Baroness Philippa Stroud, Chair of the Social Metrics Commission.
The UK is living through the most significant health, social and economic crisis of modern times. But not everybody is being impacted by the Coronavirus pandemic in the same way. A new report from the Social Metrics Commission (SMC), which I chair, shows that those who were already struggling to make ends meet are being hit hardest.
Research we conducted with YouGov reveals that almost two thirds (65 per cent) of those who were living in deep poverty – that is, more than 50 per cent below the poverty line – and were employed before the virus hit have lost their jobs, been furloughed, or seen their hours and/or wages drop. This compares to just over a third (35 per cent) of those living more than 20 per cent above the poverty line prior to the crisis.
Our analysis shows that, over the last 20 years, rising employment rates for those in poverty were helping families move out of deep poverty, so they were more likely to be able to escape poverty in the future.
Families in poverty where the adults work full-time are less than half as likely to experience deep poverty than those with part-time work or no job. A reversal of this success story could have a profound effect; increasing poverty rates and deepening poverty for those already below the poverty line. So supporting employment, especially for those on the lowest incomes, must remain a key priority for Government as the country emerges from the lockdown restrictions that have caused the economy to contract so severely.
We also need to empower those in or at risk of poverty to increase their financial resilience. The SMC’s analysis shows that, before the crisis hit, nearly three in ten people in poverty lived in families that were behind paying the bills and seven in ten were in families where no-one saves. This means they did not have a buffer available to them when the pandemic struck and are therefore more likely to have fallen further into poverty.
However, it is not all bad news. The SMC’s analysis also shows that, after rising for the last three years, the poverty rate for both children and pensioners had plateaued before the crisis, and that, since the turn of the millennium, poverty levels haves fallen for lone-parent families.
In addition, there has been a drop in the poverty rate for families that include a disabled child over the last 10 years, and across all age groups there has been a fall in the proportion of people in poverty who are also in persistent poverty.
These success stories demonstrate that poverty can be tackled and reduced. But with millions of people still in poverty, we cannot be complacent.
The first step is to ensure that poverty is properly measured. This is essential if action is going to be taken to improve the lives of those currently living in, or at risk of falling into, poverty, and to ensure that those individuals, families, communities, and areas of the UK that have historically been left behind are supported to improve their situation.
After decades of damaging debate that has distracted focus away from the vital action needed to drive better outcomes for the most disadvantaged in society, a new consensus is needed so that policymakers and politicians can track progress and can be held to account.
I am delighted that the Government has committed to creating new experimental national statistics based on the SMC’s approach, as the first step towards adopting it as an official measure.
While it is entirely appropriate that this work was paused during the pandemic so the Government could focus on providing support to those individuals and families whose health and livelihoods have been impacted by the virus, the need to return to it is clear.
The next step is for a full Poverty Commission to be established to develop solutions based on this measurement data. We already know that poverty is more likely to be experienced by some families than others, and that the nature of that experience is incredibly varied.
The causes and implications of the various types of poverty are different, which means that the approach needed to tackle them will be different. As with the SMC, it will be important that the Poverty Commission has support from individuals and organisations across the political spectrum as well as from business, the charity sector, and those who are in poverty.
However, while the Poverty Commission will need to conduct further work to assess what really creates an enabling environment for different people, the existing data clearly shows that work is one of the most effective pathways out of poverty. Therefore, as the country emerges from the coronavirus pandemic, an employment- and skills-based recovery will be vital.
We must enable the smooth transition of those on low incomes who have been furloughed and need to increase their hours, to avoid them falling deeper into poverty. We need to re-open schools so that the education of the poorest is protected and to allow their parents to work the extra hours that could make all the difference.
And we need to ensure that schools are preparing students for the jobs that will be available in the future, equipping them with the skills they will need in a world of artificial intelligence and new digital technologies.
In addition, given half of those in poverty live in a family with a disabled person, we must increase support to help those with disabilities find full-time employment. The inescapable cost of housing, and especially private renting, is also one of the major factors contributing to poverty, so it is also vital that we make housing more affordable.
My hope is that the SMC’s poverty measurement framework can inform the creation of a comprehensive anti-poverty strategy. Where there are obstacles, we need to remove them, and where individuals can build their own pathway out of poverty, we need to ensure that they have the tools and support they need to do so.
This will require a partnership between those in poverty and policymakers, business leaders, and community builders across the UK. Together we can ensure that poverty is less prevalent in the UK after the coronavirus crisis than it was before and that as many people as possible can enjoy a life free of poverty in the future.