OXFAM warned yesterday that the ‘UK could return to inequality levels not seen since Victorian times’.
Government rhetoric about ‘making work pay’ – used to justify sweeping welfare reforms – is sounding increasingly hollow, according to a new report by Oxfam, which details how getting a job in modern Britain is no guarantee of escaping poverty.
Oxfam’s report, The Perfect Storm, documents how the government’s deficit reduction strategy, which has targeted £99 billion of budget cuts against just £29 billion of tax increases each year by the end of this parliament, is disproportionately impacting on those on the lowest incomes.
It describes a ‘perfect storm’ of factors – from increasing unemployment and lack of decent jobs, to rising living costs and falling incomes and the proposed deep cuts to welfare and public services – that are buffeting the UK’s most vulnerable citizens, both those in and out of work.
Oxfam’s Director of UK Poverty, Chris Johnes, said: ‘Despite the government’s rhetoric about making work pay, having a job is no longer necessarily enough to lift someone out of poverty; more working age adults in poverty now live in working households than in workless ones.
‘The government is justifying huge cuts to welfare support for people on low incomes by saying this will incentivise work, but there simply aren’t enough decent jobs available.’
The Perfect Storm reveals that since the start of the recession in 2008, 830,000 permanent full-time jobs have been lost while half a million part-time jobs have been created.
The number of people in temporary work because they can’t find a permanent job has risen across that period by 73 per cent, meaning there are now 1.4 million ‘frustrated part-timers’ in the UK.
There are also an estimated two million ‘vulnerable workers’; people whose work is characterised by insecurity, uncertainty over hours and low pay.
For instance, the UK has the highest number of zero hours contracts in Europe, meaning people can arrive for a day’s work only to be turned away by their employer.
One knock-on effect is that the number of people in work but having to claim Housing Benefit has more than doubled over the period to nearly 900,000.
A tightening of the eligibility rules for working tax credits also means that the average qualifying family is expected to lose £2,000 per year.