Modern Life is Rubbish- Ten Ways That Poorer People Are Treated Unfairly In the UK

Modern Life is Rubbish- Ten Ways That Poorer People Are Treated Unfairly In the UK 

‘Em… Hang on a minute.’

 

I am conscious that, to date, many of my posts have been rather long, and rather abstract. So this time I wanted to say something more tangible- about how it seems to me that modern life in the UK is tilted towards unfairness if you are poor. Let me list 10 obvious ways, and then draw some conclusions.

Unfairness Number One- Energy Costs and Energy Transition

If you are poorer, you are more likely to have to use a pre-payment meter, which costs you more. You are also much more likely to be fuel poor, unable to heat your home properly, possibly suffering bad insulation, bad heating and more expense. And to add insult to injury, any taxes you pay or any surcharge on your bills to allow the much needed transition away from fossil fuels to low carbon and renewables, is unlikely to benefit you as lower income families don’t have the resources to hand to take advantage of subsidies home renewables.

 

Unfairness Number Two- Banking,Savings and Money 

The tendency is that poorer people will pay more for credit and loans, sometimes a lot more, and even if it is for basic services. This report from Save the Children  and this report explain in more detail- this table is from the Save the Children report:

Either because you don’t have the internet and/or can’t pay by direct debit, or your credit history is affected by poverty, or because you can’t afford large one off-purchases, if you are poor the evidence suggests you pay a lot more for big-ticket items. Oh, and your pay-as-you-go mobile service will be more expensive too. You may live in a less desirable area so you risk you’ll pay a lot more for insurance and car insurance too. Though action has been taken to cap the worst excesses of pay day lending, you’ll still end up with a much more poorer deal on credit and loans.

 

Unfairness Number Three- Access to Wealth and Investments 

Because you are poor, chances are you will have no or little savings and no or little wealth. That means that any returns you do make will be modest, whether that is on your savings account, modest private pension or dividends. You’ll likely not have a house of your own so the natural growth in housing value won’t accrue to you. Unlike rich people, you can’t afford investment advice to take advantage of complex investment opportunities. Even if you could, your small pot means you can’t compete with the much higher returns that people with capital secure.

 

Unfairness Number Four -Wealth and Your Start (and end!) in Life 

The last Labour government in the UK introduced Child Trust Funds, a form of asset based policies. 

It seems to me this was a great idea- it recognised that one glaring unfairness in life is that richer people often have more choices and do better because they have independent wealth, and that perhaps the state could start to rectify this with a savings based approach. Sadly, the coalition government scrapped the policy in 2010.

So, no only do some people start out with far more advantages in life, they can use their wealth and capital to secure even more advantage. Often the tax system rewards them- from higher rate tax relief on private pensions, to capital gains tax treatment, to (now much more generous) inheritance tax treatment. So, just so readers understand- not only do poorer people have no savings or wealth, but the tax system and lack of asset based policies mean any tax they do pay partly goes to subsidise tax reliefs for people who have way more wealth and opportunity. And the chances of a poorer person ever ‘catching up’ are very modest indeed.

 

Unfairness Number Five- Food Availability, Cost and Quality

Apparently food poverty affects 4 million people in the UK.

‘Food poverty is worse diet, worse access, worse health, higher percentage of income on food and less choice from a restricted range of foods.  Above all food poverty is about less or almost no consumption of fruit & vegetables’
Tim Lang, Professor of Food Policy at City University.

In a nutshell, if you’re poor your food costs you proportionately more, you have less choice, lower quality and worse health outcomes as a result.

Speaking of health…

Unfairness Number Six- Health Inequality

If you are poorer, you are far far more likely to be less healthy over the course of your life, to suffer higher burdens of diseases and to die younger. The gap between poorer people and richer people on health is wide and widening. In the interests of brevity I won’t dwell on this, but the statistics are shocking and unacceptable. 

Pioneering work in Scotland also shows how poverty affects your psychological well-being, with increased anxiety and negative physiological reactions.

Which reminds me, it’s also worse for you environmentally…

Unfairness Number Seven- Poorer Environment 

Dear reader, I don’t have the time to assemble the evidence I should here- perhaps you will accept my special pleading that as an ex-senior manager for a national environment agency, I do have some understanding in this area. For now, I’ll rely on a wikipedia definition of environmental inequality 

It has almost always been the case that the richest lived in better environmental conditions than the poorest and things have not really changed. Think how, in the days of really bad environments full of fumes, and odours and fogs, richer people lived upwind of the prevailing wind, or on raised ground. Sadly things have not changed as much as we might have hoped. If you are poorer, you are more likely to live next to a factory, to a noisy environment like a road, to live with poorer air and water quality, you’re less likely to live next to green space (in urban environments), you’re more likely to live in areas that flood, more likely to live next to incinerators or landfills, and more likely to have ‘disamenities’ such as graffiti, dog fouling, litter, vandalism and derelict land in your local environment.

 

Unfairness Number Eight– Access to Education

This blog is already rather link heavy, so let me just state that the evidence is that you are more likely to go to a poorer performing school if you are poorer, less likely to see a societal valuing of and governmental focus on your technical and vocational skills if that is your path you want to chose, more likely to incur the highest debts if you are a poorer student in Scotland, and much less likely to go to University if you are a poorer student anywhere in the UK. In Scotland if you are a poorer, older learner, you’ve also seen severe cut backs in part-time places for life long learning. Overall, in a modern economy and life-style where education is the key to many things, if you are poorer you’re less likely to be able to access it and its quality may be poorer.

