Poor Families Pay A ‘Poverty Premium’

January 11, 2011

Save the Children revealed today that low income families are still paying more than wealthier families for basic goods and services, paying out nearly £1,300 more each year – a rise of more than 20% since the survey was last carried out in 2007. Services for the poor, from energy to insurance, carry a much higher premium and the poor are particularly susceptible to the robbery level interest rates charged by the legal-loan-sharks – or even, if they’re fortunate enough not to have to rely on the real deal!

The worst offenders are energy companies who charge a ‘poverty premium’ for their services. As the Save the Children article says:

Around 20% is the rising cost of gas and electricity . Average bills for poorer families are £1,134 per year, compared with £881 for wealthier families (before the latest hikes in heating prices are even taken into account). It’s feared that by 2020, the energy poverty premium could be as much as £1,800 per year. Many parents have to choose between a hot meal or heating. Cold living conditions increase children’s susceptibility to illness and damages respiratory health. Education is also affected if there is no warm, peaceful space to do homework.

“You have to prioritise heating because you have to have the house warm enough for kids”. – Lana, mum of two.

It seems very Kafka-esque to punish the poor with financial penalties for being poor (something that every single private company and local authority does on a regular basis), but in essence that’s capitalism – an all out war against the poor!

The only real, long-term defence is to organise against the rigours of capitalism. In impoverished communities this would mean regaining control of the local economy to stop the outflow of money, skills and resources. Most importantly we need to focus on creating bulk-purchasing groups for poorer communities, localised production of food and energy and re-skilling people so that communities are allowed to become ever more self-sufficient.

All debt – whether to privatised companies or central government – is a form of social cancer that debilitates both individuals and communities making them over-reliant on outside influences. Doncaster council – and the usual grant monsters who share their bed – have relied on hand-outs for too long and have failed to use the millions spent in regeneration funding to strengthen the local economy to the degree that we can operate without further hand-outs. Now that our region is facing some of the biggest spending cuts anywhere in the UK we’re screwed – unless we choose to organise effectively.

By effectively we don’t mean placards and protests. Fighting the cuts (aka neoliberal sructural adjustment policies) is important, but we must be honest and admit that ALL of the mainstream parties are comitted to implementing the same policies (the only difference being timescale), so it is unlikely that we will succeed in stopping all but the most  vile of ConDem policies (which will be successes in their own right, but not of the kind which impoverished working-class communities really need). Long term the only hope is to organise sustainable, self-sufficient working class communities. We need something similar to the Transition Town movement, but with a much higher degree of class consiousness and the balls to oppose both the local authorities and the business sector if they stand in our way.

For more details check out the Trapese Collective‘s ‘Rocky Road to Transition


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