £7.85 and £9.15 respectively. It also left behind over two million workers who were under the age of 25 and therefore ineligible for the new rate. By April 2017, the full adult rate had been increased to £7.50 an hour, the age 21–24 rate to £7.05 per hour and the age 18–20 rate to £5.60 per hour. These figures, however, were amongst the lowest minimum wage levels in Europe. Moreover, they remained set far below the Living Wage that would ensure a decent standard of living for all working households. At 2017 prices, the all-UK Living Wage hourly rate would need to have been £8.45 for this to be guaranteed.

  • 17 Save the Children (2012), Ending Child Poverty: Ensuring Universal Supports Working Mums. How Will (...)

17Of greater significance is the fact that since 2010, with the election of the Conservative-Liberal Democrat Coalition Government and the 2015 Conservative Government that succeeded it, the failure of the National Minimum Wage to narrow the wealth gap in the UK has been compounded by the largest programme of abolition and reduction of state benefits ever seen in the UK. Changes to the benefits system have impacted enormously on the low paid. The measures introduced by the 2012 Welfare Reform Act, for example, replaced a range of important benefits and tax credits such as Working Families Tax Credit and Child Tax Credit. Shortly after it was announced, Save the Children estimated that a single parent with two children on an income at or near to the National Minimum Wage would be around £2,500 a year worse off as a result of being moved onto Universal Credit, pushing the families of up to 250,000 children into poverty.17 With each successive adjustment to the Universal Credit since 2013 its real-terms value has fallen.

  • 18 Daly, M. and Kelly, G. (2015), Families and Poverty: Every Day Life on a Low Income. Policy Press, (...)
  • 19 O’Hara, M. (2014), Austerity Bites: A Journey into the Sharp End of Cuts in the UK Policy Press, p (...)

18Moreover, the Universal Credit is calculated annually whereas income for the low paid can vary from month to month, leading to the problem of overpayments and consequent clawbacks (a major reason for resort to pay-day loans). This poses problems particularly for those who are self-employed and whose income, whilst low, also varies monthly. Daly and Kelly (2015) describe the sensitivity of what they term the ‘money rhythm’ for the poor as they carefully balance their income against expenses and loan repayments from one month to the next. Shifts in the benefits regime will also disrupt these carefully calculated balances established over time for many of those in such straitened circumstances.18 New types of conditionality for in-work eligibility, trialled in Liverpool in 2016, will also punish those deemed to be taking insufficient steps towards obtaining work. Further harmful effects result from the pressure that the Universal Credit, with its new battery of sanctions, creates upon people to move into the ‘poverty-trap’ of part-time work.19

19On top of these changes have come successive waves of welfare reform, each of which has introduced further caps, cuts and freezes to benefits. The introduction of the Personal Independence Payment to replace the Disability Living Allowance (DLA) for instance, was designed to save the Treasury £2.2 billion. The Welfare Reform and Work Act (2016) introduced £12 billion of cuts to welfare spending. It also repealed much of the Child Poverty Act (2010) that had set targets for eradicating child poverty. By April 2017, these further changes to the welfare system were being implemented. They included: a freeze in working age benefits and housing allowances for all four successive fiscal years; the setting of the Local Housing Allowance (the term used for Housing Benefit given to tenants in the privately rented sector) at a rate based upon the cheapest 30 percent of properties, rather than the cheapest 50 percent used previously; major reductions in the amount that can be earned before Universal Credit is tapered away entirely; a freezing of the level for Child Benefit; a lowering of the cap on total benefit levels for households; a reduction in the earnings entitlement for tax credits from £5,000 to £2,500; the ending of the family element in both Universal Credit and tax credits; a reduction of the Universal Credit Work Allowance to £397 per month for those not receiving housing costs, £192 per month for those receiving housing costs and removed entirely for non-disabled people without children; and the end of Child Tax Credit after the second child.

  • 20 Ghelani, D. and Tonutti, G. (2017), The Impact of the Two-child Limit to Tax Credits. Policy in Pr (...)