 

Unfairness Number 9- Access to Legal Services 

A key means to play a full part in society is the ability to defend your reputation, access courts for family disputes or government maladministration, have the ability to right wrongs done to you, and take action the things that matter to you and your community. One might call that access to justice. Sadly, if you are poor, your access to legal advice and the courts is likely to be much worse than a rich person’s. And sadly, that ability seems to be declining. 

 

Unfairness Number 10- Differences in How The World of Work and Business Treats You

For many well off people, it seems self-evident to them that they need a stable environment, the ability to have a stable legal and governmental system to plan their investments around, and proper incentives to work and to keep a fair share of their income. For some reason though, that position is reversed for how we manage to treat poorer people- from punitive and ineffective welfare sanctions, to lack of workplace rights and security to zero-hours contracts, poorer people tend to form the bulk of the precariat.

 

Conclusions

When I started to think about this, I must admit that initially I thought about just pre-payment meters. But as my list shows, everything from the cost of your energy, to the quality of your food, to your mental health and life expectancy, and onto your access to legal services, education and stable work, is most likely worse if you are poorer.

Now, some on the right of politics may response by saying ‘look, it’s to be expected, no one wants to see poorer people do less well, but its to be expected- resources in life are a function of ability and the just rewards of the market and we should accept that and mitigate where we can’

Sorry, I reject that view for two reasons. Firstly, as I set out in my blog on societal risks, I believe that some of these risks are entirely foreseeable, a result of systematic problems, poor policy and lack of planning. I believe government has a duty to do something about them. As I said in that blog:

We are searching for things that the state owes an obligation to its citizens to address, across the full range of socio-structural, socio-technological and socio-cultural risks discussed above.

We are searching for things where the state has made decisions between options, and those decisions have consequences for individuals. We are looking for decisions and risks that violate basic rights, and where something can be done about that. We are excluding on the whole individual decisions where a choice was made and it didn’t work out. We are particularly looking for those risks that, absent substantial wealth and resources, it is difficult for an individual to foresee, to manage via self-help alone, and where reasonable efforts are  or have been already made by the citizen to address the risk.’

I think every one of those ‘unfairnesses’ that I list above fall into the risk categories I mention.

More fundamentally, I’m back to the basic structure of society and the principles of a fair and just liberal society. In my blog on this I set out principles to judge such a society, the most challenging of which is the Rawlsian difference principle:

‘Principle 2- Social and economic inequalities are to be arranged so that they are both:

(a) to the greatest benefit of the least advantaged, consistent with the just savings principle, and

(b)attached to offices and positions open to all under conditions of fair equality of opportunity.’

I don’t think anyone could read through that list of unfairness towards the poorer members of society and pretend that we are meeting this test. So, we need to do better- it’s a fundamental test of our claim to be a decent society and we are currently failing it. As ever, thanks for reading

Author: DaveGorman

An Englishman longtime in Scotland, interested in new ideas for liberalism that recognise our challenges in the 21st century. Loves clouds, ideas, environment and applying liberal thinking to make things better. Speaking in a personal capacity of course.

2 thoughts on “Modern Life is Rubbish- Ten Ways That Poorer People Are Treated Unfairly In the UK”

  1. Good blog. Some interesting points. You could also have included VAT which is a regressive tax which takes up a disproportionate part of the income of the least well off.

    Although I can see what Child Trust Funds were trying to do I’m not a great fan, and I fear that they were introduced as much to push public money into propping up share prices (which Gordon Brown knew were about to crash), than anything else. The default was for CTFs to be invested in unit trusts rather than fixed interest accounts (which were also available but you had to seek them out) was not (in my view) a good investment at the time. I guess we’ll see who the winners and losers are in a couple of years time when the things pay out. If families who have moved between several rented properties in the previous 16 or 18 years actually remember that they have a CTF and who it’s invested. I suspect that there will be a lot of dormant investments in CTFs which will eventually assimilated by the Treasury.

    Have you changed your view on access to Higher Education? In the past I’m sure you’re said that in your view in England children from less well off families were not being put off going to university despite tuition fees.

  2. Thanks, nice to have a comment! Yes agreed, VAT is regressive and a good candidate to mention. Though I seem to recall some IFS information that as you move from certain goods like energy, food and other basics towards higher status goods, then its not as regressive as you think there (perhaps not surprisingly).

    It’s an entire other blog I think that fairness, and the meaning of fairness, and how to share our resources fairly- I’m going to have a shot at writing it soon. It is a very fair question to ask (a) to what extent does the state have the right to ‘reset to zero’ by redistributing goods and wealth earned over a lifetime, and depriving people of the chance to pass onto their children, verses the problems that not doing so creates for fairness and the chance to equalise opportunity and (b) whether asset based policies such as CTFs are the answer.

    On HE I still think the evidence points to the English reforms being surprisingly positive for poorer kids, and with less evidence of people being put off that most people expected. I’d argue that this is was result of Simon Hughes and the LibDems intervening to make the final fees system pretty generous and progressive. However, in Tories hands its being eroded, the abolition of maintenance grants is a bad move. More seriously, if the scheme is so generous that it removes much of the burden over time via write-off of debt, what’s the point of it in the first place? A policy that sends a bad signal at a time when knowledge and skills are more important than ever and raises fair less than it was originally expected to. So, although the IFS likes to point out that abolishing fees is pretty expensive and the gains largely go to wealthier graduates, I still feel the symbolism of fees is wrong, and so it should go.
    So, yes, despite fees England does better than Scotland on poorer kids access and attainment, but I’d still abolish and look for other ways to encourage and support poorer kids.

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