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Has George Osborne outlawed poverty? Leading charity unpicks the Summer Budget

Simon Hopkins, Chief Executive of Turn2us | Turn2us

3 min read Partner content

Leading charity Turn2Us, which supports people in financial hardship, analyses what yesterday’s Budget will mean for the most poor and vulnerable in the UK

The definition of poverty is something that bothers a lot of people in the UK. Some dislike the lack of emphasis on whether it is relative or absolute, others proclaim that in a country as rich as ours it simply does not exist. More recently Iain Duncan Smith has elicited widespread controversy for proposing to scrap how we currently measure Child Poverty altogether. Defining poverty is not without its problems, and as a charity whose mission is “Fighting UK Poverty” we understand that more than most.

So it is with that in mind that I was taken quite by surprise at the Chancellor’s announcement that the Low Pay Commission will ensure that the new ‘National Living Wage’ will reach 60% of median earnings by 2020. For those who missed the debate last week, having an income of 60% of a country’s median income is generally how relative poverty is defined.

But there are exceptions, there always are. First of all, those under 25 will be excluded from the ‘National Living Wage’ and that is a group where we have seen some of the steepest hikes in poverty in recent years. And before the Living Wage Foundation collect their P45s it needs to be made clear that whilst the Chancellor has stolen the name he hasn’t actually taken on the policy lock stock and barrel. Similarly, whilst the Low Pay Commission is tasked with setting out recommendations it does not constitute a legal obligation for this, or any other government, to apply them.

But there are more immediate concerns. In-work poverty may become a technical impossibility by 2020 but for those who are out of work and on low incomes it is set to become a very practical reality in the coming months. Let’s make no bones about it, tax credits support some of the poorest in society and there are thousands of households for whom they represent a genuine lifeline. Today’s proposed cuts are not simply incremental changes – they are pretty drastic in their nature. Whilst the broader budget may compensate many of those in work there can be no doubt that many of the most financially vulnerable will be made more so. It is often those that fall through the gaps that are hardest hit, and today we have seen where some of those dangers lie.

Over the next four years tax credit thresholds will change dramatically and whilst none of these things will happen overnight the debate in parliament starts tomorrow. It is vital that the focus of debate is not on a theoretical abolition of in-work poverty by 2020 but very real threat of families making the choice between heating and eating in 2016. Those are the people that we support on a daily basis, and those are the people that we would urge the government to keep at the top of the agenda as the proposals are debated in parliament.

Simon Hopkins, Chief Executive, Turn2us

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