20Specifically, the loss of the child element of Universal Credit for families with more than two children would affect 256,000 children of ‘households in poverty’, 266,000 children of households ‘at risk of poverty’ and 609,000 children of households that were ‘just about managing’ by 2020. Low income families with a third or additional child would have to make up a difference of £1,737 a year between their needs and their benefit entitlements. As a result of this single policy, 266,000 children were set to join the 2.3 million already living in households in relative poverty: a 10 percent increase over the parliamentary term.20 So, whilst the British Prime Minister Theresa May shuttled back and forth between Westminster and Brussels negotiating Britain’s exit from the European Union, notwithstanding her stated intention to ‘reach out’ to struggling families, her government was implementing reforms that would once more impact savagely upon the poorest in society.

21Minimum wage policy, then, should not be seen in simplistic terms as an automatic ‘good’ for those on low pay. It must be balanced against other aspects of state regulation of a low-pay economy. Everything also depends of course, upon the level at which it is set. When set high, representing a meaningful uplift for the poorest, it is of course a gain for working people. However, when set low, and raised at rates lower than consumer prices increases, whilst employers push up the prices of their products and services, it is no longer an instrument of redistributive social policy for most workers. This is an old complaint and was raised at the end of the eighteenth century against the Speenhamland System that set agricultural wages on terms favourable to landowners rather than farm-labourers. So today, the socio-economic meaning of the National Minimum Wage cannot be read in econometric tables, but must be considered in terms of the lived experience of working people.

The forgotten matter of fairness

22Whilst the gap between rich and poor has widened since the 1970s, the processes driving it have accelerated over recent years. This has been the result of many factors. A major cause however, has been a wholesale assault upon welfare spending since 2010. In the 2010 Comprehensive Spending Review the Coalition Government announced budgetary reductions of £81 billion by 2014–2015, with £11 billion coming through welfare cuts and £3.3 billion as public-sector pay freezes.

23At the local level, the Communities and Local Government settlement was set at a 33 percent reduction of then current spending, with a 42 percent reduction in administration costs, whilst resource ‘savings’ of 28 percent were set for the Local Government settlement. Capital funding for all departmental support to councils was set to fall by 45 percent over the spending review period. Overall, Central Government funding to councils was reduced by 26 percent. In 2013, the government introduced a further 10 percent reduction in funding for councils. In 2015, £33 billion of cuts in public spending were announced by the new Conservative Government over the five years of its administration.

24In 2010, much was made of a new element in the calculations that underpinned that year’s budget. This was the Distributional Impact Assessment (DIA) that accompanied it. The Coalition Government made an explicit commitment under the DIA that although the budgetary reductions in public spending over the five-year term of the spending review would be ‘painful for all’, they would at least be fair. By ‘fair’, the DIA was clear that this meant any overall reductions in income would be proportionate to existing income levels: in other words those at the top of the income gradient would lose proportionately more than those at the lower end of the income gradient.

  • 21 ‘Equivalisation’ adjusts income estimates from purely monetary units into realistic effective inco (...)
  • 22 HMS Treasury (2014), Impact on Households: Distributional Analysis to Accompany Budget 2014, http: (...)

25In its five-year estimated projections, the DIA predicted a continuous downward distribution of income loss from decile 10 (the ten percent highest income group) to decile 2 (the second lowest ten percent income group) in the proportionate equivalised21 income loss resulting from budgetary reform.22 For decile 1 (the lowest ten percent income group) a reassuring note accompanied the chart explaining that the disproportionately high rate of income loss for this group was apparent only, since turnover within it would be high as people left the benefits system and became employed. The DIA made an even more straightforward commitment on the question of ‘benefits-in-kind’ covering group benefits arising from government spending on health, social housing, travel subsidies, schools and school-based services, free school meals, Local Authority spending etc. Here the impact upon household consumption would be distributed fairly by quintile group with the poorest households losing the least in percentage terms.

  • 23 Reed, H. and Portes, J. (2014), Cumulative Impact Assessment. A Research by Landman Economics and (...)

26With the end of the Coalition Government’s five-year spending, an assessment of the claims of its impact assessments against the reality of what transpired became possible. It was clear that the actual outcomes of the Coalition Government’s cuts in welfare spending and budgetary reform were not proportionate according to income group; with the wealthiest losing the most and the poorest the least in percentage terms. In fact, quite the opposite had occurred: the actual impact gradient was the exact reverse of what had been promised. In July 2014, the National Institute of Economic and Social Research23 simultaneously calling for greater transparency and more standardised impact assessment, reported that certain groups had been disproportionately affected by cuts to spending. These included: the disabled (especially disabled children and those also in low-income groups); women (particularity in relation to cuts in benefits and tax credits relating to children); and Black and Asian households (especially in relation to reductions in education spending and housing allocations). With respect to income and household consumption groups, the report graphically demonstrated the wholly regressive nature of government fiscal policies on a range of measures. It revealed that from decile 1 to decile 8 the pattern of detriment represented a ‘mirror-image’ of the distribution predictions that had been presented by the Coalition Government.

