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Poverty street for more young and old

Life for children and pensioners is getting worse under New Labour. Figures published yesterday show that 22.7% of children and 23% of pensioners are living in poverty and that the numbers are rising at both ends of life. After two successive years in which child and pensioner poverty have grown, 3.9 million children and 2.5 million pensioners are living on incomes below the minimum required for a reasonable standard of living.

Poverty is not only to do with unemployment or the low level of state benefits, but is also linked to the level of wages for the lowest paid. In the majority of households where children are living in poverty there is at least one working adult. Only in new member states of Eastern Europe and the poorest countries such as Greece and Portugal, are single parents at greater risk of poverty than in the United Kingdom.

And exactly the same is true of pensioners, where Britain spends just 5.5% of economic wealth on pensions, compared for example to 12.1% in France and 10.5% in Denmark. Whilst more pensioners are being forced to cut back on food, the government is sitting on £5 billion in unclaimed benefits. Because so much of what older people are entitled to is means tested or available only after complicated form-filling, people don’t know they are entitled or how to claim.

Age Concern is justifiably angry at the government’s attitude to older people. Director-general Gordon Lishman said: “The current measures to help pensioners are clearly falling pitifully short of the mark. The government must take urgent and decisive action to prevent more pensioners being pushed into poverty. The state pension should be increased to £124 a week and should be re-linked to earnings as soon as possible, the Winter Fuel Payment should be raised, and much more must be done to get benefits cash to those who need it.” According to a coalition of charities, up to 5.5 million households, including all pensioners and families on the most basic benefits, will struggle to heat their homes by the end of the year as fuel prices rocket.

Now the housing crisis is set to hit pensioners too. Many have subsidised their low incomes by remortgaging their homes. Currently 29% of people aged 70 or over still have mortgage payments to make and 23% of those have seen an increase in mortgage debt from this time last year. The average mortgage debt of the over-70s is currently over £45,000. The debt charity, the Consumer Credit Counselling Service, reports a huge increase in the number of over-60s seeking advice and even being pushed into bankruptcy over the past year.

Brendan Barber, the TUC's general secretary, said the child poverty figures were “disappointing” – a pathetic response from a man who is supposed to represent the interests of working people. He said nothing about the growing economic crisis, the impact of inflation, or that New Labour’s economic disaster is already leading to a growth in unemployment, with the poorest people in the most insecure, part-time, employment being the first to go. Nor did he mention poverty pay, or offer to lead any kind of a fight for these children, families and pensioners.

Because we live in a globalised economy, with production concentrated in the hands of a few transnational corporations, the ability of the state to collect tax (apart from individuals) and to use it to fund welfare and benefits is severely reduced. In any case, Britain’s corporation tax at just 28%, is the lowest of all the major economies.

The TUC recognises this but, along with New Labour, they see no alternative to allowing the market to run its course. But the same market is destroying millions of people's lives and livelihoods. So an alternative must be found, which removes control from self-interested profit-driven corporations and places it in the hands of democratically-elected local and national bodies.

Penny Cole
11 June 2008

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