Another world is possible…

Hope and optimismHope and optimism in spite of present difficulties…

A week on from the General Election and we’re all still adjusting to the new and unexpected reality of a majority Conservative Government. What are our sources of hope and optimism, and what have we to offer to the millions of ordinary people even now struggling to make ends meet?

What are we to make of the £12 billion cuts to benefits?

First, the bad news. Whatever your view on the Election result itself, anyone with an interest in tackling poverty must surely be concerned at the new Government’s commitment to cut a further £12 billion from the benefits budget. Given that pensions are explicitly excluded, this amounts to a cut of roughly ten percent of the budget for working age households – or, as the Lib Dems calculated, a cut of £1,500 a year from the incomes of eight million families.

How will the Government make these cuts? Do they even intend to do so? Which benefits will be cut? Who will be affected and who spared? The problem at the moment is that no one knows. Not even, apparently, the Government itself.

In spite of intense pressure to spell out how they would make such dramatic cuts, the Prime Minister refused to give any details. And Iain Duncan Smith, now reinstalled as Secretary of State for Work and Pensions, explicitly stated that no decisions have yet been made as to where the cuts will fall.

Troublingly, since last Thursday, there has been press speculation that the Conservatives never actually expected that they would have to make £12 billion of cuts. As Conservative commentator Tim Montgomerie argues in the Times today:

“If the Tories got back into No 10 they expected to trade away most of the “right-wing” policies in coalition negotiations. I’m particularly thinking of the housing association right-to-buy, £12 billion of welfare cuts, slashing of inheritance tax and the introduction of a British Bill of Rights. They’re now stuck with them.”

Whither One Nation Conservatism?

On a more optimistic note, since the Election, the Prime Minister has sought to re-assert his commitment to One Nation and Compassionate Conservatism. According to Fraser Nelson of the Spectator:

“One Nation Toryism now whispers: ‘Finish Universal Credit! Tear up the old welfare system that trapped so many! Make sure work pays far more for those at the bottom’. One Nation Toryism now means thinking urgently about why so many have been left behind by this economic recovery, and what can be done for them.”

But not a mention from Fraser as to how that can be squared with loping ten percent of the benefits budget – which props up the incomes of people in low paid work, just as much as those with no work.

Tim Montgomerie, co-founder amongst other things of the Centre for Social Justice – and a powerful advocate of Compassionate Conservatism – argues that David Cameron is to become a truly one nation prime minister he will also have to exercise the freedom given to him by virtue of the fact that he has fought his last general election:

“I hope he exercises it on behalf of the unpropertied and those famous hard-working families who can’t afford further cuts to their benefits. But would the parliamentary Tory party let him? I hope we’ll get the chance to find out.”

Many of us are scared

In the meantime, many are scared at the prospects of a Conservative government, now unfettered by the ‘moderating influence’ of a centre-ground coalition partner. As Rev Mike Walsh has powerfully articulated, in his open letter to the Prime Minister (now shared by more than 100,000 people on social media):

“Many of us are scared. Scared of what your policies will do to our communities and families. Scared of what will happen to our health service and our schools. Scared of losing our family homes for the sake of a few quid saving from the bedroom tax, or not being able to heat our home and have enough left to buy food.

I don’t disagree with you that the best way out of poverty is to work, nor do I think that people should get something for nothing and expect the tax-payer to support people indefinitely if they are able to work. Who would think that that was ok and fair?

But your party’s policies on these issues, couched in terms of reducing the deficit and balancing the books, don’t seem to take into account the social and human cost of such actions.”

So where can we find sources of hope in spite of present difficulties?

What are the hopes, visions and narratives which will connect and inspire people? What stories do we need to tell to convince people that another world is possible, and that they can play a part in bringing it about?

Hearing the cry of the poor: A community of faith?

Can we find hope as a community of faith, committed to living out God’s bias to the Poor? The narratives of liberation theology, biblically rooted (as in the Poverty and Social Justice Bible): As a Christian it is right, and our duty, to speak up for the poorest and most vulnerable – whether or not this changes anything. Prophetic naming of injustice is itself an act of faith and discipleship.