  • 24 The Landman Economics model uses a wider and more up-to-date set of that those used by the HM Trea (...)

27The most significant cause of this trend was reductions in tax credits and benefits whilst changes for ‘indirect tax’ (on consumption goods) was also a factor. The overall pattern was that those in the lower income groups lost out more than those in the middle and upper groups up to decile 9. A more comprehensive analytical model, the Landman Economics model,24 confirmed the contrast between what the public was promised and what transpired. In November 2014, the report produced by the Centre for Analysis of Social Exclusion and the London School of Economics confirmed these findings.

[…] some groups were clear losers on average—including lone parent families, large families, children, and middle-aged people (at the age when many are parents), while others were gainers, including two-earner couples, and those in their 50s and early 60s.

  • 25 De Agostini, P. Hills, J. and Sutherland, H. (2014), ‘Poor Lose, and Rich Gain from Direct Tax and (...)

Across the income distribution as a whole, the changes were regressive. On this comparison, the bottom half lost (with the poorest groups losing most as a proportion of their incomes) and the top half gained […].25

  • 26 Beatty, C. and Fothergill, S. (2016), The Uneven Impact of Welfare Reform. The Financial Losses to (...)
  • 27 Corlett, A. and Clarke, S. (2017), Living Standards 2017. The Past, Present and Possible Future of (...)

28In its income distribution forecast for the period 2016–2017 to 2020–2021, factoring in welfare reform with slight growth in the UK economy for 2014–2015 and using data from the Government’s own Office for Budgetary Responsibility, the Resolution Foundation predicted further reductions in living standards for all income groups within the bottom half of the working population. This was based upon: a three-year freeze in the levels of working age benefits; greater than previously forecast price rises; reductions in work allowances following the introduction of Universal Credit; and the loss of benefits for families with more than two children. By region, three quarters of the twenty hardest-hit areas have more than the national average share of households with three or more dependent children and twelve have an Asian population greater than ten percent of the total. A March 2016 report into the unequal effects of welfare reform concluded that the “more deprived the Local Authority the greater the financial loss”.26 The conclusion was that Theresa May’s government was set to be “the worst on record for income growth in the bottom half of the working age income distribution”; and would preside over the “biggest rise in inequality since the 1980s, reaching record highs after housing costs by 2020–2021”.27

  • 28 Corlett, A. and Clarke, S. (2017), p. 10.

Projected disposable incomes 2016–2017 to 2020–2021. Resolution Foundation 2017.28

29The spending cuts then had not fallen ‘fairly’ across the spectrum of income groups in the UK; they had fallen unfairly. Indeed, the distance between what the Coalition Government had promised the British electorate in 2010 and the real effects after five years made the outcome more than unfair; it made it an injustice and a deceit.

30The political refrain of successive governments of the last thirty years has been the intention of breaking a perceived ‘culture of dependency’ on benefits and moving people into work. At the 2015 Conservative Party conference the then British Prime Minister David Cameron declared in his keynote speech that the vision behind the May budget of that year was one of moving from a ‘high tax, low wage’ economy, to a ‘low tax, high wage’ economy. The picture that is emerging, however, is quite different. Rather, we see the creation by policy of an employment market rigged increasingly on terms that are advantageous only towards employers. With relative wages held down and fewer types of state support available, and those set at decreasingly adequate levels, a culture of ‘low wage dependency’ has become established for the least well-off in society. In this situation, workers, despite ‘staying off benefits’ and remaining in employment as they are urged, become trapped in jobs that do not pay enough for them properly to support themselves and their families. They become vulnerable also to unscrupulous employer practices designed to maximise worker output, with no guarantee of proportionate reward. The result is large numbers of workers who take home less than the National Minimum Wage, are forced to accept ‘zero-hour contracts’, work in unsafe and unhealthy conditions and work every hour they are able, including the most family-unfriendly, to make ends meet. The ‘low tax, low wage’ agenda then, is ultimately an ‘exploitation charter’.

