Minimum income standards - bottom rung of economic justice Statistics never enough to indicate reality of poverty for individuals & families whose incomes are unable to buy minimum for healthy living

5 May 2018

To the Commission on Economic Justice - a comment on key indicator 2. 

Minimum income standards - the bottom rung of economic justice -  Rev Paul Nicolson,  5th May 2018.   
 
The statistics in Key indicator 2 (shown below) are not enough to indicate the reality of poverty for individuals and families whose statutory minimum incomes are unable to buy the minimum food, fuel and other necessities needed for healthy living. For that purpose the government and the public need minimum income standards.  It is to be hoped that the Commission on Economic justice will add minimum income standards (MIS) as a key indicator. 
 
The essential measure of poverty is whether an individual or a family have enough income remaining to buy a healthy diet, water, fuel, clothes, transport and other necessities after rent, income and council tax have been paid.  The method of measuring that has been in researching minimum income standards. In 1997/98, then Chair of Zacchaeus 2000 Trust (Z2K), I raised £100,000 to commission the Family Budget Unit (FBU) to research the minimum income standards for a couple and a single person with two young children. A group of Christians meeting in the rooms of the Dean of Clare College, Cambridge discovered that there were no minimum income standards considered by the government before the Poll Tax was imposed on benefit incomes in 1990.  The FBU report "Low cost but acceptable - a minimum income standard for the UK" was published in 1998 by The Policy Press and Z2K. The methodology used for the food budget is attached. I took it to UNISON and to London Citizens who used it to persuade the Mayor, Ken Livingstone, to launch the London Living Wage in 2001. Having refused Z2K's application for minimum income standards funding in 1997 the Joseph Rowntree Foundation took on the funding of MIS at the University of Loughborough from 2002. Using Loughborough's research the Living Wage Foundation now sets the level of the London and UK living wages annually. 
 
However minimum income standards have been ignored by governments when setting the level of statutory minimum incomes in work or unemployment. The consequence is that the bottom rung of the UK benefit system does not provide a minimum income which can buy a healthy diet, adequate fuel and pay for clothes, transport and other necessities after rent, income and council tax have been paid.  
 
There were 3.6 million adults receiving £73.10 a week IS/JSA/ESA unemployment benefit, which is equal to £317 a month Universal Credit. see BEN01 main out of work  5benefits - 401,000 were lone parents. All other benefits are added to it. It has been losing value since 1979 (Bradshaw and Lynnes 2009). and increases have been frozen since 2011.  Using the latest Loughborough University  MIS researches (table 2)shows that £73.10 a week it is £20.55 a week short of the minimum income needed healthy living.  
 
    £pw
Healthy diet   45.59
Water   5.77
Fuel    16.48
Clothes    4.02
Transport   7.53
Other mecessities   14.26
Total MIS   93.65
IS/JSA/ESA   73.10
Shortfall   20.55
 
Since 2013 £73.10 is reduced further by paying rent due to the Bedroom Tax, the Benefit Cap and the Local Housing Allowance, all of which cut Housing Benefit. The Council Tax Benefit has also been cut since 2013, with the same consequence as the cuts in Housing benefit. It is made worse by the enforcement of Council Tax arrears through the Magistrates’ Court and the bailiffs, both of whose costs are added to the benefit claimants’ Council Tax arrears. Haringey Council alone took 11,000 benefit claimants to court for late or non-payment of Council Tax in 2017. The Benefit Sanction, Universal Credit and the zero-hours contract stop the benefit income needed for food, fuel and other necessities  for up to three months. The two child limit and the Work Capability Assessment can also have impacted a household before the benefit sanction. 
 
The consequence of all these policies is debilitating debt and hunger, which is known to damage mental and physical health, as shown by the blogs on Health Equality on our website written Dr Angela Donkin of the Institute of Health Equity,Professor Kate Pickett & Professor Richard Wilkinson of the Equality Trust, Madeleine Power of the University of York and Dr Carl Walker of the University of Brighton on the Taxpayers Against Poverty website.
 
Lowbirthweight
 
There is another very serious consequence of setting statutory minimum incomes at level which is too low to provide healthy life. It is of the greatest importance to the 401,000 lone parents claiming IS/JSA, most of whom are women. It is certain beyond doubt, due to the researches of the Institute if Brain Chemistry and Human Nutrition, that women need a healthy diet before and during pregnancy to give birth to a healthy baby. The incidence of Low birthweight in the Northumberland Park Ward of the London Borough of Haringey is between 10-12%. That ward is among the 5% of the most deprived wards in the UK, which has the highest level of low birth-weights in Europe. "Low birthweight associated with fetal growth restriction is the strongest predictor of poor learning ability, school performance, behavioral disorders and crime". Please see attached unpublished paper by Professor Michael Crawford, director of the Institute of Brain Chemistry and Human Nutrition.
 

The following is an extract from an article in the BMJ. "The latest data released by the ONS in March 2018 shows that infant mortality has risen for the second year running.(2) In 2016 there were 2651 infant deaths, compared to 2578 and 2517 in the preceeding two years.  Our analysis shows IMR has continued to rise particularly in the poorest children, whilst remaining stable in the most advantaged groups, further widening inequalities. We know that infant mortality is associated with social disadvantage..., The weakened social protection safety net is a plausible explanation for rising IMR among the most disadvantaged infants in England and Wales. Survival for the most vulnerable children among us will continue to be jeopardized unless policy makers take concerted action to improve the conditions for children to survive and thrive".


 

 

Key indicator 2: Poverty among children and adults A priority for all economies should be the reduction of poverty over time, both in relative and absolute terms, as both a percentage of the population and in absolute numbers. Where possible this should be achieved by giving people the opportunity to improve their circumstances, through work or education. But the state should also provide a safety net that keeps a household’s income above the poverty line. There are several alternative measures of poverty. One can look at the number of people living on absolute low incomes, defined as below 60 per cent of the median income in a given base year, or at numbers on relative low incomes, defined as below 60 per cent of the median income in the most recent year for which data is available. Poverty rates are reported both before housing costs (BHC) and after housing costs (AHC), since housing can make a large difference to the figures, with welfare benefits related to housing costs ameliorating poverty rates. Using the IPPR tax-benefit model, we have modelled the change in absolute poverty (using a base year of 2016/17), both before and after housing costs, between 2016/17 and 2017/18, dividing the total into adults, children, and within that, young children. We find that poverty among adults declined 2.5 per cent over the period, with 155,000 fewer adults living in absolute poverty in the most recent year (after housing costs). However, child poverty increased by 1.4 per cent over the same period, equivalent to 56,000 more children living in poverty. 


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