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Poverty: lessons from Belfast

February 21st 2018

Victoria Winckler asks what lessons Wales can learn from efforts to solve poverty in Northern Ireland.

Yesterday I had the honour of contributing to the launch of the Joseph Rowntree Foundation’s latest poverty monitor.  No, this wasn’t in or even about Wales – it was the poverty monitor for Northern Ireland. As always, it made for sobering reading, not only because of portrait of poverty it painted in Northern Ireland but also because it has some important messages for us on the other side of the Irish Sea.

Despite its troubled history, Northern Ireland’s poverty rate is lower than Wales’ rate, at 20% of the population compared with 24%. A few percentage points might not sound much, but here’s the reality:

  • cutting Wales’ poverty rate to the same as Northern Ireland would mean around 120,000 fewer people struggling to make ends meet – the entire population of Merthyr Tydfil and Blaenau Gwent combined.
  • cutting Wales’ rate of child poverty to the same as Northern Ireland would mean 33,000 fewer children in poverty – equivalent to 38 secondary schools full of children.

But the importance of the report is much more than the simple and depressing headline rates of poverty.

The first key message is that jobs are only half the answer to poverty.

Wales has done astonishingly well in creating jobs and getting people into them. The effects are seen with Wales now having a lower proportion of workless households and a much higher employment rate than Northern Ireland.  The differences between Wales and the rest of Great Britain are now very small.

But getting people into work has clearly not cut poverty. The combination of low pay and part-time work , or only one household member being in work, has meant that household incomes have not risen above the poverty threshold.  Wales has, crudely, swapped out-of-work poverty for in-work poverty.

All the more reason then for the Welsh Government and others to take action to boost pay and conditions at work.

The second key message is that housing costs matter.

Across the UK, people on low incomes are more likely to spend a disproportion amount on housing costs.  On average, nearly half (47%) of the poorest fifth of households spent more than a third of their income on housing costs but in Northern Ireland the proportion was just over a quarter (26%).  So while one in five families in Northern Ireland are still poor, they have a bit more disposable cash to spend on food, heating or other essentials because they’re not paying out so much on housing costs.

So the lesson for Wales is that, with headline rates of poverty showing no signs of improvement, keeping housing costs down is an important way of easing the pressures on low-income households.

The third key message is that benefits help to protect against poverty

One of the reasons that poverty rates in Northern Ireland are lower is welfare reform – or rather the lack of it.  As noted by the JRF Monitor, Northern Ireland has passed ‘mitigation measures’ to limit the impacts of certain benefit reforms. These measures include protecting people affected by changes to disability benefits for up to one year,  protecting some families with children from the impact of the benefit cap up to March 2020, extending discretionary
support (particularly for those transitioning to Universal Credit) and not implementing the Under-Occupancy Penalty.

These ‘mitigation measures’ have a big price tag, but they show that the social security system does make a difference to both individuals and the overall rate of poverty. Of course the main elements of social security aren’t devolved to the Welsh Government, but there are important parts of the overall welfare system that are devolved – like free school meals, additional help with housing costs and council tax support – and even free bus passes.

The lesson is that these can be carefully targeted and used to reduce poverty.

All too often we in Wales get stuck in our little boxes, chewing over the minutiae. I came back from Belfast with some vital messages – if we’re to reduce poverty here we need:

  • more and better jobs
  • decent affordable housing and
  • a fair social security system.

Victoria Winckler is Director of the Bevan Foundation.

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