Winter is coming, and it will be harsher. People in “negative income”, whose incomings don’t cover their bills, are about to be hit even harder. Better economic news on “falling inflation” is a mirage when bills keep on rising.
Citizens Advice and the Social Market Foundation are this week calling for social tariffs – cheaper packages on essential bills for those on benefits – to stop millions more households sinking under debts and evictions.
Social tariffs are only a second best, they admit, to people having adequate incomes in the first place. No chance of that, with speculation that benefits may not rise next April with inflation. The rise traditionally follows September’s inflation rate. But that’s not set in law: there have been four savage years of freezes (2016-2020).
Chit-chat around the Torysphere suggests if inflation has fallen further by next April then that should be the rate, not this September’s. But that time lag was never taken into account when inflation was rising, so benefits never kept up. The Treasury saves £1.4bn for every 1% benefits drop below inflation, according to the Institute for Fiscal Studies.
Since 2010 the real value of unemployment benefits, cut again and again by George Osborne and Iain Duncan Smith, fell by 9%; for a family of three children the drop could have been three times as much. Adam Corlett of the Resolution Foundation, with a new report on rising poverty, rightly says many have forgotten the long-ago day in 2015 when David Cameron signed the UN’s sustainable development goals with a rousing commitment that included pledging Britain and all rich countries to halve their own poverty levels by 2030.
Corlett’s report, Half Time, finds that ambition will be missed by a country mile. Halving our poverty level would mean 5.9 million fewer people in poverty; instead he predicts that in 2024-25 alone another 300,000 will fall below the line. Rishi Sunak, in his great bonfire of “unachievable” projects and targets, from HS2 to net zero, can add this one, though he probably never even noticed it was there.
I’ll stop here for a moment, as I fear many Guardian readers will. We know all this, however many reports send up flares with new analyses. It’s always worse than we thought, and getting worse still. My heart sinks and my fingers freeze on the keyboard, trying to find new words to write after the past wretched 13 years. A moment of light came when temporary universal credit uplift payments during the pandemic caused a sudden fall in poverty numbers. When that was brutally snatched back, there was a ripple of shock at finding how losing just that £20 a week tipped so many straight over the edge.
You can rant, along with me, about the brutes who have done all this – and at the (mercifully shrinking) number of Tory core voters, who clamour for more of the same. You can ponder how ministers dare murmur about the abolition of inheritance tax, saving the richest 4% of estates billions that should be spent on those who need it. But what’s the point?
An election is coming – and it’s as well to remind ourselves that Blair and Brown pledged to abolish child poverty by 2020. There were a million fewer children in poverty by the time they left office, and Corlett says upcoming revised estimates will show how much nearer to halfway they got by 2010 than previously realised. (For those grumbling about too few Labour promises, every Labour government always raises the living standards of those at the bottom – this one would be no different.)
But for now, under this benighted government, Citizens Advice and the Social Market Foundation call for better social tariffs on life’s essentials. Energy, water, broadband and car insurance need universal rates of assistance all over the country for those who can’t afford them. There’s currently no deal for car insurance, so 1m households gave it up in the last year, hindering people’s ability to get to work, or even to get a job.
With broadband, a few companies have offers of packages but with differing elegibility, so only 5% of the low- paid take these up. More than 4 million people (8%) had to stop spending on mobile, broadband or insurance in 2022, leaving them isolated. Nearly 40% of those on universal credit have cut back or switched off broadband, unable to pay bills, so they have to queue at libraries (if they’ve still got one) to report their incomes to the Department for Work and Pensions each month, which can only be done online.
The next question is how these social tariffs should be structured and funded, to ensure high uptake and to end postcode lotteries. Options could include a fixed discount, not paid for by the state but by a levy on all utilities companies, a system that would work for car insurance too. Utilities companies complain some areas have many more low-income people claiming a social tariff, leaving them unfairly out of pocket. That’s why it needs government to impose pooled risk so all companies pay a levy and all offer the same vouchers.
Citizens Advice warns that half those coming to them in debt are in a negative budget: “Their bills are still more than their income, when we’ve done everything to cut their spending and lift their income,” Nicola Lyons of County Durham Citizens Advice says. They’re under so much pressure that unless the matter is urgent, there’s a three-week wait for face-to-face interviews with one of their debt or benefit advisers.
The day I spoke to her, she had just been trying to help a family in direst straits: a single mother’s three children have been sent home from their school, which is collapsing under Raac, so she’s trying to work from home. They have one laptop, one mobile phone and very weak, slow wifi, with which she has to do her job and the children their online lessons and homework. They get no free school meals now they’re home, and they can’t cover their bills and buy enough food. And there is no answer to their predicament. In the words of Martin Lewis, the great money-saving expert, when “there’s nothing left in the cupboard that I can help you with … that means it has to be a political solution”.
• Polly Toynbee is a Guardian columnist
