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Close to Home : UK poverty and the economic downturn

Close to Home : UK poverty and the economic downturn

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Published by Oxfam
The UK is in recession, and things stand to get much worse for the fifth of the population already living in poverty, and for the millions more whose livelihoods will become more vulnerable as a result. The UK government has recognised its responsibility to help people through the recession, but needs to do more to help the poorest, and to provide security for all. As importantly, policy makers need to take the opportunity that the recession provides to rethink many of the policies of the past decades. This paper sets out a pro-poor policy response to the recession that lays down the foundations for a more equitable, sustainable society. It argues that government action should be based upon a long-term vision of moving to a society based on sustainability, with good quality jobs that allow people to have a more secure livelihood, but also backed up by a welfare state safety net which neither traps people nor leaves them living in poverty.
The UK is in recession, and things stand to get much worse for the fifth of the population already living in poverty, and for the millions more whose livelihoods will become more vulnerable as a result. The UK government has recognised its responsibility to help people through the recession, but needs to do more to help the poorest, and to provide security for all. As importantly, policy makers need to take the opportunity that the recession provides to rethink many of the policies of the past decades. This paper sets out a pro-poor policy response to the recession that lays down the foundations for a more equitable, sustainable society. It argues that government action should be based upon a long-term vision of moving to a society based on sustainability, with good quality jobs that allow people to have a more secure livelihood, but also backed up by a welfare state safety net which neither traps people nor leaves them living in poverty.

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Published by: Oxfam on Apr 12, 2011
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02/19/2013

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Oxfam GB Briefing Paper
Close to Home
UK poverty and the economic downturn
Jean Smith outside the factory where she used to work. © Chris Worrall/Oxfam
The UK is in recession, and things stand to get much worsefor the fifth of the population already living in poverty, andfor the millions more whose livelihoods will become morevulnerable as a result. The UK government has recognisedits responsibility to help people through the recession, butneeds to do more to help the poorest, and to providesecurity for all. As importantly, policy makers need to takethe opportunity that the recession provides to rethinkmany of the policies of the past decades. This paper setsout a pro-poor policy response to the recession that laysdown the foundations for a more equitable, sustainablesociety.
 
Summary
Introduction: challenges andopportunities
The major social policy challenge of the current economicrecession is how to prevent a precipitous rise in poverty in theUK. In addition to limiting the numbers of people plunged intopoverty because of the recession, government must also mitigatethe impact on people already living below the poverty line. But,this paper will argue, responses to the recession present anopportunity to make a step-change, ensuring that actions takenalso help build a fairer, more sustainable society in which povertyis ended in the long-term.
Analysis: the recession and poverty
The UK is now in recession, which is likely to continue at leastinto 2010. Unemployment is already at the highest level for 11years, and may reach three million or more in the next two years.House repossessions are rising. People in poverty have been hitparticularly hard by recent cost of living rises, with incomes –both benefits and wages for the low paid – failing to keep pace.We are seeing recent reductions in some forms of povertyreverse.Recession leads to a number of risks to the livelihoods of those inand vulnerable to poverty. It is clear that redundancies and lowbenefit levels will lead to hardship. We also fear an increase inexploitation and vulnerable employment. There is also aparticular risk that, as in previous recessions, the immediatedamage caused to people’s lives can lead to the scarring of livesand communities and to long-term unemployment. This makes itespecially important that government does not give in to thetemptation to balance budgets by cutting back on essential publicservices and protection just as they are most needed.
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Recommendations
Government action should be based upon a long-term vision ofmoving to a society based on sustainability, with good qualityjobs that allow people to have a more secure livelihood, but alsobacked up by a welfare state safety net which neither trapspeople nor leaves them living in poverty. We need a people’s bailout that provides not just immediate relief, but builds towardsthis long-term vision.
Make the tax system more progressive, including byincreasing the threshold at which income tax is paid andlowering tax and benefit tapers.
Invest in infrastructure, including a comprehensive energyefficiency programme, an expansion of free, high qualitychildcare and social care and a social house buildingprogramme.
Introduce an emergency increase in out-of-work benefits andtax credits.
Put further welfare reform on hold, and renew the welfarestate so it becomes a genuine safety net for all.
Effectively enforce existing employment rights.
Set a maximum level of interest and widen eligibility for socialfund hardship loans
Give more help to struggling homeowners and private tenants.
Redouble government’s commitment to equality, anti-discrimination and community cohesion.
 
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