Lesson 4 - Reasons to Explain the Existence of Poverty Learning Intentions (Pupils should be able to:): Explain what is meant by the term ‘social exclusion’ Explain reasons, both political and social / economic, for the continued existence of poverty in the UK

Social Exclusion ‘Social exclusion’ is a phrase used to describe the lives of people who are not benefiting from progress in society. In some ways, social exclusion is the modern term for a lifestyle of poverty and deprivation. People who are ‘socially excluded’ are more likely to: Lack employment Have poor employment and social skills Live on a low income Not value education Have poorer housing and health Live alone

What Causes Social Exclusion? The causes of social exclusion are complicated. Arguably, social exclusion has been partly caused by the policies of successive government. On the other hand, changes in employment patters, attitudes within society and the lifestyle choices of individuals, can also result in people becoming socially excluded. What is without argument is that social exclusion has increased in the last 20 years. Note: Recently, there has been a great deal of debate over the extent of social mobility in the UK. Social mobility is the term used to describe people moving up the social scale. Although it is possible for people to ‘rise and go’, many people believe social mobility has declined in recent years.

Reasons to Explain Social Exclusion 1. Policies of Government Tax Policy. One aim of the tax system is to be progressive. This means those with the most income should pay the highest proportion in tax. Between , when the Conservatives were in power, policies that reduced taxes on the rich were a priority (regressive taxation). This resulted in the tax burden, the amount of tax paid as a proportion of all income received, being shifted from the richest to those on modest incomes. Under Labour, since 1997, taxation has increased on middle/higher earners but only reduced marginally on those on the lowest incomes. Examples of regressive taxation - increasing VAT (paid on purchase of most goods) from 8% to 15% and then to 17.5%. Reduction in top earners tax to 40% from 83%.

Example of progressive taxation - Labour cut income tax for lowest earners from 22% (standard rate) to 10%. But then made huge mistake in April 2008 when they abolished 10p tax rate. The standard rate of tax also fell to 20p in £. 10p tax rate. Benefits - A wide range of social security benefits are paid to those in need. In the past, benefit rates used to rise in line with earnings so when those in work became better off, so did those on benefits. However, the Conservatives broke the link between benefits and average earnings and instead benefits were to rise in only line with inflation, leaving those dependent on benefits relatively worse off. Labour has not restored this link update – October’s spending review has received a mixed response. While there is recognition that the budget deficit needs tackled, critics of the government claim the poorest groups will see their incomes fall disproportionately more as the welfare budget has been cut by £18 billion.

Reasons to Explain Social Exclusion 2. Social / Economic Reasons Unemployment rates in the UK are, at the time of writing, historically low. However, the number of workless households dependent on benefit has soared (lone parents, pensioners, those on Incapacity Benefit, etc.). For many work ‘no longer pays’ or is impossible to secure. Note: A ‘Cycle of Poverty’ often occurs within the poorest groups in society. Poor child in workless household / few expectations / low self-esteem / poor educational attainment / unemployment or low pay...etc. Employment Patterns. As technology has impacted on work, some people with skills (IT, management, finance, etc.) have seen incomes rise but those with the least education or skills have seen incomes fall. Many of these people can only secure low paid, part-time employment.

Housing. Councils or housing associations are the main accommodation providers for those on low incomes. However, those who are ‘socially mobile’ (i.e. the successful people) combined with government’s failure to build enough affordable homes (SNP changing this), ‘social housing’ has increasingly been of the poorest type in the poorest areas e.g. peripheral housing estates or inner city. Poor housing is closely linked to social exclusion: poor housing (multis/tenements on ‘sink’ estates), leads to poorer health (damp, overcrowding, etc.), greater likelihood of suffering crime, ‘sink schools’ with low educational attainment, etc. Homeless people are in all ways socially excluded.

Questions 1.What is meant by the phrase ‘social exclusion’? 2. Describe the characteristics of someone ‘socially excluded’. 3. Explain the difference between progressive and regressive taxation. Give examples in your answer. 4. Why might successive governments be accused of increasing social exclusion? Make two points. 5. Complete a spider diagram to show the economic and social reasons for social inclusion. Reading “Modern UK Social Issues” pages

2009/10 Update The recession has markedly increased inequality. With the number of unemployed people rising to 2.47m in Sept. ‘10 or 7.9% (Scotland 0.239m or 8.9%) of all working people. In the age group, around 1m people are now unemployed.unemployed people rising to 2.47m The last UK Government allowed borrowing to rise sharply to fund benefit payments and maintain spending to keep the economy going. It has also ‘nationalised’ the banks but many economists expect the government to sell its shares in the banks when the economy recovers. Further, the Government increased the income tax rate to 50p in the pound (£) on those earning £150,000 from April 2010.increased the income tax rate to 50p Con./Lib Dem. October Spending Review will result in big reductions in welfare payments with the poorest groups, arguably, being proportionately worst hit.