Foodbanks on the rise: benefits aren’t always the answer

Some of this yesterday’s papers were difficult to read. “Hungry Britain” screamed the Independent in its front page splash.

Page two of the Guardian declared that “Welfare cuts have caused hunger and destitution”. Both articles are drawn from a new report Walking the Breadline by Church Action on Poverty and Oxfam. It examines the rise in foodbanks and food poverty in the UK and attributes much of this to changes in the welfare system The number of families turning to foodbanks is shocking and should act as wake up call to everyone,but is the rise in the use of food banks really a simple result of “the cuts”?

Leave aside the other problems with the report. Look at figures taken from the Trussel Trust and you can see that foodbank use has been rising rapidly since 2005, nearly doubling every year.

The number of foodbanks was rising rapidly even when benefits were increasing significantly faster than wages. The most common reason people use foodbanks is actually delays in benefits being paid. This accounts for nearly 30 per cent of referrals to Trussel Trust’s foodbanks in 2011-12. We have an incredibly complex benefit system which has been made worse by years of tinkering. Yet another reason to simplify the system along the lines of the Universal Credit.

After that, low income is the second biggest reason for referral at nearly 19 per cent. The cost of living has spiralled and low wages simply can’t keep up. But instead of doing something about the taxes and regulations that undermine everyone’s living standards, they want to rob Peter to pay Paul by increasing benefits, at the expense of higher taxes.

If we want to stop people relying on foodbanks, the first step should be to cut taxes on low earners. Even those on minimum wage hand over a considerable amount of their earnings to the taxman before they get to paying bills like their Council Tax. You want a living wage? Then stop taxing the minimum wage . And when you do spend it the taxman takes an increasing chunk of the money in VAT, Fuel Duty and charges on life’s little treats whether it is a drink or a smoke. No wonder people are skint.

But it gets worse, planning laws get in the way of house building so rents are sky high. Government energy policy it makes it more and more expensive to heat a home at winter, while the Common Agriculture Policy forces up food prices.

And who do you think pays taxes like National Insurance and Corporation Tax?

Workers. In lower wages.

In all of these ways, politicians have made choices that have undermined people’s living standards. It means that those people at the margins of the labour market, and trapped there thanks to a dysfunctional tax and benefit system, are much more likely to be pushed into reliance on a foodbank when things go wrong.

The problem is that too many campaigners who want to help are wedded to the idea that the solution to poverty is just more benefits. We have tried that for the last twenty years and where has it got us? An unaffordable benefits bill for taxpayers, people paying their taxes only to be handed the cash back after it has been put through the cogs of bureaucracy and zero action on the root causes of poverty. If you want to read a real manifesto for tackling poverty read the excellent Redefining the Poverty Debate  by Kristian Niemietz of the Institute of Economic Affairs.

There is far more to poverty in this country than “benefit cuts”. For too long those wedded to a failed way of tackling poverty have been allowed to set the terms of the debate. We owe it to those struggling just to put food on the table to re-examine how we tackle poverty in the UK rather than pretending throwing someone else’s money at the problem is the answer.

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