These are the values embodied and embedded in what Church Action on Poverty is and what it does – but are shared much more widely amongst the community of faith that is the Church. In a society which has seemingly lost its moral compass, can we become be a beacon for an alternative set of values?

Speaking truth to power: A community of witness?

Can we find hope as a community of witness? Can we offer a voice to those who are normally voiceless and marginalised: That this is both an intrinsically valuable thing in itself, and a challenge both to our ‘normal’ understanding of the world and of powerholders in church and wider society.

Speaking truth to power: Both in the sense of giving a voice to people in poverty, and through campaigns, challenging politicians to think and act differently. Even if no policy change is achieved, this ‘act of witness’ is intrinsically valuable.

In some ways, the more these values are resisted, the stronger the appeal becomes. To be bound together by presenting a counter-cultural challenge to the powers of the world is a strong bonding force. Prophetic statements and actions, can be powerful means of rallying people to a cause – ‘huddling together’ when the world appears to be against you. Many religious communities have long traditions of surviving periods of exile/persecution through collective acts of solidarity/resistance.

Change Agents: A community of change?

But can we inspire hope that real change is possible? Are we brave enough to offer an invitation to become part of an inspired and inspiring community of people, gathered together and resourced, to bring about positive change in our own churches, communities and more widely, to achieve transformational change at personal, local and national levels?

What would it take for Church Action on Poverty – or, indeed, the Church in its widest sense – to become not just a community of faith, witness and solidarity, but a community of change agents? A community which seeks to embody the change we want to bring about? A community which offers hope and inspiration to its members, the church and the wider community?

For change to come, it is first us that we need to change. Can we ‘be the change’ we want to bring about? Can we overcome the ‘learned powerlessness’ which would have us believe deep down that change isn’t possible? Or that, even if change is possible, it is because of the actions of someone else – but not mine.

Recovering prophetic imagination

As times get harder, do we have a vision of developing a much stronger identity as a community of faith and witness which is consciously counter-cultural to the prevailing spirit of individualism and consumerism? Is there a way of doing this which at the same time enlists the middle class to the cause of tackling poverty and inequality?

In the face of a many reasons for pessimistic, is this the time to reengage with the task of ‘prophetic imagination’? Can we more consciously and explicitly draw on the traditions of faith and the sources of inspiration to create and live out new narratives of hope and optimism in spite of present difficulties?

Can we live up to the challenge of living and acting as if another world is possible?

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Dogs that don’t bark in the night, middle class welfare and other Election heresies…

heresyI am always interested in the issues that don’t appear in Election debates, and the questions which politicians chose not to ask. Take, for example, the issue of middle class welfare…

As I write this the outcome of the General Election is far from clear. So, if a Green/SNP/Plaid Cymru coalition sweeps to power on 8th May on a joint pledge to abolish inequality within 100 days, you can safely ignore everything below. Failing that…

Even before the election campaign proper got started, the Churches were simultaneously under attack and praised for speaking out in favour of the ‘Common Good.’   “Get your noses out of politics”, was the familiar refrain from some quarters.  But in the words of Archbishop John Sentamu

“For Jesus, the head of Caesar may be on the coin, but all things belong to God. So giving must be first to the Lord and Caesar may get what God permits Caesar to take! To suggest that some areas of life are off-limits for the Almighty is at best ignorant and at worst heretical.”

That said, there do still seem to be some topics which remain heretical even for the churches to discuss.

We’re all too aware that the benefits bill is apparently “out of control.”   Politicians and newspapers have been telling us this for years. But who would have known that almost half of the ‘benefits bill’ is actually goes to pensioners, and that unemployment benefits spent on the so called ‘shirkers’ account for less than 2 ½ pence in every pound of welfare spending?

middle classBut what about middle class welfare?

Unless I’ve missed it, politicians, political commentators and newspaper proprietors haven’t been jumping up and down about the billions spent each year on subsidising the lives of those who already have it good.

