Poverty has many faces

Northern Ireland has the lowest poverty of any UK region.

This is according to new research from the Joseph Rowntree Foundation (JRF). Are you startled? You shouldn’t be; previous JRF research has identified the same thing.

This sounds like good news (for Northern Ireland) but, while it’s not a bad thing, the matter is complicated.

Firstly, an estimated 320,000 people are in relative poverty, which is no small number.

Secondly, there is one reason and one reason only why NI compares favourably with the rest of the UK: relatively low housing costs. The other major factors that determine poverty levels are local weaknesses, leaving NI vulnerable to a worsening position.

Thirdly, while the tentpole, high-level figure looks good, individual peoples’ own experiences will be more complicated and more varied than can be illustrated by one single statistic.

Other new research points to high levels of stress and anxiety about the rising cost of living, and that poorer households are suffering from a continuing decline in discretionary spending power – which has plummeted by almost 50% in a year.

Report

JRF’s model for characterising poverty is one of the most commonly-used and most sensible: relative poverty after housing costs.

Any household with an income of lower than 60% of the median household income (after housing costs) is considered to be in poverty. This figure is weighted for the number of people living in a given household (because more people need more money to live).

According to the latest figures in the organisation’s UK Poverty 2023: The essential guide to understanding poverty in the UK, 17% of people in NI live in poverty.

That compares with 18% of people in Scotland, the region with the second lowest poverty rates, 24% in Wales, 20% in the South East of England and 25% in London.

The region with the highest rates of poverty is North East England (26%).

Previously, JRF identified four factors that play a key role in either tackling poverty (if they are going well) or seeing it increase (if they are not):

1. Having as many people as possible in good jobs
2. Improved earnings for low-income families
3. A strong benefits system
4. Having enough affordable housing

JRF’s report says: “Northern Ireland has the lowest poverty rate (17%) of the four nations, despite having the lowest rate of employment, as well as high rates of low-paid employment and proportion of families receiving Universal Credit or equivalent (legacy) benefits that is comparable to Wales, the North of England and the West Midlands, which have much higher poverty rates.

“The lower poverty rate in Northern Ireland is predominantly explained by the lower cost of housing. The proportion of people living in rented accommodation in Northern Ireland is the lowest across the four nations, and the average (median) weekly housing costs paid by low-income social and private renting households is the lowest of anywhere in the UK.”

It’s worth noting that, when it comes to benefits, although we are comparable to other parts of the UK – given our benefits system is essentially an extension of the one designed and managed in Westminster – Stormont has in the past supplemented this with extra payments from local coffers.

Regardless, while JRF’s model is a good one, there is more to poverty than such high-level analyses.

Other takes

A recent survey from consumer organisation Which? identified several areas where Northern Irish households are under greater stress and anxiety than other parts of the UK.

Consumers in Northern Ireland 2023 - A cost of living crisis briefing found that 88% of local people are concerned about fuel prices (a higher percentage than anywhere else in the UK), and

Financial difficulty is rising, with 63% of consumers in Northern Ireland saying their household had to make an adjustment to cover essential spending in the last month – compared with 46% last year – a higher percentage than in the other UK nations.

Meanwhile, 49% of consumers in Northern Ireland said that concerns around the cost of living have left them feeling anxious, again a higher rate than in England, Scotland or Wales.

The Which? report says: “The proportion [of people] worried about housing costs has also risen. Both mortgage holders and renters had high levels of worry about housing costs, at 82% and 83% respectively.

“Worry about housing costs has historically been lower among mortgage holders than renters, but this difference narrowed significantly this year as rising interest rates have sharply increased worry among mortgage holders.”

UUP MLA Andy Allen responded to this research by saying he wants to see short-, medium- and long-term measures enacted to tackle both rising energy costs and the general cost-of-living crisis, and called for an Executive to be formed at Stormont.

“All the challenges faced are, without a doubt, exacerbated by the continued lack of leadership at Stormont or from Westminster as a last resort. With departments being allowed to drift rudderless without ministers whilst facing significant budget pressures, the possibility to create targeted responses to support the most vulnerable is limited…

“I, along with 89 others were elected by our constituents to be the vehicle that identifies and supports those in most need, to protect and transform our Health Service and deliver effective help to those suffering most across all aspects of their daily lives.”

Consumer Council

Another recent look at local household finances came from the Consumer Council.

The organisation’s Northern Ireland Household Expenditure Tracker Q3 paper found that discretionary income in the lowest-earning households is down by 46.7% compared to last year (from £37.11 to £19.78), meaning they have less than £20 per week to spend after bills and living expenses.

According to their research, NI households with the lowest incomes:

• saw their weekly income after tax rise by only £1.66 (0.7%)
• experienced weekly spending on basic goods increase by £4.14 (2%)
• spent 54% of their total basic spending on rent, energy, food and transport
• saw their discretionary income fall for the 6th consecutive quarter leaving these households with less than £20 per week to live on (£19.78)

Consumer Council CEO Noyona Chundur said: “We first published the Household Expenditure Tracker last year, and with each publication, we have seen a decline in discretionary income for Northern Ireland’s lowest earning households.

“The statistics within the Household Expenditure Tracker quantify what we already know and are seeing on a daily basis: that consumers are significantly struggling at the moment.

“The Household Expenditure Tracker shows that despite an increase of basic spending across all four income quartiles, it was only those in income quartiles 1 and 2 that experienced a further decrease in discretionary income.”

Persistence

While Northern Ireland remains the region with the lowest rate of poverty in the UK, the poverty experienced by less-well-off households seems to be getting worse.

Furthermore, looking at JRF’s four factors for determining poverty, it seems we have little chance to improve the situation.

The local economy and local wages do not appear set for some jet-fuelled trip up, up and away. The benefits system won’t be changed at Westminster any time soon – and Stormont remains utterly non-functioning (and the availability of money for any further mitigations would be in doubt anyway).

What’s left is housing. That could get cheaper – but is that what we’re left to cheer on? A collapse in an already (relatively) modest housing market? That could being some benefits (and cause some problems) but, as an aspiration, it’s not really good enough.

When it comes to poverty, Northern Ireland has a headline figure that is positive. A look below the surface, however, and the challenges become clear.