'Government must do more to end in-work poverty'
A think tank has called on the government to do more to end in-work poverty.
The Smith Institute has pointed to Department for Work and Pensions figures showing the vast majority of new housing benefit claims have come from employed claimants.
Between May 2010 and February 2012 the number of housing benefit claims increased by 252,970, in which around nine in 10 (227,640) were from people in low paid work.
The think tank said the figures show that falling incomes and rising living costs are pushing people below the poverty line. A spokesperson for the think tank said: ‘In some places, like London, real rents are rising, at the same time real wages are falling.’
The Smith Insitute also pointed to figures from the Family Resources Survey, carried out by the Office for National Statistics, showing that the number of people in work living in households in poverty, defined as 60 per cent of median national income after housing costs, have increased from 2.3 million in 1996/97 to 3.3 million in 2009/10.
Paul Hackett, director of the Smith Institute, said: ‘The government can no longer ignore this rapid rise of in-work poverty.
‘More and more people are being pushed to the margins of the labour market, where pay is not enough to live on.’
The Smith Institute has calculated that if in-work claims continue to rise, the annual housing benefit bill will increase from £22 billion to around £25 billion by 2015.
Prime minister David Cameron yesterday suggested housing benefit could be cut for people under the age of 25.