One of the most important legacies that this Labour Government could achieve would be the massive reduction in poverty and the widening of opportunities for millions of people who are currently struggling to get by.
In fact, the cost-of-living crisis is now so common a phrase you might think it were a fact of life. But poverty does not have to exist. It is a political choice.
Today, just over 14 million people live in poverty – and this overall figure has barely changed during the 14 years of austerity. This includes over 8 million working age adults, 4 million children and nearly 2 million pensioners.
Of course, it‘s easy to talk about poverty in terms of numbers, but it’s the real world impact where it really matters.
Living in poverty means not being able to heat your home, pay your rent or buy essential items like food for you and your family. It also means waking up every day facing insecurity, uncertainty and impossible decisions. At its core, poverty prevents people from playing a full and meaningful role in our society.
That is why there is both a moral and economic case for taking action and why tackling poverty should be central to any serious strategy for economic growth.
But none of this will be possible if we continue to use the same austerity driven measures of the past.
The proposal to means-test the winter fuel allowance by linking it to Pension Credit was flawed because we know that 750,000 eligible older people don’t make a claim. These are the among the poorest in our society and there was a clear failure to see the need for universalism in our welfare system.
Likewise, the attempt last year to reduce disability benefits by £7bn was not based on people’s needs – but on the Treasury’s demand for cuts. Even the very welcome and long overdue decision to lift the two-child limit, still leaves the overall benefit cap in place and fails to uprate the threshold in line with Universal Credit.
In fact, there is a wealth of evidence to show a growing gap between what people have and what people need for a decent standard of living.
Millions in the UK are falling well short of this standard as costs continue to rise and our social security system fails to provide adequate and appropriate support.
Now some have argued that our benefits system is too generous, but compared to most other countries in Europe, the rate of key UK benefits – such as unemployment benefit or the basic state pension – is incredibly low. In fact, the UK’s spending on social security has been consistently between 10% to 12% of GDP.
One of the major structural changes we need – to move beyond sticking plasters and towards lasting change is the introduction of a protected minimum floor in our social security system.
The principle is simple: if our welfare state is meant to be relied on when you need it, it’s got to cover the essentials people need to survive.
Right now, five in six low-income households on Universal Credit are going without essentials, and nearly 90% of people referred to food banks are receiving a means-tested social security payment.
Improving the support available through our social security system should therefore be seen as a key part of our economic growth agenda, but we need to recognise that growth that fails to tackle social inequality will mean that all the economic gains remain at the top. In fact, between 2010 and 2019, the UK’s GDP grew by 1.9% a year – but the wealth gap widened by nearly 50%.
There is also a genuine concern that if the government fails to tax wealth effectively, then it will lack the sufficient resources to uphold the social contract by which strong public services, an effective social safety net and a healthy economy provide people with a decent standard of living.
A failure to uphold this contract will inevitably further undermine trust in our current political system and ultimately lead to support for those with simple answers to complex questions.
Ultimately, our Labour Government will be judged on whether people feel better off. That’s our moral crusade, that’s our economic mission – that’s what we need to do.
Welfare must cover the essentials people need to survive – we need a protected minimum floor in our social security system
