In-work Poverty

Kenny MacAskill Excerpts

Wednesday 16th March 2022 Westminster Hall

[Kenny MacAskill (East Lothian) (Alba)]

It is a pleasure to serve under your chairmanship. Ms Rees. I pay tribute to the hon. Member for Easington (Grahame Morris) for securing the debate and for his comments.

In-work poverty undermines the social contract that evolved in this country after world war two with the establishment of the welfare state. The whole purpose of Beveridge was that people would work and pay national insurance, which would provide for their sickness and retirement. Those who fell through the gap would be dealt with by supplementary benefit. Work was the route out of poverty. That is no longer the situation.

We now have in-work poverty, as others have said—something that is unprecedented in recent times. That is not an accident; it is an economic model that has come from the United States. It was brought in—established perhaps—by Clinton. For those who have not read it, I recommend the book by Barbara Ehrenreich, “Nickel and Dimed”. She refers to the United States that came into being after the reforms brought in by Bill Clinton in 1996 with the Welfare Reform Act. That created a low-wage economy. It might have created many jobs, and Clinton dined out on that for a long time, until people began to drill down into what was actually happening. It was a low-wage economy. Ehrenreich talks about people having to do one, two or three jobs simply to survive—not to pay medical bills or school fees, but simply to live—because the cost of living made it impossible. We perceived that to be a problem for people in the United States, which did not have a welfare state, and that it would not apply here. We still have a welfare state, but it is beginning to fall apart—not just fraying at the seams, but being eroded, corroded and, indeed, torn down from within.

The whole concept of work being a route out of poverty no longer applies. That simply is not the case, as we can see all about us. It is not simply about the statistics that have been mentioned; we are conscious of other aspects. The problem hits every corner of this country and applies to every sector. The movie “Sorry We Missed You” highlights how the issue affects social care and distribution, but there is hardly a sector that is not affected.

The problem is not restricted simply to those who work on zero-hour contracts because, as in the United States, we now have people who cannot live on the hours they get in one job; they have to do two or three jobs simply to survive, and we have to make sure that that changes. It is simply unacceptable, and a breach of the social contract that was supposed to be the benefit of world war two.

We still see risks, so what can we do about them? First and foremost, we have to recognise that this was an issue even before coronavirus and the cost of living crisis. It was, as others have correctly testified, predicated on high rents. People were unable to earn enough to meet their rent, and they had to choose between paying their rent and eating. That is now compounded by a cost of living increase, especially for fuel, and inflation is hammering food costs. Now, the situation is not just about people managing to pay the rent, but deciding whether they can heat their homes before even indulging in feeding themselves and their children. Society has to change, but how can we do it?

Fundamentally, we must ensure first of all that we have a living wage. Our current minimum wage is not enough; it needs to be a national living wage. We need to empower trade unions, because workers are being driven right over. We must regulate, so that people can afford their rent. Finally, as we face escalating fuel costs, we need a social tariff and an end to the abomination of standing charges, which are impoverishing people. There is a better way. This is not the society that was anticipated by the generations before us.