If you earn enough to be a higher rate taxpayer (that’s over £42,000), you are eligible for ‘higher rate pension tax relief.’ In simple terms, that means that if you save £100 into a pension, you only have to pay in £60 and the Government puts in the other £40. If you are an ordinary rate taxpayer, you have to put in £80 to save £100 – and if you’re don’t earn enough to pay tax, then you have to put the full £100 in to save £100. This tax loophole for the relatively wealthy costs the rest of us £7 billion a year – more than the total cost of benefits paid to the unemployed.

Then there is Housing Benefit – allegedly a benefit for ‘the poor’ – and one of the fastest growing areas of the benefits bill. In fact, £9 billion of Housing Benefit is now paid out directly into the pockets of private landlords. Many are respectable, to be sure, but plenty have been taking advantage of booming house prices by pushing up rents to sky high levels – and effectively profiteering at the taxpayers expense.

And just in case your smugly sitting there thinking ‘none of this applies to me’ – if you are a homeowner, you too (and yes, me too) benefit from middle class welfare, in the form of completely untaxed – and unearned – earnings from the growth in house prices.   Even in the middle of the worst recession for more than seventy years, the ‘value’ of housing has continued to increase in many parts of the country. In London alone, house prices are now more than 40% higher than they were in 2008 – up over 13% in the last year – to an average of £464,000. In simple terms, this means that every homeowner in London is now on average £180,000 wealthier than at the start of the economic crisis. And of course, those lucky enough to own more expensive properties will have seen the value of their properties increase by much greater amounts.

So never mind taxing the windfall house-prices-up2profits of the energy companies, what about taxing the windfall profits of homeowners, who have seen gains of hundreds of thousands of pounds over the exact same period that others have seen their real incomes and benefits squeezed?

In case any of you shriek – how could I possibly pay that – you would only pay the tax at the point when you sell the property and realise the gain. It’s a simple tax, its called capital gains tax, and it already exists on second properties. So why not on people’s first homes?   It’s a tax that would, in all likelihood, raise billions of pounds a year, and do away with the need for any further cuts in the ‘welfare’ budget.

But it would, of course, offend the millions of ‘hard working’ homeowners, whose votes the political parties are seeking to sway.

So, who now is for the Common Good?

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SNP annexation of Manchester welcome

Today’s surprise announcement from Nicola Sturgeon that, in the event of the SNP they would seek to nego

tiate for Manchester to be annexed to Scotland is welcome news for all Mancunians.

Manchester has been under the yolk of Westminster for far too long, its high time we joined with our Northern neighbours in a Greater Celtic Powerhouse.

As part of the deal, Ms Sturgeon proposed to move the production of Iron Bru to Salford, and opening at least three whiskey distilleries bringing an immediate 200 extra jobs to the region.

In other good news in an increasingly unpredictable Election campaign: Ed Balls promised to reintroduce an 85% top rate tax, the Lib Dems confirmed rumours of a new Palace Bedroom Tax, on all domestic palaces with more than 50 spare bedrooms, and George Osborne revealed plans to close down the biggest 10 global Tax Havens – starting with the City of London.

It’s only April 1, and the General Election campaign is already starting to get interesting. Who would believe it?

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A Good Society (1) – A Question of Aspiration

niallcooper:

Interesting reflections on the Good Society theme from Sheffield…

Originally posted on PXI - Reflections on the Cross:

Gill Dascombe and Gill Newton visiting PXI Gill Dascombe and Gill Newton on their visit to PXI

This weekend PXI welcomed visitors from the wider Methodist Church. Gill Dascombe (Vice President of Conference) and Gill Newton (Chair of District) spent a busy Saturday with us, sampling the Space to Grow and Quiet Space activities at Yew Lane, before moving on the Mount Tabor and a discussion about “What Makes a Good Society?”.

The twenty or so of us who took part in the discussions about A Good Society spent time exploring and answering questions like:

  • What would A Good Society look like in 2020?
  • What single change would you make to help make A Good Society?
  • What could you do in order to “be the change you want to see?”

