In-work poverty

Rishi Sunak told parliament last month that creating jobs for people “is the best anti-poverty strategy that we have.” 

Several government ministers have churned out this line or similar over the last 12 years, but does it hold any truth? The evidence submitted to the All-Party Parliamentary Group (APPG) on Poverty for its report suggests that this is far from the case. 

Rates of in-work poverty have been rising steadily. Sixty-eight percent of working-age adults live in a household where at least one person works, the highest figure on record.

As part of the APPG’s short inquiry into in-work poverty, the cross-party group received submissions from employers, unions and third sector organisations, and held two evidence sessions looking at the experiences of in-work poverty and the role employers can play in addressing it.

The causes of in-work poverty are wide-ranging, and include low pay, insecure work, and the rising cost of living, meaning wages simply don’t stretch as far as they used to. However, one driver of in-work poverty that came up frequently in the evidence was the inadequacy of our social security system.

Social security plays a pivotal role in protecting those most at risk of in-work poverty. Sometimes parents can only work part time because they need to be able to fit their working hours around looking after their children. Childcare can be expensive, and can eat into the amount of money that working parents can take home. If a mum or dad needs to be close to school, there might not be higher-paid jobs available in the area. For parents struggling with insecure hours and low-paid jobs, the gap between what they have and what they need can be significant. The social security system plays a vital role in filling the gap, making sure families can meet their needs.

“The uncertainty of life on a low income is horrific. Zero-hour contracts and then being furloughed with no job to return to is like being on a rollercoaster from your worst nightmare. Being ill isn’t an option. Going to the doctors means time off work, then the worry of prescription charges and being signed off on SSP [statutory sick pay] means you carry on until you physically can’t carry on anymore… Something needs to change. We cannot continue to pretend that being in work means not being in poverty.” Mel, Participant, Covid Realities

When asked about tackling poverty, the government always makes a reference to getting people into work, increasing their hours or switching to a higher-paid role. Not only is this policy line unhelpful as it completely ignores groups in society who are unable to do paid work or work more hours, whether because they are sick, disabled or have caring responsibilities, but it’s also ineffective, as the jobs available are still low paid.

The APPG is calling on the government to introduce a second earner’s work allowance in universal credit so families can keep more of the money they earn. It also wants the government to bring forward the long-promised employment bill, and invest in adult skills as well as children’s services, particularly childcare. Employers aren’t off the hook: the APPG is calling for all organisations to pay the real living wage and adopt parent-friendly policies so working parents, especially mothers, can remain in the labour market.

CPAG acts as the co-secretariat for the APPG on Poverty alongside the Equality Trust.