Millions of people in UK would need to double their income to escape poverty, new report warns

Published

2 years ago

January 23, 2024

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Millions of Britons would need to more than double their income to climb out of poverty, according to a new report criticising “social failure at scale”.

According to the Joseph Rowntree Foundation, six million people were in very deep poverty in 2021-22 – 1.5 million more than 20 years ago.

This means they received less than 40% of the country’s median (middle) income after housing costs.

These people would need an additional £12,800 a year to reach the poverty line, which is defined as 60% of median income.

Giving an example of a couple with two children under 14 living in poverty, JRF suggested the average income for this type of family after housing costs was £21,900 – and they would need an extra £6,200 yearly just to reach the poverty line.

In the mid-1990s, the gap was £3,300 after adjusting for inflation.

The JRF has warned that the poverty gap – the amount of money needed to bring the incomes of those in poverty to the poverty line – has widened.

In 2021-22, 22% of the population (14.4 million people) were in poverty in the UK – including 8.1 million working-age adults, 4.2 million children and 2.1 million pensioners.

This equates to two in 10 adults, and three in 10 children.

There are many reasons why people are stuck in poverty – including illnesses or redundancies – but according to the Big Issue, “structural and systemic issues” worsened by increasing living costs create a “cycle that keeps people trapped” in hardship.

The JRF showed that poverty rates grew rapidly under Margaret Thatcher’s administration in the 1980s and remained high, with small decreases in following governments.

Its report urged political parties to include an essentials guarantee in Universal Credit, ensuring people always have enough to cover “life essentials like food and energy”.

Former prime minister Gordon Brown recently told Sky News that Universal Credit was “not working” and needed to be addressed after citing families unable to afford fundamental housing appliances and forgoing basic hygiene products like soap and toothpaste due to the cost of living crisis.

The Trussell Trust network, which supports more than 1,300 food bank centres across the UK, had forecast that more than 600,000 people would rely on food banks from December until February this year.

No stigma in baby bank ‘village’

Sky News correspondent Shingi Mararike visited Hartlepool Baby Bank in the North East – a corner of the country where the poverty being described by the Joseph Rowntree Foundation cuts through more than most.

With storerooms packed to the ceilings with boxes full of clothes and other baby items, founder Emilie de Brujin said everything they had stocked was neither “flash nor expensive” but the “essentials” that parents need to take care of their kids.

Socks, underwear, shoes, bibs and sterilisers were kept in one room; in another were “maternity packs” containing basics for every pregnant mum like nappies, cream, bed mats and breast pads.

Ms de Brujin said it was “hard work” to store everything as they couldn’t afford a bigger space and the centre now catered for older children too.

She said when the baby bank started, clothes were limited to 0-2-year-olds but after COVID, clothes extended to their siblings – children up to 12 years of age.

Ms de Brujin also said: “We didn’t want to say [to families] go here for one child, go there for another. No one’s got the time. Poverty is really time-consuming. Families don’t have cars and have to walk in all weathers.”

She added: “Nobody wants to use a baby bank but they have to and we make that as pleasant an experience as we can. All I ask from my volunteers is one thing – a smile.” She described the place as a “village” where no one should feel stigmatised.

The clothes mainly come from donors and are items their children don’t need. “It goes from one child to another which is lovely. We have people knit for us too and we’re lucky as our local community support us so well,” the founder said.

She said that the parents who frequented the baby bank weren’t just those on benefits or affected by immigration.

“We’ve seen parents where one hasn’t recovered job-wise since COVID, or hours have been cut due to business costs… so these are working parents. It’s a whole world scenario where everyone is touched by rising costs at the moment.”

Sky News spoke to one mum with seven children under one roof, and the additional struggles she would otherwise face had it not been for Hartlepool Baby Bank.

Hannah Southwell-Dymock said the centre was “very important” especially as a student where her finances “didn’t stretch at all”.

She says she saves £15 a week from not having to buy nappies – a significant amount given rising bills and necessities.

“We can actually get food”, she said. “If we didn’t have the bank it would be the case of what food we can get and survive off.”

Paul Kissack, JRF group chief executive, confirmed families were spiralling deeper below the poverty line.

He said: “Little wonder that the visceral signs of hardship and destitution are all around us – from rocketing use of foodbanks to growing numbers of homeless families.

“This is social failure at scale.”

Mr Kissack said political parties must set out their plans to “turn back the tide on poverty” as the country approaches a general election.

Consumer champion Martin Lewis said the “stark reality” was that people’s incomes were less than their minimum necessary spend, despite help from money charities.

He said the JRF report must prompt policymakers and regulators to “sit up [and] take note and address these deep-rooted problems”.

A government spokesperson said: “We are continuing to support families with the cost of living backed by £104bn – and there are 1.7 million fewer people living in absolute poverty, including 400,000 children, compared to 2010.

“Children are five times less likely to experience poverty living in a household where all adults work, compared to those in workless households.”

The spokesperson added that taxes have been cut and inflation is being curbed “so hard-working people have more money in their pocket”.