Big questions for a group with ages ranging from under eleven to sixty plus – but from the conversations we discovered some really interesting things about…

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Drowning in Debt: MPs back call to end the rent-to-own rip-off

Originally posted on A Fair Say:

Drowning in DebtThe All Party Parliamentary Group on debt and personal finance has today called on the Financial Conduct Authority to launch an investigation into the so called ‘Rent-to-own’ market, dominated by Brighthouse and Perfecthomes.  Not before time.

In September 2013, Church Action on Poverty published the findings of our own investigation into the ‘Rent to Own’ market, which revealed that since the financial crisis in 2007 it has been boom times for the likes of Brighthouse.

The rent-to-own (RTO) sector has more than doubled its pre-tax profits over the last three years,from £9.83 million to £19.7million, by selling basic appliances, furniture, and white goods to hard-up families at inflated prices and sky high interest rates.
In 2013 we highlighted the example of a six-seater sofa from Sofaland which cost £660 – compared with £2,113 for an equivalent item from BrightHouse.  Add on BrightHouse’s 64.7% interest, and this sofa ends…

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Tackling Tax Dodging: A 2020 Vision of the Good Society…

TDBlargeIf I asked you to share your hope and vision for 2020 what would it be? A land flowing with milk and honey? A shimmering city set on a hill? These may have worked for the old testament prophets, but what can we realistically hope for in what can seem like a hopelessly divided and fallen world?

Add your voice to the Tax Dodging Bill campaign here

The global economy frequently appears to lack a clear moral dimension. Whilst it has generated great wealth, this has been at the expense of also creating growing inequality.

Oxfam reminded the World Economic Forum in January, the richest one percent of the world’s population are on track to have amassed more wealth than the remaining 99% in just two years’ time.

As the Church of Scotland’s report on the Purposes of Economic Activity concluded back in 2012,

“For many years we have been creating an economy where the dominant values are greed and fear. It is an economy in which the weak and the vulnerable suffer disproportionately and where non-renewable natural resources are squandered. We need to re-think what kind of people we want to be and what kind of society we want to live in.”

So is it realistic to dream of an economy that is in service to every human being irrespective of their wealth or the market value of their labour? And if we are to have such dreams, how can we possibly start to turn them into reality?

It is precisely for this reason that a number of Christian agencies and Church leaders have thrown their weight behind a new campaign to persuade political parties to get serious about tackling tax dodging if they get elected in May.

Tax dodging by wealthy individuals and corporations is estimated to cost the UK at least £60 billion a year, and the world’s poorest countries an estimated $160 billion – more than the entire global aid budget. People have witnessed exposé after exposé of large multinational companies and wealthy individuals dodging their basic civic duty to pay their fair share of tax. As a result, those least culpable are hit hardest by declining public services and living standards.

Tackling tax dodging won’t bring forth a land flowing with milk and honey (well, not by 2020 at least), but it would go some way to preventing the rich concealing their wealth from tax authorities – whether in the UK or in the global South – and re-balancing the economy in favour of poorer communities the world over.

As a group of church leaders said at the launch of the Tax Dodging Act campaign in January:

Paying tax reflects our commitment to the society in which we live and work. It also provides the funding for good social services and infrastructure. Spent well, taxes provide a common insurance and make society fairer and more secure. People matter more than profits but every year, billions of pounds are lost through corporate tax dodging. The law needs to change so that the loopholes which allow big corporations to avoid paying their fair share of tax can be closed. We urge each of the UK’s political parties to make a commitment to introduce legislation within the first 100 days of the new parliament, to bring the law into line with people’s expectations.”

More than eight in ten of British adults regard tax avoidance by large companies as ‘morally wrong, even if it is legal’, according to a ComRes poll for Christian Aid in November 2014. Almost as many told pollsters it was important to them that ‘large UK companies pay their fair share of tax in developing countries in which they operate’.

We need a Tax Dodging Bill to tackle corporate tax dodging, and to make tax fair. The potential benefits are huge. It is estimated that the Tax Dodging Bill could generate at least £3.6 billion more a year in tax to fight poverty in the UK, and at the same time redirect potentially billions towards tackling poverty in the world’s poorer countries.

