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Poverty Britain

The Experian Public Sector survey released today of families in work but at risk of a slide into destitution is very telling. There are 7 million adults in this category, in addition to the 5.5 million working-age adults already living in poverty (i.e. less than 60% of the national median income) – a total of nearly a third of the national adult population.

The working adults are already squeezed to the limit, sometimes going without food or any other expenditure for days before the next pay packet comes in. What the survey documents for the first time is that these families can be tipped over into destitution by one unpredicted event, which could be an unexpectedly large utilities bill or failure of heating because of a boiler breakdown, let alone loss of a job or reduced hours. This is a situation Britain has not known since the 1930s.

The roots of this go deep. Following the frightening precedent of the US where average wages have been stagnant ever since the 1970s, average wages in the UK have over the decade since 2005 been pursuing the same course. This was alleviated by tax credits which continued to boost living standards even in the face of flat or falling wages. But now that the government is scaling back tax credits and particularly on the back of huge benefit cuts, of which only some 12% have so far yet been implemented, real living standards are beginning to slide downwards for the bottom third of the population to a degree that seriously threatens their basic security.

What is so brutal about this whole unravelling catastrophe is that it is avoidable. The deficit can be reduced far more effectively and successfully, not by swingeing expenditure cuts in the depths of a recession which are counter-productive (it is now taking longer to pay off the deficit because of the marked fallback in tax receipts), but by a jobs and growth strategy funded by taxation of the ultra-rich who have so far been let off the hook scot-free.

The flip-side of the coin revealing the gradual slippage of nearly a third of the working population into poverty and even homelessness and destitution is that over this same period of the last year top management (the chief executives of the FTSE-100 companies) had a 12% rise in their pay, worth £540,000 a year or £10,385 a week, which took their remuneration to £4.8 millions a year. So far from being all in it together, there is a financial apartheid that gets deeper every day.

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