1. UK poverty facts and figures

2. 22% of the UK lives below the poverty line
That’s 13.5 million people
This figure is for the year , and was published in December 2010.
A household is in poverty if its income is less than 60% of the median income for that kind of household. This is the official measure used internationally.

3. 1 in 5 children in the UK live in poverty
We have one of the highest rates of child poverty in Europe
This number had been dropping from 1999 to 2005, but has since risen or stayed constant.
Only Spain and Italy have higher levels of child poverty.

4. Disabled people
... are twice as likely to be in poverty as able-bodied people.
People who are sick or disabled are increasingly being forced to work – and punished if they cannot

5. The Tax Gap
The rich currently pay a lower proportion of their income in tax than the poor.
Corporations avoid their social obligations through widespread tax avoidance.
The lowest-earning 10% of people in the UK pay 39% of their incomes in tax, while the top 10% pay just 35%. Although high earners pay higher rates of income tax, taxes like VAT and fuel tax account for a higher proportion of expenditure for lower earners.
The government has chosen to tackle the deficit mainly by cutting spending rather than by taxing those who can afford to pay. They raised VAT to 20% but intend to scrap the new 50% income tax band, which is bringing in a good amount of revenue and only affects the richest 0.5% of the population.
Wealthy individuals and corporations can also avoid paying much of their tax altogether. Some of this takes place as illegal tax evasion, but huge amounts are lost through legal tax avoidance. This is big business, and as we’re constantly reassured, is ‘entirely legal.’ But it’s hardly moral.
£45-£100 billion is lost each year through tax avoidance and evasion. (The government admits to 45, but others have calculated much higher figures.)
Every pound avoided in tax is a pound less to spend on childcare, social care, health or education.  At a time when spending cuts are having a real and damaging impact on the lives of some of the poorest and most vulnerable people in the country, it is morally indefensible for some of Britain’s richest companies to be avoiding paying their fair share of UK taxes.
For comparison: just £1.5 billion is lost each year through benefit and tax credit fraud, mainly committed by people on low incomes. That’s 30 times less than the amount stolen by tax-dodging high earners and corporations. And yet over three years, the government spent £633,000 on tackling tax evasion and £17.5 million tackling benefit fraud – in other words, they spent 900 times as much pursuing each pound lost to benefit fraud as they did pursuing money lost through tax evasion. This would seem to imply that the government thinks it’s a bigger crime to steal from the tax-payer if you’re poor than if you’re rich!

6. The Pay Gap Businesses reward high earners with excessive pay...
whilst paying poverty wages to their lowest-paid staff
Pay ratios in the private sector are at record levels
At the moment, pay does not reflect people’s performance or the value of their work – at the top or at the bottom of the income scale. Businesses reward high earners with excessive pay, causing widespread public anger at the size of bankers’ bonuses and the salaries paid to ‘fat cats’.
At the same time, many companies pay poverty wages to their lowest-paid staff. The Minimum Wage is too low – and does not keep pace with rises in the cost of living - meaning that work is not a route out of poverty for many people. Half of all children living in poverty are in a household where someone is in paid work.
The disparity between top and bottom pay – the ‘pay ratio’ - is also an issue in itself. Bankers and company executives in the FTSE 100 are paid astronomical sums, even when their companies fail and have to be bailed out by the tax- payer. Many private companies pay their directors 100 or 200 times as much as their lowest-paid workers. This is simply unjust, and research shows that companies with a fairer ‘pay ratio’ actually perform better.

7. The Price Gap
The poorest are unjustly forced to pay higher prices for basic goods and services
Gas...
Electricity...
Insurance...
Banking and borrowing
This Poverty Premium costs families £1,300 a year
In late 2010, research by Save the Children (see poverty.org.uk/overtheodds) found that it costs an extra £1,300 a year to be poor in the UK. People on low incomes pay a ‘Poverty Premium’ for:
Fuel because people on low incomes often use prepayment meters, which charge a higher rate.
Insurance because people in poorer communities are viewed as a higher risk.
Food because people in poor communities often have limited access to shops selling affordable, fresh and healthy food.
Credit and banking are particularly important issues in this respect:
People on low incomes often cannot get credit from banks. They’re forced to use doorstep lenders, payday lenders and hire-purchase companies.
There is no legal limit on the fees and interest charged by these companies. Interest rates can be 180%APR or more.
People become trapped in poverty, unable to pay their debts. It perpetuates the gap between poor people and the wealthy, who are able to borrow money at much fairer rates.
The Close the Gap DVD and web page include a video which explains this ‘Debt Gap’ and features some real-life stories of legal loan sharks.

8. The Price Gap: fuel poverty
5 million households are in fuel poverty each winter.
More than 20,000 people die from the cold every year.
Fuel poverty is where a household has to pay more than 10% of its income to stay warm.
Families are forced to choose between heating and eating, while energy companies make record profits.

9. The Price Gap: high-cost credit
People on low incomes cannot get credit from banks.
They depend on rent-to-own companies, doorstep lenders and payday lenders.
These legal loan sharks exploit their vulnerable customers.
Unlike most other wealthy countries, the UK does not limit the interest and fees that can be charged by these lenders.
Interest rates can be as high as 5,000% APR.

10. The Power Gap This underlies all the other problems...
Statistics show that the lowest earners are also the least likely to participate in elections, politics and civic life in general.
People in disadvantaged communities often get very little say in what happens in their area. Even when regeneration initiatives take place, local people are often not consulted.
The Catholic Bishops’ Conference of England and Wales explained the problem like this: “The real ‘poor’ in a relatively prosperous Western society are those without sufficient means to take part in the life of the community... they cannot participate in the formation of public policies that might protect them from the adverse consequences of market forces... they are excluded from the community, and they are denied the rights of membership. Their choices are circumscribed; they have little personal freedom.”
There is a video available on the Close the Gap DVD or website which explains the Power Gap in more detail, through the example of what it’s like to live on a ‘peripheral’ housing estate.
This underlies all the other problems...
Big business exercises too much power
Local communities have little or no say in decisions that affect them

11. 30 years of Church Action on Poverty
Grassroots projects which help people in poverty to build sustainable livelihoods for themselves
National campaigns which give a voice to people in poverty and deliver fairer policies
Resources and support to mobilise churches and their communities

12. 30 years of Church Action on Poverty
Building partnerships of hope and transformation for the future
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