Notes

1 Pember Reeves, M. (1984 [1913]), Round About a Pound a Week. Virago, https://archive.org/details/roundaboutpoundw00reevrich

2 Ibid., p. 57.

3 Ibid.

4 Ibid., p. 145.

5 Wilkinson, R. and Pickett, K. (2009), The Spirit Level: Why More Equal Societies Always Do Better. Allen Lane.

6 Lansley, S. and Mack, J. (2013), ‘A More Unequal Country?’, Poverty and Social Exclusion Newsletter. 16 April, http://www.poverty.ac.uk/editorial/more-unequal-country

7 Dorling, D. (2015), Injustice. Why Social Inequality Still Persists. Policy Press, p. 388.

8 Equality Trust (2017), ‘The Scale of Economic Inequality in the UK’, https://equalitytrust.org.uk/scale-economic-inequality-uk

9 Office for National Statistics (2017), https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/datasets/theeffectsoftaxesandbenefitsonhouseholdincomefinancialyearending2014

10 Dorling, D. (2015).

11 Jones, O. (2016), Chavs. The Demonization of the Working Class. Verso

12 Lansley, S. and Mack, J. (2015), Breadline Britain. The Rise of Mass Poverty. p. 65.

13 Wilkinson, R. and Pickett, K., p. 173.

14 Low Pay Commission (2014), The Future Path of the National Minimum Wage, https://www.gov.uk/government/publications/the-future-path-of-the-national-minimumwage-2014, p.16.

15 D’Arcy, C. and Kelly, G. (2015), Analysing the National Living Wage Impact and Implications for Britain’s Low Pay Challenge. Resolution Foundation, http://www.resolutionfoundation.org/app/uploads/2015/07/RF-National-Living-Wagebriefing.pdf

16 Toynbee, P. (2003), Hard Work. Life in Low Pay Britain. Bloomsbury, p. 178.

17 Save the Children (2012), Ending Child Poverty: Ensuring Universal Supports Working Mums. How Will Universal Credit Affect Poor Families?,http://www.savethechildren.org.uk/resources/online-library/ending-child-poverty-ensuring-universal-credit-supports-working-mums

18 Daly, M. and Kelly, G. (2015), Families and Poverty: Every Day Life on a Low Income. Policy Press, p. 50.

19 O’Hara, M. (2014), Austerity Bites: A Journey into the Sharp End of Cuts in the UK Policy Press, p. 67.

20 Ghelani, D. and Tonutti, G. (2017), The Impact of the Two-child Limit to Tax Credits. Policy in Practice. April, p. 3.

21 ‘Equivalisation’ adjusts income estimates from purely monetary units into realistic effective income assessments.

22 HMS Treasury (2014), Impact on Households: Distributional Analysis to Accompany Budget 2014, http://socialwelfare.bl.uk/subject-areas/government-issues/socialpolicy/%5bTreasury%5d/impact14.aspx

23 Reed, H. and Portes, J. (2014), Cumulative Impact Assessment. A Research by Landman Economics and the National Institute of Economic and Social Research (NIESR) for the Equality and Human Rights Commission. Equality and Human Rights Commission. Research report 94, https://www.equalityhumanrights.com/sites/default/files/research-report-94-cumulative-impact-assessment.pdf

24 The Landman Economics model uses a wider and more up-to-date set of that those used by the HM Treasury, including for instance the effects of localisation of Council Tax Benefit.

25 De Agostini, P. Hills, J. and Sutherland, H. (2014), ‘Poor Lose, and Rich Gain from Direct Tax and Benefit Changes Since May 2010—Without Cutting the Deficit’, LSE/CASE, November, p. 5.

26 Beatty, C. and Fothergill, S. (2016), The Uneven Impact of Welfare Reform. The Financial Losses to Places and People, Centre for Regional and Social Economic Research and Sheffield Hallam University, p. 3, https://www4.shu.ac.uk/research/cresr/sites/shu.ac.uk/files/welfare-reform-2016_1.pdf

27 Corlett, A. and Clarke, S. (2017), Living Standards 2017. The Past, Present and Possible Future of UK Incomes. Resolution Foundation Report, p. 10, http://www.resolutionfoundation.org/publications/living-standards-2017-the-past-present-and-possible-future-of-uk-incomes/

28 Corlett, A. and Clarke, S. (2017), p. 10.

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