Nearly 2.5m people in London are below the poverty line, more than any other region in the country. London does not have the highest poverty rate because it attracts people in poverty, it has the highest levels of poverty because it is an extremely expensive place to live.
The cost-of-living crisis is affecting everyone, but those on lower incomes are least able to weather the storm. This is especially true in London, where so many households have zero financial resilience.
By far the biggest driver for London’s high levels of poverty is the cost of housing. Data from London’s Poverty Profile shows that poverty in London almost doubles when housing costs are taken into consideration.
Londoners in poverty are estimated to spend, on average, 54% of their total net income on housing costs. Those who are not in poverty spend just 13%. It’s worth bearing in mind this data is from before the startling rise in gas and electricity bills. It is now likely to be worse, especially for those in the private rented sector, where the poorest often live in the least energy efficient homes.
For people in poverty, there is no way to weather this storm. We already know what is happening – people go without food, heating, clothing. They borrow money to cover the basics. They end up in deep and persistent poverty.
What can we do?
This crisis is being pitched as one where we are being subjected to global winds that we cannot control. But high housing costs, the prevalence of insecure low-paid work, and an inadequate social safety net means too many people are ill-equipped to face any kind of shock.
Our sector is at the forefront of calling for change. And whilst we call, perhaps in hope rather than expectation, for bold action, there are things we can do to help now.
We can continue to push for more people to be paid the real Living Wage, something we are doing by supporting the Living Wage Foundation to make London a Living Wage City. Ignore the advice from the Governor of the Bank of England to exercise pay restraint. We should never be afraid to demand that those who are working yet in poverty are paid more, surely a basic principle of any healthy economy.
And whilst our calls for a more adequately funded system of social security fall on deaf ears, we can always push for more people to take up the benefits they are entitled to. It can be difficult – you have to find those who are eligible and support them to claim – but it is possible. For example, we funded Policy in Practice, a data analytics company that specialises in benefits data, to work with local authorities to use data science to identify people eligible for council tax benefit.
It is ideas like these, alongside the campaigning and advice work that our sector is so good at, that can make a difference right now to the lives of low-income Londoners.