Tax credit cuts: food budgets will feel the squeeze first

The furore over tax credits has called the prime minister’s pledge of an “all-out assault on poverty” into question. In the House of Commons today, the Prime Minister shed no new light on the extent to which the planned tax credit blow will be softened. Pursuing these cuts to tax credits could leave many more people without secure access to adequate food.

The Fabian Commission on Food and Poverty has spent the last year travelling around the country hearing from experts, people living in poverty and those working in the food system about the relationship between food and poverty and how the UK can build a fairer food system. Today marks the publication of the Commission’s final report, Hungry for Change.

The commission uncovered a crisis of food access for many of the poorest households in the UK. Even before the planned tax credit changes, we heard of multiple cases of parents going hungry to feed their children. Many people on low incomes were having to prioritise calories over nutrients to afford their weekly shop. These issues show that as well as over one million instances of food bank use last year, there are many more people struggling to put decent food on the table for them and their family.

The potential tax credit changes risk leaving those on the lowest incomes between £800 and £900 poorer. The report shows that this sudden drop in disposable income for some of the most vulnerable people in the country could leave many struggling to stay above the breadline.

A lack of disposable income puts up a huge barrier to being able to acquire, cook and consume an adequate diet. This is because food is the most flexible part of the household budget: it can be squeezed in ways housing or energy can’t be. It also means that when household budgets of the poorest are hit – as the tax credit changes threaten to do – it’s the food budget that takes the strain.

The squeeze on food budgets and the prioritisation of calories over nutrients is key to the historic link between poverty and bad diet-related health. Today’s report shows that during their lifetime, people on low incomes are one and a half times more likely to develop diabetes than those on an average income, and children growing up in low-income households are three times more likely than average to be obese.

The costs to the health service of treating diet-related poor health are enormous. Referring to official government documents, the commission’s report details the £6.3 billion spent by the NHS treating obesity and conditions related to being overweight. This is scheduled to rise to £9.7 billion in 2050. Given the clear links between low income and bad diet-related health, the tax credit changes risk coming up short in making the public finance savings they are designed to achieve.

The Fabian Commission’s report sets out a 14 point plan for Westminster, devolved and local governments to ensure everyone in the country has secure access to decent food. Eliminating hunger and ending the anxiety that comes with not knowing how you are going to go on feeding the family requires a coordinated approach from government, which is why we have called for a new Minister with responsibility for ending the need for food banks by 2020.

Key to the recommended strategy is an acknowledgement that the biggest barrier to secure access to nutritious, affordable food is low income. With food prices potentially set to rise in the future, boosting the incomes of the poorest is becoming more critical than ever. This requires long-term change, but right now the government can demonstrate its commitment to this goal by cancelling tax credit changes which could make things worse rather than better for low-income households.

William Beveridge’s seminal report that laid the foundations of the modern welfare state called for a ‘subsistence level’ to which nobody should have to fall below. Today, as food bank use accelerates upwards, and many more people are going hungry or struggling to access nutritious food, it is right to ask serious questions about how many people are beneath this level. The final report of the Fabian Commission on Food and Poverty charts a course to ensure everyone in the UK can be well-fed – surely a key indicator of ‘subsistence’. What we need now is the political will to make it happen.