A 2020 Vision of the Good Society if ever there was one…

Read more about the 2020 Vision of the Good Society at www.churcheselection.org.uk

tax-dodging-billWe’re calling for a law that will:

  • Make it harder for big companies to dodge UK taxes and ensure they’re not getting unfair tax breaks
  • Ensure UK tax rules don’t encourage big companies to avoid tax in developing countries
  • Make the UK tax regime more transparent and tougher on tax dodging.

Add your voice to the Tax Dodging Bill campaign at: http://taxdodgingbill.org.uk/#signup

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A Good news General Election?

Four months to the day elections1from the General Election, how do we respond to Jesus’ challenge in 2015 Britain?

When Jesus began his ministry, he announced that he had come to bring good news to the poor and to proclaim the year of the Lord, the year of Jubilee when wealth will be redistributed (Luke 4:18, 19). Jesus spent most of his time among the poorest of the land, teaching, healing and restoring them to full inclusion in their community. Jesus directly confronted the economic inequality of his day.

One of the most refreshing things about Pope Francis is the way in which he has placed this message at the centre of his ministry:

“Christians are called to confront the poverty of our brothers and sisters, to touch it, to make it our own and to take practical steps to alleviate it.”

What are the inequalities we need to confront today? But more than that, do we have a vision of the kind of ‘Good Society’ we would want to live in, and help to bring about? In a world characterised by increasing individualism, can we find ways of reconciling our own interests with those of others, within a broader vision of the ‘Good Society? In what ways is our quality of life connected together, or our wellbeing and happiness connected with that of others? What connects poverty in the UK and in the ‘global south?’ What are we to make of the growth of food poverty and hunger on our own doorstep? How can we listen to and amplify the voices and stories of those directly affected by the myths and stigma associated with poverty?

Whatever answers we may come up with, is it not worth debating such fundamental issues – issues which take us far beyond mere party politics to the very foundations upon which our society is built?

Can we build a Good Society together in 2015?

If you haven’t already done so, why not download the resources to reflect on these issues on Church Action on Poverty Sunday – 15 February 2015?

Niall Cooper
Director
Church Action on Poverty

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The Safety Net: In urgent need of repair

A functioning safety net not food handouts is the true long-term solution to food poverty and hunger.

Today’s Feeding Britain report has again highlighted the role of benefit delays and sanctions in creating food poverty and hunger. But the scale of the problem is much greater than even Feeding Britain admits to. For far, far too many people, far from providing security against hunger, the ‘Welfare Safety net’ is itself a contributory factor in creating insecurity and destitution. The Welfare Safety net is in urgent need of repair.

Whilst the Feeding Britain initiative is welcome, it must itself only be a short term response. Food handouts surely cannot be a long-term response to the problem of food poverty and hunger in the sixth wealthiest nation on the planet. Even in the so-called ‘developing world’ mass feeding programmes and food aid is only ever seen as a short term emergency response.

The test of the next Government (if not of the current one), is not whether it is effective at enabling its citizens to be fed with surplus food handouts, but whether it has reduced the need for people to turn to food handouts in the first place. For this to be a reality, what people need more than anything else is a fully functioning welfare safety net.

As the recent Emergency Use Only report from Oxfam and others showed, the principle reason for people turning to foodbanks is a sudden loss or drop in income. Sadly, whilst the benefits system was originally designed to cushion people from such shocks, and prevent a drop in income leading to destitution, the current reality is somewhat different.

Most people continue to believe that the Welfare State provides a safety net when you fall on hard times. Yet for literally millions of people, the experience is quite different.

For a variety of reasons – bureaucratic, administrative and policy – increasing numbers of people are being left out of pocket – or literally destitute.

Whilst recognising that benefits are never on their own going to solve poverty (and almost certainly aren’t going to be increased in the current political or economic climate), it is surely not unreasonable to expect the benefits system to prevent people quite literally going hungry?

Below is a list of 15 holes in the Welfare Safety net which currently leave significant numbers of people at serious risk of destitution. These holes urgently need to be plugged.

Worryingly, although the numbers affected run into hundreds of thousands (or in the case over delays in assessment of eligibility for Personal Independence Payments, 1.7 million people), there are numerous holes for which no reliable research or data exists.

