A quarter of all Britons are living in poverty according to a new report from the Joseph Rowntree Foundation . Poverty and Social Exclusion in Britain , published on September 11, is the most comprehensive and rigorous survey ever conducted in this area and was carried out by the Office for National Statistics and four universities. Findings include:
• around 9.5 million people cannot afford to keep their homes adequately heated or free from damp;
• four million people cannot afford fresh fruit and vegetables, or two meals a day;
• some 6.5 million adults cannot afford essential clothing – such as a warm, waterproof coat.
Interviews with a nationally-representative sample of adults were used to draw up a checklist of household items and activities that a majority of people consider to be necessities. A second survey established how many individuals lack these ‘necessities of life’ and gathered information on their income and social exclusion. Between 1983 and 1990 the number of households living in poverty grew from 14% to 21%. By 1999, it had reached more than 24%, although the numbers living in chronic, long-term poverty showed some improvement, falling from 4% to 2.5%. Contact David Utting, JRF, on 020 7278 9665 (http://www.jrf.org.uk)
Measuring deprivation
A new and detailed analysis of deprivation in England was released by the DETR on August 22. The Indices of Deprivation , available on CD Rom, include 33 indicators of key aspects such as low income, unemployment, poor health and access to education and training. The indices demonstrate that patterns of deprivation across the country are more complex than a simple North/South divide, with many large cities experiencing extremes of deprivation and relative affluence.
The government’s Office for National Statistics also published its latest regional trends survey ( Regional Trends No. 35 ) on September 27, available through the Stationery Office.
Nationwide Foundation , which announced a £7 million grant-making programme over two years earlier this year, is using detailed government regional statistics to weight its giving towards areas of greatest need, dividing the UK into twelve regions. Contact DETR Enquiries on 020 7890 3000 (http://www.regeneration.detr.gov.uk), the Stationery Office on 0870 600 5522 (http://www.tsonlilne.co.uk) or Jacquie Reeve, Nationwide Foundation, on 01793
457 183
Power firms help fuel poor
ScottishPower plans to roll out its .e.s.t.makers joint venture with the Eaga Partnership on a national basis in November. The £1.2 million neighbourhood energy scheme is targeted at the one in four households with the lowest income, largely ignored in the scramble for market share following deregulation. These households tend to spend a disproportionately high share of income on fuel. .e.s.t.makers will offer energy efficiency packages, access to grants, flexible payment options, checks on eligibility for extra state benefit and budgeting advice. In pilot areas customers have been able to make savings averaging 25% in energy use.
Meanwhile British Gas is targeting customers on benefit with its Warm-a-Life initiative, announced on September 20. This combines free insulation, a benefits health check and a one-off price reduction, saving an average dual fuel customer as much as £688 in the first year. British Gas is also entering a partnership with NACAB (National Association of Citizens’ Advice Bureaux) to increase the availability of energy and debt management advice. Contact Ann Hood, ScottishPower, on 0141 568 2000 (http://www.scottishpower.plc.uk) and Richard Dymond, British Gas, on 01784 645346 (http://www.gas.co.uk)
Post Office plans provoke disagreements
Plans by The Post Office to set up a ‘universal bank’ aimed at low income customers have been criticised by several high street banks, who describe their anticipated contribution to running it as equivalent to a ‘windfall tax’. The scheme is part of government proposals to modernise the post office network, including a pledge to prevent any avoidable closures of rural branches and to make post offices into government ‘one-stop-shops’, while switching benefit payments into bank accounts. Alliance & Leicester has warned that the new scheme may conflict with the contract it holds with The Post Office to run Girobank. Contact Caroline Pearson, The Post Office, on 020 7490 2888 (http://www.postoffice-counters.co.uk) and DTI Enquiries on 020 7215 5000 (http://www.dti.gov.uk)
Banks make new pledges
The British Bankers’ Association unveiled a new voluntary code of conduct on September 19 for banks’ and building societies’ dealings with personal customers. Innovations include telling customers about ‘no frills’ accounts aimed at people on low incomes, providing access to free money management advice and providing eight weeks notice of any branch closures, with advice about alternative arrangements. The new code, based on consultations with consumer groups, regulators and members of the public, will apply from January 2001 and cover all types of banking services delivery including the Internet. It is widely seen as a move to pre-empt further criticisms and possible changes to the way the industry is regulated, following a damning report by Don Cruickshank in March. Contact BBA on 020 7216 8800 (http://www.bba.org.uk)
Credit where it’s due
Britain’s credit unions published a business plan on September 11 to extend financial services to 1.5 million people, many in deprived communities. They want banks and building societies to fund the £15 million scheme, which would enable people on low incomes to open current accounts and so use direct debits, thereby lowering utility bills. The new scheme, which could become self-supporting within five years, responds to a central recommendation of the Credit Unions Task Force, chaired by Fred Goodwin, chief executive of the Royal Bank of Scotland . Contact ABCUL on 0161 832 3694 (http://www.abcul.org)
news in brief
• Tesco has trained and recruited over 180 local unemployed people as part of its development of a new store at Seacroft in East Leeds. Help with travel and a ‘superchildminder’ service aim to enable single parents to take up employment there. Contact Gary Cartmell, Seacroft Partnership, on 01253 628928
• England’s most deprived areas are set to benefit from £1.2 billion in Single Regeneration Budget funding – up 15% on last year – announced at the start of August. A total of 189 schemes will benefit over the life of the seven year scheme. Contact DETR Enquiries on 020 7890 3000 (http://www.detr.gov.uk)
• London mayor, Ken Livingstone MP, is setting up nine short term Policy Commissions and will be holding several public meetings in preparation for his ‘London Summit’ in November to set the context for future London regeneration. Contact GLA on 020 7983 4000 (http://www.london.gov.uk)
Comment
By any standard, the picture Rowntree paints of Britain today is truly shocking, all the more so given Chancellor Gordon Brown’s bulging budget surplus and at a time when the majority is materially better off than ever before. The statistics demand an urgent response. So who should act? The straight answer is: not companies, or at least not in the first instance.
Such a blunt answer courts controversy, so let’s risk more by explaining. Business is about selling things to people with the money to buy them. To demand otherwise is to ask for charity, not understand economics. Banks, by definition, are for people with money. The more you have, the more they take an interest. The converse is also true – a simple commercial reality which is currently annoying the government.
Companies can only be expected to act when they can make money by providing goods and services (other than through their important but limited community involvement budgets – well done Nationwide). Look at it this way, and poor people cease to be a problem and become a market, with attention focused on the spending side of the equation. (Incidentally, surveys about income tend to overlook the size of the ‘informal’ untaxed cash economy – one reason for doubting that the universal bank will catch on.)
Certainly many companies can do more to ensure they have viable products tailored to suit all income brackets, and to provide them in imaginative ways – well done British Gas and ScottishPower. But the government’s main effort should be in getting more money into deprived areas. In fairness, there are some positive signs – relenting on pensions, new inner city ‘neighbourhood renewal’ funds, the Social Exclusion Unit to carry on until 2002, and so forth. But the emphasis must be on cash in the pockets of low income households, not grandiose schemes. Then, when there’s money to be made, companies will be first in the queue to help.
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