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'We'll end in-work poverty in our first term,' Labour pledges

LABOUR will end in-work poverty by the close of its first full parliamentary term with an ambitious investment and empowerment programme unveiled today.

Shadow chancellor John McDonnell will say that a three-pronged approach would be needed to tackle the “modern-day scourge” of poverty.

This would include raising the minimum wage to £10 an hour, ending austerity and boosting public spending on services such as free childcare, bus travel for young people and school meals, as well as halting the roll-out of so-called benefits reform through universal credit.

At the launch of the Resolution Foundation’s Living Standards Audit this morning, he will say: “Behind the concept of social mobility is the belief that poverty is OK as long as some people are given the opportunity to climb out of it, leaving the others behind.

“I reject that completely, and want to see a society with higher living standards for everyone as well as one in which nobody lacks the means to survive or has to choose between life’s essentials.

“Ending poverty won’t just be done in the workplace. We need to make sure the essentials of life are never denied to people because of their circumstances.

“So parents aren’t forced to choose between feeding themselves and feeding their children or the unemployed teenager doesn’t give up on job interviews because they cost £5 in bus fares each time.”

Mr McDonnell will quote the Joseph Rowntree Foundation (JRF) which refers to such poverty as “the problem of our times.”

JRF executive director Claire Ainsley welcomed Mr McDonnell’s upcoming pledge. She said: “Research for JRF this week shows how low-income families are still feeling squeezed.

“They feel as negative about their family’s economic situation as during the 1992 and 2008 recessions and, for most, economic concerns are the most significant issue driving how they vote.

“This underlines the need for political parties to seize this agenda and set out comprehensive plans to improve living standards, tackle the cost of living and support struggling towns and cities.

“Delivering this commitment should be the number one focus for political leaders after Brexit. That way we can bring the country back together and ensure everyone has the opportunity to build a better life.”

TUC general secretary Frances O’Grady told the Star that in-work poverty is caused by a lack of fair wealth distribution rather than a lack of wealth itself.

She said: “We need to redesign the economy to make it fair again, and that means giving unions more power to negotiate a fair deal for working people.”

Mr McDonnell’s policy reveal comes as a Resolution Foundation audit report shows household incomes tightening more in recent years than during the recession of the 1990s.

Typical household incomes are estimated to have fallen by 0.5 per cent between 2016-17 and 2018-19.

This is far weaker than the 0.3 per cent growth seen between 1991 and 1993 when the economy was in recession and then recovering from it, the report says.

The think tank warned that, while households have managed to boost their incomes by working more, they may be “running out of road” to improve their situation in this way.

It said that just as the expansion of paid maternity leave and free childcare has supported family incomes over the past 25 years, new policies will be needed including reforms to universal credit to better support second earners in households — mainly women — in work.

Resolution Foundation senior economic analyst Adam Corlett said that “an economic approach that supports higher incomes for all households must be the top domestic priority for the incoming PM.”

A government spokesman claimed that the lowest-paid have been given an “almost 5 per cent pay rise” by an increase in the so-called national living wage, and that 1.74 million people have been taken out of income tax.

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