Rachel Hopkins
Main Page: Rachel Hopkins (Labour - Luton South)Department Debates - View all Rachel Hopkins's debates with the Department for Work and Pensions
In-work Poverty
Rachel Hopkins Excerpts(10 months, 2 weeks ago)
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Rachel Hopkins (Luton South) (Lab)
It is a pleasure to serve under your chairmanship, Sir George. I thank my hon. Friend the Member for Slough (Mr Dhesi) for bringing forward this really important debate on in-work poverty.
Having a job should bring people security, so that they can raise their family, yet we are seeing so many more cases where being in work is leading to in-work poverty. Research from the Joseph Rowntree Foundation found that 61% of working-age adults in poverty live in a household where at least one adult is in work, and 11% of all workers live in a household in poverty. The poverty rate for part-time workers is double that for full-time workers—18% compared with 9%—and self-employed workers are twice as likely to be in poverty as employees, at 21% compared with 10%.
In-work poverty does not affect all groups equally. Ethnic minorities have substantially higher in-work poverty and higher child poverty rates. Many ethnic minority groups are more likely to have the types of jobs and working patterns that are associated with in-work poverty. This Conservative Government’s cost of living crisis has seen real-terms pay fall at the fastest rate since 2001, when records began. As we see mortgage rates increase and rents rise, millions face an increased risk of falling into in-work poverty.
I want to focus on housing. Around 2 million households in the private rented sector—around 38% of the total of those in the private rented sector—receive housing cost support through universal credit or housing benefit, yet the Government chose to freeze local housing allowance rates between 2016 and 2020. Although there was a change in 2020, in the pandemic, it has been frozen since that time. Institute for Fiscal Studies analysis shows that in Luton there is now a £100 deficit in the local housing allowance rate, compared with the lowest rents in the area. Office for National Statistics figures show that the median rent paid by tenants in Luton increased by 8% between March 2020 and March this year.
There is also a significant increase in the number of people in a negative budget; they are unable to meet their living costs, despite being in work. The causes of negative budgets are complex, but there are fundamentally two reasons: a low income from being in low-paid work, and having high household costs. Citizens Advice Luton is seeing increasing numbers of people in negative budget, increased personal debt and increased poverty.
I want to press the Minister. What do I say to those families who are working hard, yet struggling to meet their basic living costs? I am deeply concerned that the lack of action on the local housing allowance will mean that more and more of my Luton South constituents will face eviction, as they simply cannot afford their rent.