Type of hole Why does this come about Numbers affected
Delays in assessment of PIPs Sixth month delays in assessments for Personal Independence Payments. PIP is also a passport to other benefits, therefore delays mean that some claimants are also missing out on other benefits. 1.7 million people previously on DLA
Delays in assessment for ESA People waiting for assessments for employment and support allowance (ESA). Delays and wrong decisions in Atos’s work conducting controversial fitness-to-work assessments have caused distress to vulnerable people. 712,000, including 394,000 new claimants, 234,000 ESA recipients whose reassessments have been delayed, 84,000 still on incapacity benefit yet to be moved to ESA.
Transition between ESA and JSA Gap between being refused ESA and being able to claim JSA – made worse by the fact that you can’t start a JSA claim until you are judged to be eligible for work, and Advisors who turn down ESA claims are not required to advise a fresh JSA claim 249,000 previously on ESA had been assessed as fit for work by Sept 2013. No stats currently available on how many have subsequently claimed JSA or how long without money in meantime.
Loss of JSA or ESA benefit due to sanction Increasingly routine use of sanctions to deprive JSA (and ESA) claimants of any income for up to 3 months (or even 3 years) at a time. Undue pressure on Jobcentre staff to sanction, and some evidence of harassment to withdraw appeals. Over a third of all decisions were to close the JSA claim completely because the claimant judged to be not actively seeking work. 871,000 JSA sanctions during 2013 – up around fourfold since 2006. 4,500 people in Greater Manchester alone had JSA sanctions of at least 3 months from Oct 12 – Dec 13.
Underpayment of benefits Underpayment of benefits has increased by £600m since 2005/6 to £1.6billion, including payments of Income support, JSA, Pensioner Credit and Housing Benefit Not identified. Total loss £1.6 billion in 2012/13
Extended waiting time before applying for JSA Extension of ‘waiting days’ before it is possible to claim JSA from 3 to 7 days, and further time lag to receiving payment All new JSA claimants from April 2014 (check date)
Administrative delay in receipt of JSA DWP does not publish official targets for processing benefit claims, but DWP business plan suggests that 90% of JSA claims and 85% of ESA claims should be cleared within 16 days. Not clear if this takes account of delays due to either claimant error or requests for further information to substantiate a claim. Unidentified numbers of new JSA and ESA claimants.
Time lag in payment of Universal Credit Most claimants will have to wait up to six weeks to receive their first Universal Credit payment, as a result of the extended waiting period and UC being paid monthly in arrears. Potentially all new Universal Credit claimants
Knock on loss of benefits and risk of homelessness Housing Benefit payments stopped as a result of Benefit Sanctions – immediately causing rent arrears and risk of eviction No stats on numbers affected, nor on numbers made homeless as result
Suspension of benefits Routine suspension of benefits by BA staff while potential fraud etc is investigated – no presumption of innocence until proven guilty…
STBA (waiting for benefits) Short term benefit advance payments not applied for or received when they should have been Any stats on numbers potentially eligible v nos who actually claim?
Hardship payments (sanctioned) Hardship payments for people sanctioned not applied for or received when they should have been No statistics available
ESA ‘mandatory reconsideration’ If you think ESA assessment is wrong, there is no automatic payment of ESA during first internal reconsideration Possible stats on numbers and lengths of time for reconsideration?
Tax Credits Difficult to get mistakes rectified, back-payment not until end of financial year, no emergency payments to cover losses Possible stats on underpayments, back payments etc?
Local Welfare Assistance Schemes Since the abolition of the Social Fund, welfare assistance has been localised to local authorities – but it is unclear how effective many local schemes are in preventing a need for short term assistance turning into a crisis – or whether the Local Welfare Assistance Schemes will survive the next round of Government cuts. Where then will people turn when their cooker breaks? Potential to compare numbers assisted in last year of Social Fund with nos helped under LWAS (though are any central figures collected?)
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Feeding Britain

Commenting on the publication of the All Party Parliamentary Inquiry into Food Poverty and Hunger today, Director of Church Action on Poverty, Niall Cooper said:

Frank Field, Bishop Tim Thornton and the Inquiry team are to be congratulated for a serious and thorough examination of the underlying reasons for the huge growth in food poverty and hunger in recent years.

