Having the same or having enough? Inequality & poverty in a Post-Covid Recession.

As the Office of National Statistics (ONS) confirms that the United Kingdom entered into the sharpest recession since records began in 1955, it is clear that Covid-19 has wrought untold damage with very few economic sectors left untouched by the pandemic. Over 113,000 jobs lost since the March lockdown began with the aviation, retail and hospitality sectors particularly hard hit. Here in the West Midlands, Debenhams in Birmingham’s Bull Ring will not be re-opening its doors and there are now wider fears that the whole company may be placed into liquidation putting some 14,000 jobs at risk. Likewise John Lewis which has also announced 1,300 job cuts is closing stores and consolidating its online offering including the iconic Grand Central store at Birmingham New Street Station, opened less than five years ago.

Many of those employed in these sectors are most likely either on minimum or just above minimum wage levels (currently £8.72 per hour for over 25’s compared to UK living wage rate of £9.30 per hour). As the lockdown has eased there has been a partial recovery in these sectors, but with unemployment now set to rise from the 3.9% rate in March before the lockdown to 11.7% by the end of 2020, it is not hard to see that recovery will be a long and slow process.

Poverty in the UK

In its most recent report into levels of poverty in the UK the Joseph Rowntree Foundation[1] listed the following in its key findings-;

  • Over the last five years, poverty rates have risen for children and pensioners. Poverty rates are highest in London, the North of England, Midlands and Wales
  • Around 14 million people are in poverty in the UK (more than one in five of the population) made up of 8 million working-age adults, 4 million children and 2 million pensioners
  • 20% of housing benefit claimants are actually in paid work
  • Around 56% of people in poverty are in a working family, compared with 39% 20 years ago
  • Seven in ten children in poverty are now in a working family

Furthermore in the year to March 2020, The Trussell Trust gave out 1.9m food parcels (1.6m to March 2019) where foodbank usage has increased by 74% in past five years[2] much of it due to irregular periods of work, rising housing costs and where benefit sanctions may have been applied. The ONS estimate that 6.3% of the UK population have submitted claims for benefits due to Covid-19 unemployment regardless of their previous economic or employment status, with the 16-24 age groups being the hardest hit.

Churches and anti-poverty campaigners like the Trussell Trust and Christians Against Poverty, have repeatedly warned that those who already suffer from the high levels of economic inequality we experience in our country today will be the chief victims of this pandemic, as they are the least able to absorb the impact the coming recession will undoubtedly bring on top of the closures and job losses already announced.

[1] Joseph Rowntree Foundation uk_poverty_2019-20_findings

[2] www.trusselltrust.org/latest-stats

Bridging the Gap

Religious and society think tank, Theos, who carry out research into the role of faith in our society today recently published a report into economic inequality called, Bridging the Gap: Economic Inequality and Church Responses in the UK. In its executive summary it states the UK has one of the highest levels of income inequality in Europe along with the resulting social problems such as crime and other anti-social activity.[1] Many of us from faith communities are all too familiar with the impact of income inequality on our own areas, and the report offers a theological response to the problem where the biblical version of economic justice demands everyone should have enough and should share in God’s blessings.[2]  

Providing for greater social mobility where equality of outcome is linked to equality of opportunity, is often cited as the best way to tackle poverty and allow people to flourish to their full potential. While this is something which finds agreement across the political spectrum, there is often disagreement on the methods to achieve it. Some believe the best way to tackle the problems of poverty caused by economic inequality are through a free market economy. Others prefer a more centrist approach where the state is the enabler and the sectors respond accordingly. How can the churches be seen to influence the debate into tackling the social and economic problems of poverty especially since they already are the largest providers of relief and other support? You will have to read the full report but as it make clear; Churches and others do need to publicise more of what they currently do and share best practice with others. Preaching the Good News of the Gospel should also include preaching the Good News of Social Action among the poorest and most vulnerable in our society. Christian Social Justice charity, Church Action on Poverty, is organising a Challenge Poverty Week in England and Wales from 12th – 18th October building on the successful equivalent campaign in Scotland which has been running for the past five years. This campaign will doubtless raise awareness of the dire levels of poverty in our society and will run alongside other similar campaigns to highlight successful projects which continue to tackle poverty in individual areas. Naturally this is something which many people whether religious or not can and should support. If Relative Poverty is expressed as total household income being a certain percentage below the median income (currently less than £18,400 pa expressed as 60% of median income of £30,400 pa) and Absolute Poverty is household income being insufficient to maintain basic living standards, at what point on the economic scale do we declare there to be a level of poverty and inequality we do not fall below?

[1] S.Perfect, Bridging the Gap: Economic Inequality and Church Responses in the UK, (Theos Publications, 2020) p.10

[2] Bridging the Gap, p.47

Universal Principles

The moral philosopher Harry Frankfurt (b.1929), proposes a Principle of Sufficiency in that, “What matters is not everyone should have the same but each should have enough”.[1] Such a principle could be taken straight out of Exodus 16, the story of the Bread from Heaven provided to the Israelites during their wandering in the desert where those who needed more had more, and those who needed less got by on less. Here in the UK one of the key principles of the benefits system is Universality; where everyone gets basically the same regardless of need. Some would argue that while this may have been justified when the welfare state was first founded, as the decades since have progressed, those original criteria have changed. As I was once told very helpfully by someone who worked at the DWP, it is easier and cheaper for the Treasury to ensure everyone who is entitled gets the same, rather than undertake an expensive means-tested programme which may actually cost less in the long run and ensure more money goes to those in greater need. Perhaps this is something Rishi Sunak should look at when he is planning our post-Covid economic landscape.

The issue around poverty and how we fix the problem is as much a moral one as well as an economic and political one. Yet there exists within humanity a natural in-built inequality which means that there are always to coin a term, winners and losers. While we may advocate a system where everyone has a fair and equal chance for success the outcomes often dictate otherwise for any number of reasons often beyond anyone’s control.

Can we realistically expect to solve the problems of poverty and inequality simply by levelling everything down?

[1] Bridging the Gap, p.34

Levelling Up

At the last General Election, many of those voted Conservative particularly in the old Labour heartlands were from less well-off backgrounds, mainly voted for Brexit and want the Government to tackle the inherent inequalities by levelling the country up. To do so will take many years of pain and anguish as the country sets out on a new economic journey and a landscape which will look decidedly different by the time our Grandchildren reach their majorities. While technology and market forces can be harnessed to set out a new pathway to reduce economic inequality, the biggest change needs to come from humanity itself. Already we are seeing signs of people not wanting to return to the old ways, but human tendency to selfishness will remain a problem unless those in authority provide the necessary moral and political leadership to affect the sea-change necessary.

Our post-Covid world has started with a sharp recession. How soon we come out of it – will it be V shaped or U shaped is impossible to tell. However there is one constant which all of us should remember and can be found in the words of Deuteronomy Chapter 15, verse 11 which says;-

“Since there will never cease to some in need on earth, I therefore command you to open your hand to the poor and needy in your land”.