Government cuts are the cause of rise in working poverty, Emma tells Chancellor

December 5, 2013

131206 - ELB Autumn Statement smallThe Coalition Government’s cuts to the public sector in the North East have contributed to falling incomes and rising poverty among working people, Emma told the Chancellor of the Exchequer on Thursday.

Following the Chancellor’s Autumn Statement, Emma explained over a quarter of public sector jobs paid less than the Living Wage, and that as alternatives to low-paid private sector work diminished in South Shields the number of working people living below the poverty line had increased.

Emma told the Chancellor:

“When this Government gutted the public sector in the north-east, the Chancellor insisted that the private sector would make up the shortfall. A recent report by KPMG, however, shows that over a quarter of private sector jobs pay less than the living wage, compared with less than 10% in the public sector. Is it any surprise to the Chancellor that in-work poverty has risen in my constituency?”

The Chancellor did not answer Emma’s point about living standards, but instead tried to claim that unemployment was falling in South Shields.

However, unemployment in the constituency actually rose by nearly 1,000 during the first eighteen months of the Coalition, to over twice the level it had been a decade before. And as Emma pointed out in Parliament, under this Government being in work is no longer a reliable way of avoiding poverty.

Commenting after the Autumn Statement, Emma said:

“What the Chancellor doesn’t understand is that his claims of recovery are meaningless until people start to feel the difference, and right now the situation for working people is getting worse, not better.

“Coalition cuts to the public sector mean that people are being forced to take lower-paid, less secure jobs in the private sector. That means that hard-working constituents in South Shields are seeing their incomes fall at a time when essential costs like food and energy are rising.

“Nationally we’ve seen a million extra people fall into poverty since David Cameron entered Downing Street. In South Shields over 5,000 children are living in poverty, and the majority of those are from working households. That is what happens when wages are allowed to stagnate while prices skyrocket.”

KPMG reports that 27% of private sector jobs pay lower than the Living Wage of £7.65 per hour, compared to just 10% of public sector jobs. Many jobs in the private sector are part-time, where the figure rises to 43%.

Over a third of people earning less than the Living Wage report that their financial situation has worsened in the last 12 months, while more than half expect the situation to get worse still in 2014.



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