Dignity. It is fundamental to who we are and our place in society. One way to deprive people of the opportunity to lead dignified lives is to take away the means to meet their material needs. It is undignified to have to resort to food banks to feed your children; to wear two coats indoors against the cold; to plead against eviction because of an inability to pay the rent; to deny children a birthday party because of cost. The poorest people in the UK are about to experience a fresh wave of such indignities. These psycho-social assaults will be joined by the physical ill-effects of poverty.
My life’s work has been studying the relationship between social conditions and inequalities in health. In the UK, a decade of austerity damaged public health and made health equity worse. But the cost of living crisis – and the chancellor’s failure to deal with it – is unprecedented, with its threats to the health and wellbeing of the nation. A 54% rise in the energy price cap will now mean an average household will pay £1,971 a year for gas and electricity, at the same time that council tax, water bills and car tax are all increasing. In October, a further rise pushing the annual energy bill up to £2,300 is expected.
The typical working-age household will, according to the Resolution Foundation, experience a 4% fall in income, £1,100, in 2022-23. Surely, one might think, 4% is scarcely noticeable, hardly a matter of life and death? It is if you are on the margins.
The Resolution Foundation gives the example of a single parent, with one child, working 20 hours a week at a low-to-medium wage. In September 2021, this person might have had an income of £18,265. The precipitate removal of the universal credit boost will have reduced income by £1,040. The cost of living rise to September 2022 will take another £1,198 off income. With the chancellor’s changes to taxes and allowances, and salary increases, this person’s income in September 2022 will be £17,681 – £584 less than it was a year earlier. (By contrast, a couple working full-time, both at the median wage, will see their net income fall by 1%, £392.)
Inflation of more than 8%, and the government’s failure to deal with the cost of living crisis for the poorest people – an unemployed single person will see a 15% drop in income – will put an extra 1.3 million people, including 500,000 children, below the poverty line.
When examining the effects on health and wellbeing because of this fall of income, there are at least three important considerations: the differential effects of losses as against gains; relative and absolute poverty; and the value provided to people by welfare and public services.
If adding £500 to annual household income improves wellbeing, as the evidence shows, what does removing £500 do? According to Daniel Kahneman and Amos Tversky’s influential research, the negative effect of a loss, in general, is twice as great as the positive effect of a similar gain. It is of fleeting intellectual interest whether taking away a few houses and yachts from an oligarch damages his health and wellbeing more than giving him a billion or two improves it. Of much greater concern is what removing £584 a year does to the life of someone who is struggling to get by. An extra £10 a week could help a little – save for a few weeks and buy your child a new pair of trainers. Taking away £10 a week can mean not just the choice between heating and eating but doing without both. And that will be bad both physically and psychologically.
A key insight is how much intellectual energy is involved in being poor. Scarcity – in the words of Sendhil Mullainathan and Eldar Shafir’s book, Why Having Too Little Means So Much – reduces intellectual bandwidth. If you have to worry about whether you have food for dinner that evening, and for the rent on Friday, you have little space to think about anything else. Such stress can permanently affect the development of your children. A related concept is that it is not bad choices that lead people to be poor, it is poverty that leads to “bad” choices.
An abiding scientific and practical question is the health significance of absolute poverty – having insufficient money to meet one’s basic needs – as compared with relative poverty – being poor relative to other people. The easy answer is that both are vital to health. In our various reports, one of our six areas of recommendation was that everyone should have sufficient income to lead a healthy life. Income was not our only recommendation, but it relates intimately to several of the others: child development; adequate food and nutrition; and decent housing. Figures from the Food Foundation show that for households in the bottom 10% of household income to follow healthy eating guidance, they would have to spend 74% of their income on food. It is not ignorance or the inability to cook that is the problem. It is poverty.
But relative income is important, too. Following Amartya Sen, relative inequalities in income relate to absolute inequalities in capabilities. An idea that goes back to Adam Smith is that the essentials of life include whatever is necessary to take your place in public without shame. This is about having agency, a sense of self-worth, and participating in networks of family and friends. Lack of income threatens these fundamental components of living in society, and damages mental and physical health.
The third issue is captured by the movement for universal basic services. If public transport were free at the point of use, if social housing were available and affordable, home heating affordable, nutritious food available without a cost premium, then relative lack of individual income would be less harmful for health. In the UK, public services were cut dramatically, and in regressive fashion, by a decade of austerity. The failure of allocations to public services to rise in line with inflation in the recent spring statement will mean further pressures on public sector pay and on the provision of public services.
In the decade before the pandemic, improvement in health in the UK slowed dramatically, inequalities increased, and health for the poorest people got worse. This was all amplified by the pandemic. Unless we deal with the inability of people to meet their basic needs, by adequate income and services, we are in danger of inflicting a humanitarian calamity in one of the richest countries in the world.