The United Kingdom is experiencing a resurgence of poverty levels not seen since the early 20th century, a situation mirroring conditions documented in landmark surveys conducted by Booth and Rowntree around 1900. While the initial wave of poverty at the turn of the last century spurred the creation of the modern welfare state, current conditions are unfolding with fewer corresponding proposals for systemic reform, according to a recent analysis.
The core driver of poverty remains consistent across the centuries: inadequate pay for precarious work. However, a significant differentiating factor today is the decline of the welfare state itself, a system initially designed to mitigate such economic hardship. This creates a troubling feedback loop, where weakened social safety nets exacerbate the impact of low wages and unstable employment.
The expansion of state welfare in Britain occurred in stages, beginning in 1906 and accelerating after World War II. This growth coincided with periods of full employment and robust labor market regulation, particularly under Labour governments up until the late 1970s. During this era, poverty rates declined, though they never reached zero. A pivotal shift occurred under Margaret Thatcher’s Conservative government (1979-1990), marked by substantial cuts to social welfare programs and a corresponding surge in poverty.
A period of relative respite followed under New Labour (1997-2010), but successive Conservative governments since 2010 have implemented further cuts to social welfare, contributing to a renewed increase in poverty and resulting in levels of deprivation comparable to those of the early 1900s. The current situation is particularly concerning given the relative lack of widespread discussion regarding comprehensive solutions.
In 2020/21, 13.4 million people in the UK were living in poverty, representing 20% of the population. This figure breaks down as 7.9 million working-age adults, 3.9 million children and 1.7 million pensioners. Interestingly, the headline poverty rate and numbers actually decreased between 2019/20 and 2020/21, a phenomenon likely linked to the unique economic circumstances of the first year of the COVID-19 pandemic. However, data from 2021/22 and 2022/23 paints a different picture, suggesting that the initial decline was not sustained.
The cost of living crisis is a central component of the current challenges. The Joseph Rowntree Foundation highlights the profound implications of this crisis, noting that many individuals are facing increasingly difficult choices regarding their spending priorities. These are choices that, in a wealthy nation like the UK, should not be necessary. The foundation emphasizes the importance of analyzing trends in poverty, its characteristics, and its impacts to understand the current situation and future prospects.
While precise figures for the most recent period are still being compiled, the trend is clear: poverty is rising. The factors contributing to this rise are complex and interconnected, including stagnant wages, the erosion of social safety nets, and the broader economic pressures stemming from global events. The lack of robust proposals for reform, as noted in the recent analysis, is a particularly worrying sign.
The UK government recently announced a strategy aimed at lifting 550,000 children out of relative low income after housing costs by 2028/29. However, the effectiveness of this strategy remains to be seen, and its scope may be insufficient to address the scale of the problem. The current situation demands a more comprehensive and sustained response, one that addresses the root causes of poverty and strengthens the social safety net.
The parallels between the current situation and the conditions that prevailed around 1900 are striking. Then, as now, poverty was widespread and deeply entrenched. Then, as now, inadequate pay and precarious work were major contributing factors. The key difference lies in the response. The early 20th century saw a wave of social reform that led to the creation of the welfare state. Whether the current crisis will trigger a similar response remains to be seen, but the urgency of the situation is undeniable.
