Millions of people in UK would need to double their income to escape poverty, new report warns
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.
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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.
People have been increasingly reliant on food banks – especially this winter
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.
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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
Vivergo: How US-UK trade deal could bring about collapse of huge renewable energy plant in Hull
The smell of yeast still hangs in the air at the Vivergo plant in Hull but the machines have fallen quiet.
More than 100 lorries usually pass through here each day, carrying 3,000 tonnes of wheat. It is milled, fermented and distilled. The final product is bioethanol, a renewable fuel that is then blended into E10 petrol.
This is a vast operation. It took several years to build, with considerable investment, but it is on the verge of closing down. Management and staff are holding out for a last-minute reprieve from the government but time is running out.
It’s been a turbulent journey. The plant was already being annihilated by US rivals, losing about £3m a month. Vivergo and Ensus, based in Teesside, blamed regulations that enable US companies to earn double subsidies.
They were pushing for regulatory change but then a killer blow: The US-UK trade deal, which allows 1.4 billion litres of American ethanol into the UK tariff-free (down from 19%).
“We’ve effectively given the whole of the UK market to the US producers,” said Ben Hackett, managing director at Vivergo.
“If we were to have the same support that the US industry has, if we could use genetically modified crops, we wouldn’t need that tariff. We would be able to compete. If we had the same energy costs. We wouldn’t need those tariffs.”
The government has the weekend to come up with a plan that could keep the business running. If it fails, Vivergo will begin issuing redundancy notices to its 160 staff.
Ben Hackett
It’s a devastating prospect for workers, many of them live in Hull and are nervous about alternative opportunities in the area.
Mike Walsh, a logistics manager who has been working at the plant for 14 years, said: “It’s not a great place to be at the moment. It’s a very well paid, very high-skilled role and they’ve (Vivergo) given everybody an opportunity in an area that doesn’t pay that well…. The jobs market isn’t as good as what people would like. So it does impact the local economy.”
He called on the government to “help us, save us, give this industry a future”.
His colleague Claire Wood, lead productions engineer, said: “I moved here after a career in oil and gas for 10 years, partly because I want to be part of the transition to renewable fuels. I can see so much potential here and it’s absolutely devastating to know that this place might be closed very, very shortly and that all that potential just goes away.”
Thousands more could be affected. Haulage companies may have to lay off truck drivers and farmers could also suffer a blow.
Vivergo makes bioethanol using wheat. That wheat is bought from farms from Yorkshire and Lincolnshire.
Claire Wood
The National Farmers Union has sounded the alarm, saying: “Biofuels are extremely important for the crops sector, and their domestic demand of up to two million tonnes can be very important to balance supply and demand and to produce up to one million tonnes of animal feed as a by-product.”
Another bioproduct is carbon dioxide. The gas can be captured and used to put the fizz in drinks or injected into packaging to preserve food.
If Vivergo and Ensus were to go, Britain would lose as much as 80% of its output of carbon dioxide. Supplies are already tight across Europe, meaning this decision could compound shortages across a range of sectors, from meat-packing to healthcare.
The industry is calling on the government to help. Vivergo says it needs temporary financial support but that the government must create a regulatory and commercial environment in which it can thrive.
It says rules that award double subsidies to companies that use waste product in their bioethanol must be changed. At present, these rules are being used by US companies that make ethanol from Uldr – a by-product of processing corn. They argue this is not a genuine waste product.
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Another option is to grow the market. Industry leaders are calling on ministers to increase the mandated renewable fuel content in petrol from 10% to 15% and for an expansion into aviation fuels. That would allow British companies to carve out a space.
The government has been locked in talks with the company since June.
It said: “We will continue to take proactive steps to address the long-standing challenges it faces and remain committed to a way forward that protects supply chains, jobs and livelihoods.”
However, the time for talking is almost over.
Mr Hackett said he had no idea how the government would respond but he was firm with his stance, saying: “In times of global uncertainty, losing that energy certainty and supply from the UK is a problem.
“I think what they’re missing out on is the future growth agenda. We’re the foundation on which the green industrial strategy can be built. We make bioethanol that today decarbonises transport. Tomorrow it will decarbonise marine. It will decarbonise aviation.”
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