Socialist Worker

London's children: 53% on breadline

Issue No. 1828

CHANCELLOR Gordon Brown constantly argues that the government has made major inroads into tackling child and pensioner poverty. Both claims were demolished by shocking studies published last week.

A report commissioned by the mayor of London's office revealed the almost Dickensian gulf between rich and poor in the heart of the capital city. Inner London, home to three million people, has the most millionaires of anywhere in Britain.

Yet alongside this huge wealth over half of all children in inner London live in poverty. The study exposed a shocking picture of child poverty right across Britain. It uses the government's definition of child poverty - households with disposable incomes below 60 percent of the national average. On that measure 31 percent of children in Britain, almost one in three, live in poverty.

In some areas things are even worse. The north east of England has 37 percent of children living in poverty, Wales 33 percent, and the West Midlands 37 percent. But the greatest poverty is cheek by jowl with the immense wealth in the heart of the capital.

Across Greater London as a whole 41 percent of children live in poverty, and the figure rises to 53 percent in inner London. National figures show how the scourge of poverty has blighted millions of children's lives over the five years since New Labour came to office. The London figures are boosted by two key factors.

One is the spiralling cost of housing in the capital. A second factor is the enormous pool of unemployment. Many of those in poverty are working in low paid jobs. The study found that 40 percent of children in poverty live in households where at least one person is working.

But last week's report also revealed that inner London now has the highest unemployment rate of any of the 'regions' which official figures cover. Even on distorted official measures the unemployment rate is 9.5 percent, rising to 16 percent in some areas of inner London like Hackney. These statistics give the lie to another of New Labour's claims - that it has made childcare available and affordable for all.

Unemployment in the capital was sharpest among women between the ages of 30 and 45, and this was linked to the lack of affordable childcare. Schemes like the government's Working Families Tax Credit are woefully inadequate and cannot make a real difference.

The study showed that a lone parent in London moving from benefit to a job paying £250 a week will, after meeting average childcare costs, be only £20 a week better off. A weekly travelcard in London costs that much! Once you add other expenses from going to work, this means people can be worse off than when not working.

Another key New Labour claim is that they have begun to tackle pensioner poverty. That too was challenged by a report from the charity Age Concern last week. This study showed that, thanks to means testing and the complex pensions system, half of all pensioners in Britain do not have a decent standard of life.

One in four pensioners live below the poverty line nationally, with inner London again seeing the highest level of pensioner poverty at 36 percent. 'Our pensions system simply isn't working,' says Age Concern. 'Too many older people today are not reaching decent incomes in retirement, and the position for future pensioners is uncertain.' Things are set to get worse thanks to the government's drive to extend means testing, says the charity.

The stigma many people feel about means testing coupled with what Age Concern labels the 'mind-numbing complexity' of the system already means pensioners don't claim £1.9 billion a year they could be entitled to.

Up to a third of pensioners now entitled to the means tested 'minimum income guarantee' don't get it, and a third of pensioners entitled to council tax benefit don't get that.

Age Concern rightly argued that tackling pensioner poverty would not be done by yet more means testing. Instead it insisted what was needed was the simple and effective step that New Labour refuses to take - a serious increase in the basic state pension.


The 'serious problem' of record household debt

ONE REFLECTION of the poverty that blights lives across Britain is the soaring level of debt. People, many with poorly paid jobs, just manage to keep their noses above water by taking on more and more debt which they can't afford.

And this is when the economy, according to New Labour, is doing well. Household debt in Britain has hit a record £801 billion, according to a study reported in the Financial Times business paper last week. In the last year household debt has leapt by 13.1 percent, the fastest annual rise since the Bank of England began recording such figures.

The Bank of England itself worried last week that 'the larger the build-up of household debt, the greater the risk of a sharp correction'. Last week's report showed that over a third of the poorest people in Britain have debts averaging £3,337.

Over 70 percent of people aged between 30 and 34, mostly people with jobs, have debts averaging £5,301. Another study, by academics at Nottingham University, reported last week that half of people in low paid jobs or on benefits had debts.

This is the reality of Gordon Brown's 'prudent' stewardship of the economy. Even the Financial Times panics that the debt bubble could burst and cause serious problems for the whole economy.

It ran a front page headline 'Fears Rise Over Debt Level Of Poor' last week. Of course, the rich and business elite who the paper is aimed at would not countenance the real answer to poverty - pay higher wages and tax the rich to fund it.

Nevertheless, the paper worried, 'That so many people are struggling with debt suggests serious problems are likely if the economy deteriorates.'


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Features
Sat 30 Nov 2002, 00:00 GMT
Issue No. 1828
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