£20m social investment to fight poverty for 'Brexit children'

The Joseph Rowntree Foundation (JRF) and Big Society Capital announced this week that they aim to raise up to £20m of social investment to tackle the ‘poverty premium', which sees poorer people paying more for everyday goods and services such as gas, electricity and financial loans.

The pledge comes on the back of the JRF’s call for a new deal between governments, business and the public to solve poverty in a generation. JRF wants to see the first cohort of 'Brexit children', those who start school this autumn, enter adulthood into a 'poverty-free', 'prosperous' UK. 

The call is timely in the week that both the UK prime minister Theresa May and minister for exiting the European Union David Davis were criticised for lack of detail about the government's plans for Brexit.

Ending the poverty premium is one part of a five point plan that JRF published this week to tackle poverty. It calls upon the prime minister to 'make good on her promise "to make Britain work for everyone".'

Big Society Capital CEO Cliff Prior said: "How can it be that thousands of people living in poverty pay more than £1,000 extra each year for even the most vital services such as gas, electricity and loans?

"Big Society Capital is keen to work with JRF and our co-investors to support charities and social enterprises in financing ventures that can provide fair and affordable alternatives."

The 'poverty premium' is a term that covers situations where less credit-worthy citizens are excluded from good deals for services. These can include power supplies and mobile phone tariffs. The term can also cover issues like lack of access to the internet, which further inhibits someone's capacity to research cheaper offers.

The cost of poverty

Chief executive of the JRF Julia Unwin said: “It’s shameful that in the 21st century, 13 million people in our wealthy country are living in poverty. Poverty divides communities and generations; it harms people’s potential and strains families; it drains the public purse and holds back our economy."

Poverty is defined by the foundation as ‘When a person’s resources (mainly their material resources) are not sufficient to meet their minimum needs (including social participation).’

JRF states that poverty costs the UK £78 billion a year, £1,200 for every person and equivalent to 4 per cent of the UK’s GDP. £69 billion of this figure is spent on public services needed to pick up the pieces dealing with poverty – £1 in every £5 spent on public services.

Alongside the proposal, the JRF has released results of new polling which shows that the public see poverty as ‘everybody’s business’, 90% see national government as having an important role in dealing with poverty and 70% a job for businesses.

Photo credit: mendhak