Our call for a Parliamentary Inquiry in the Walking the Breadline report back in May 2013 has been vindicated. The report confirms what people have been telling for the past 18 months: There is a very real crisis of food poverty and hunger across the UK, the like of which we have not seen in most of our lifetimes, and never expected to see in what is still one of the wealthiest countries on the planet.

This issue of ensuring all our citizens are fed transcends party politics. It is not an issue of left or right, but of basic humanity. It is now time for both Government and Opposition to go beyond scoring political points, and to take seriously the question of how we as a nation ensure that no one need go to bed hungry.

It is no longer possible to deny the scale of the problem, nor the many and complex reasons for it – including chronic low pay, benefit problems and benefit sanctions.

The Parliamentary Inquiry makes many serious recommendations, and it is encumbant on politicians to come up with a serious response.

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To heat or eat?

fuel-povertyAdvent may be a time of hope and expectation – but it is also for many a time of dread. As the thermometer starts to plummet, increasing numbers of people are faced with the unenviable ‘choice:’ To heat or eat?  

For some, this is quite literally, a matter of life and death.

In the freezing weather of 2012, 31,000 people in the UK died unnecessarily – 10,000 due to cold homes.

The increasing cost of energy in the UK has regularly hit the headlines over recent years. Combined with the economic downturn, cuts to benefits, and lower wages, rising prices have contributed to a significant increase in fuel poverty. People are unable to adequately heat their homes; they have to make the choice whether to heat their homes or put food on the table, and in some cases they can’t afford to pay for the energy it would take to cook their food.

Living in a cold home affects children’s educational attainment, emotional wellbeing, and resilience. In adults, it increases the risk of heart attacks and strokes; exacerbates colds, flu, rheumatism and arthritis, and severely undercuts mental health. Social isolation is increased (you can’t invite friends back to a home like a fridge), and elderly people are particularly vulnerable. It’s not a small problem either: almost 4 million households in the UK are in fuel poverty.

Take Jamie and Karen from Manchester. Both struggle with health problems, as does one of their three young children. They have prepayment meters for both gas and electricity, and spend at least £40 a week on energy. They made enquiries about having their expensive prepayment meters removed, but failed the credit check required by fuel companies. They have also built up arrears on their energy account well in excess of £500, which also prevents them from switching to another energy supplier and a cheaper tariff.

One in six energy customers pay for their energy via a prepayment meter – and pay over the odds for doing so. Households with prepayment meters pay on average £253 more per year than those who pay by direct debit.   This is the reality of the ‘Poverty Premium’: The basic injustice that those with the least end up being charged the most for many essential goods and services – not just energy, but insurance, furniture and household goods – and for access to money (credit) itself.

Save the Children estimate that the Poverty Premium paid by low-income households can be as much as £1,280 a year.

This is an expense that Jamie and Karen – and thousands like them – cannot ill afford to pay.

ebicoIn 1988, two Christians, scandalised by the Poverty Premium founded a not-for-profit energy supply company, Ebico (www.ebico.org.uk). Unlike every other energy company, Ebico charges the same price to everybody regardless of whether they pay by prepayment meter or direct debit. Ebico also has no standing charge for both gas and electricity throughout Britain, and this significantly reduces the bills of low-use customers.

Over the next two years Church Action on Poverty will be exploring other practical ways of reducing the Poverty Premium in relation to food, fuel or finance. If these costs could be reduced by even £10 a week, it would make a huge difference to household budgets calculated to the last penny.

Meanwhile, as you look expectantly forward to a tasty roast turkey (or a healthy nut roast) in a warm and toasty home this Christmas, remember those who struggle to afford either.

Food, fuel and finance: Tackling the Poverty Premium is published by Church Action on Poverty in conjunction with the Iona Community and Faith in Community Scotland and others on 8 December. www.church-poverty.org.uk

With thanks to Alison Webster for some of the research and contents of this blog.

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