Business

Whitehall on alert for collapse of Gupta’s steel empire

Published

13 hours ago

August 16, 2025

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Whitehall on alert for collapse of Gupta's steel empire

The metals tycoon Sanjeev Gupta is this weekend plotting a controversial deal to salvage his remaining UK steel operations and avert their collapse into compulsory liquidation – a move that would put close to 1,500 jobs at risk.

Sky News has learnt that Mr Gupta is in talks about a so-called connected pre-pack administration of Liberty Steel’s Speciality Steel UK (SSUK) arm, which would involve the assets being sold – potentially to parties linked to him – after shedding hundreds of millions of pounds of tax and other liabilities to creditors.

Begbies Traynor, the accountancy firm, is understood to be working on efforts to progress the pre-pack deal.

This weekend, Whitehall sources said that government officials had stepped up planning for the collapse of SSUK if an already-deferred winding-up petition scheduled to be heard next Wednesday is approved.

If that were to happen, SSUK would be likely to enter compulsory liquidation within days, with a special manager appointed by the Official Receiver to run the operations.

Mr Gupta’s UK business operates steel plants at Sheffield and Rotherham in South Yorkshire, with a combined workforce of more than 1,400 people.

SSUK is Britain’s third-largest steel producer.

Sources close to Mr Gupta could yet secure a further adjournment of the winding-up petition to buy him additional breathing space from creditors.

In May, a hearing was adjourned after lawyers acting for SSUK said talks had been taking place with “a third-party purchaser”.

Their identity has not been publicly disclosed, and it has been unclear in recent weeks if any such discussions were continuing.

A connected pre-pack risks stiff opposition from Liberty Steel’s creditors, which include HM Revenue and Customs.

UBS, the investment bank which rescued Credit Suisse, a major backer of the collapsed finance firm Greensill Capital – which itself had a multibillion dollar exposure to Liberty Steel’s parent, GFG Alliance – is also a creditor of the company.

Grant Thornton, the accountancy firm handling Greensill’s administration, is also watching the legal proceedings with interest.

The Serious Fraud Office launched a probe into GFG – which stands for Gupta Family Group – in 2022.

On Saturday, a Liberty Steel spokesperson said: “Discussions are ongoing to finalise options for SSUK.

“We remain committed to identifying a solution that preserves electric arc furnace steelmaking in the UK-a critical national capability supporting strategic supply chains.

“We continue to work towards an outcome that best serves the interests of creditors, employees, and the broader community.”

Last month, The Guardian reported that Jonathan Reynolds, the business secretary, was monitoring events at Liberty Steel’s SSUK arm, and had not ruled out stepping in to provide support to the company.

Such a move is still thought to be an option, although it is not said to be imminent.

The Department for Business and Trade has been contacted for comment.

It has previously said: “We continue to closely monitor developments around Liberty Steel, including any public hearings, which are a matter for the company.

“It is for Liberty to manage commercial decisions on the future of its companies, and we hope it succeeds with its plans to continue on a sustainable basis.”

Wednesday’s winding-up petition was filed by Harsco Metals Group, a supplier of materials and labour to SSUK, and is said to be supported by other trade creditors.

Mr Reynolds has already orchestrated the rescue of British Steel, the Scunthorpe-based steelmaker, after failing to reach a government aid deal with Jingye Group, the company’s Chinese owner.

Jingye had been preparing to permanently close Scunthorpe’s remaining blast furnaces, prompting Mr Reynolds to step in and seize control of the company in April.

The government has yet to make a decision to formally nationalise British Steel, although that is anticipated in the autumn.

Tata Steel, the owner of Britain’s biggest steelworks at Port Talbot, has agreed a £500m government grant to build an electric arc furnace capable of manufacturing greener steel.

Other parts of Mr Gupta’s empire have been showing signs of financial stress for years.

The Financial Times reported in May that he was preparing to call in administrators to oversee the insolvency of Liberty Commodities.

Separately, HMRC filed a winding-up petition against Liberty Pipes, another subsidiary, earlier this month, The Guardian reported.

Mr Gupta is said to have explored whether he could persuade the government to step in and support SSUK using the legislation enacted to take control of British Steel’s operations.

Whitehall insiders told Sky News in May that Mr Gupta’s overtures had been rebuffed.

He had previously sought government aid during the pandemic but that plea was also rejected by ministers.

SSUK, which also operates from a site in Bolton, Lancashire, makes highly engineered steel products for use in sectors such as aerospace, automotive and oil and gas.

The company said earlier this year that it had invested nearly £200m in the last five years into the UK steel industry, but had faced “significant challenges due to soaring energy costs and an over-reliance on cheap imports, negatively impacting the performance of all UK steel companies”.

Business

Trump’s son-in-law Kushner takes stake in UK lender OakNorth

Published

1 day ago

August 15, 2025

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Trump's son-in-law Kushner takes stake in UK lender OakNorth

The private equity firm set up by Jared Kushner, President Donald Trump’s son-in-law, is to take a stake in OakNorth, the British-based lender which has set its sights on a rapid expansion in the US.

