Do we want to abolish relative poverty in five years? Here’s one way we could do it.
In December the Joseph Rowntree Foundation published its report UK Poverty 2017
The report states:
14 million people live in poverty in the UK – over one in five of the population. This is made up of eight million working-age adults, four million children and 1.9 million pensioners. 8 million live in families where at least one person is in work.
The question for Liberal Democrats is how can we eliminate relative poverty over the course of a five year Parliament.
The JRF report defines relative poverty as “when a family has an income of less
than 60% of median income for their family type, after housing costs”. They set out levels of income (after Income Tax, National Insurance and housing cost have been deducted) needed for different types of family units:
Family type £ per week, equivalised,
2015/16 prices
Couple with no children 248
Single with no children 144
Couple with two children aged 5 and 14 401
Single with two children aged 5 and 14 297
Source: Households Below Average Income 2015/16, table 2.2db
It is depressing to recognise that poverty among pensioners is increasing (from 13% in 2011/12 to 16% in 2015/16). In 2015/16 the Pension guarantee was set to £151.20 for single people and £230.85 for couples while the pension rates were only £115.95 (single) and £185.45 (couples). To eliminate poverty for couples we could increase the couple rate by 1.5% above the normal increase for 5 years (totally 7.73% compared to a shortfall of 7.43%)