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‘Working exceed workless’ poor

07 December 2012

SHUTTERSTOCK

NEW figures from the think tank the Joseph Rowntree Foundation suggest that 6.1 million people who live in poverty are in working households. Excluding pensioners, that is one million more than live in poverty in workless households ( News, 2 November).

The Foundation's annual report Monitoring Poverty and Social Exclusion, written by the New Policy Institute (NPI), found that 4.4 million jobs paid less than £7 per hour. The national minimum wage is £6.19, but living-wage pressure groups say that the minimum should be £7.45.

The number of working families receiving Working Tax Credit - payments to top up wages - has risen by half since 2003 to 3.3 million in 2012.

The report also highlights the fluidity of poverty, where people move in and out of jobs, and the under-employment of the workforce. It calculates under-employment at 6.5 million: 1.4 million people work part-time, but want full-time work. That is a half-million increase since 2009.

"The most distinctive characteristic of poverty today is the very high number of working people who are also poor," the Foundation's chief executive, Julia Unwin, said. "Many more people have experienced poverty since the downturn, cycling in and out of insecure, short-term, and poorly paid jobs. Tackling poverty requires a comprehensive strategy."

The director of NPI, Peter Kenway, said: "The high level of in- work poverty undermines any idea that better incentives to enter work - the centrepiece of Universal Credit - is some kind of cure-all."

CARE researches tax levels. A report by the charity Christian Action Research and Education UK (CARE) says that British families pay some of the highest taxes in the Western world, and face a threshold that is lower in real terms than it was in 1990.

Further research to be published by CARE next week argues that the UK effective marginal tax rate - the combined effect on earnings of income tax and National Insurance increases, and the withdrawal of state welfare benefits for one-earner couple families and single-parent families - remains out of line with most of the developed world.

"Our tax system remains very individualistic and insensitive to family responsibility, compared with those of comparable OECD countries," the chief executive of CARE, Nola Leach, said. "Recognising marriage in the tax system . . . would help bring the UK back into line with its international counterparts."

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