Sky News has learnt that Affinity Partners, which has amassed billions of dollars in assets under management, has signed a deal to acquire an 8% stake in OakNorth.

The deal is expected to be concluded in the coming weeks, industry sources said on Friday.

Mr Kushner established Affinity Partners in 2021 after leaving his role as an adviser to President Trump during his first term in the White House.

He is married to Ivanka, the president’s daughter.

Affinity manages money for a range of investors including the sovereign wealth funds of Qatar and Saudi Arabia.

Insiders said that Affinity Partners was buying the OakNorth stake from an unidentified existing investor in the digital bank.

The valuation at which the transaction was taking place was unclear, although OakNorth was valued at $2.8bn in its most recent funding round in 2019.

OakNorth, which was founded by Rishi Khosla, is targeting substantial loan growth in the US in the coming years.

Earlier this year, it agreed to buy Community Unity Bank (CUB), which is based in Birmingham, Michigan, in an all-share deal.

The transaction is awaiting regulatory approval.

OakNorth began lending in the US in 2023 and has since made roughly $1.3bn of loans.

The bank is chaired by the former City watchdog chair Lord Turner, and is among a group of digital-only British banks which are expected to explore stock market listings in the next few years.

Monzo, Revolut and Starling Bank are all likely to float by the end of 2028, although London is far from certain to be the destination for all of them.

Similarly, OakNorth’s ambition to grow its US presence means it is likely to be advised by bankers that New York is a more logical listing venue for the business.

Launched in 2015, the bank is among a group of lenders founded after the 2008 financial crisis.

Its UK clients include F1 Arcade and Ultimate Performance, both of which have themselves expanded into the US market.

Its existing backers include the giant Japanese investor SoftBank, GIC, the Singaporean state fund, and Toscafund, the London-based asset management firm.

Since its launch, OakNorth has lent around £12.5bn and boasts an industry-leading loan default ratio.

Last year, it paid out just over £30m to shareholders in its maiden dividend payment.

OakNorth has been growing rapidly, saying this year that it had recorded pre-tax profits of £214.8m in 2024, up from £187.3m the previous year.

It made more than £2.1bn of new loans last year.

On Friday, a spokesperson for OakNorth declined to comment.

Business

Government will not offer bailout to UK’s largest bioethanol plant

Published

1 day ago

August 15, 2025

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Government will not offer bailout to UK's largest bioethanol plant

The UK’s largest bioethanol plant is set for closure with the loss of 160 jobs after the government confirmed it would not offer a bailout deal to the facility in Lincolnshire.

Owners Vivergo, a subsidiary of Associated British Foods, had warned that the plant would close without government support, and sources at the company have told Sky News the wind-down process is now likely to begin.

An ABF spokesperson, which also owns Primark, said the government’s decision was “deeply regrettable” and it had “chosen not to support a key national asset”.

They added that the government had “thrown away billions in potential growth in the Humber and a sovereign capability in clean fuels that had the chance to lead the world”.

Vivergo have blamed the UK’s trade deal with the United States, which ended a 19% tariff on imported ethanol, for making the plant unviable.

Ethanol tariffs were cut along with those on beef as part of the UK-US deal, which focused on reducing or removing Donald Trump’s import taxes on UK cars and aerospace parts.

The plant, which converts wheat into the fuel typically added to petrol to reduce carbon emissions, was already losing £3m a month before the trade deal, with industrial energy prices, the highest among developed economies, cited as a major factor.

Vivergo and ABF have warned of the threat to the plant since the spring, but had hoped negotiations with the government would lead to an improved offer by the end of the week. On Friday morning, they were told there would be no bailout.

Government sources said they had employed external consultants to provide advice, and pointed out that the plant had not been profitable since 2011.

A government spokesman said: “Direct funding would not provide value for the UK taxpayer or solve the long-term problems of the bioethanol industry.”

“This government will always take decisions in the national interest. That’s why we negotiated a landmark deal with the US which protected hundreds of thousands of jobs in sectors like auto and aerospace.

“We have worked closely with the companies since June to understand the financial challenges they have faced over the past decade, and have taken the difficult decision not to offer direct funding as it would not provide value for the taxpayer or solve the long-term problems the industry faces.

“We recognise this is a difficult time for the workers and their families and we will work with trade unions, local partners and the companies to support them through this process.

“We also continue to work up proposals that ensure the resilience of our CO2 supply in the long-term in consultation with the sector.”

Unite general secretary Sharon Graham said the government’s decision not to provide support to the UK’s bioethanol industry was “short-sighted” and “totally disregards the benefits the domestic bioethanol sector will bring to jobs and energy security”.

“Once again, the government’s total lack of a plan to support oil and gas workers as the industry transitions is glaring,” Ms Graham added.

GMB Union’s Charlotte Brumpton-Childs said the closure of the Hull and Redcar bioethanol plants would result in “working people losing their livelihoods”, adding that this was the impact of tariffs and trade deals.

“They’re not numbers in a spreadsheet. These are lives put on hold and communities potentially devastated,” she said.