Oldham MP backs calls for national living income

Oldham East and Saddleworth Labour MP Debbie Abrahams is backing calls by the New Economics Foundation (NEF) for a new social security system, consisting of a national living income, which would set an ​‘income floor’ below which no one can fall whether they are in or out of work. 

Analysis released on December 13, 2022, by the NEF shows that two in five families will be unable to afford a decent standard of living by the next general election, and households unable to afford a decent living will fall short by £10,000 a year on average.

The Oldham East and Saddleworth MP, speaking after the launch of the NEF report which she hosted and chaired, said: “By the next general election, 43% of families, that’s 12.5 million households, or 30.6 million people, will be unable to afford the cost of essentials, like putting food on the table or replacing clothes, according to this new analysis by the New Economics Foundation.

“This is an increase of 12 percentage points, that’s 3.6 million families, or 8.9 million people, between the 2019 general election and December 2024.

“Like our beloved NHS service, which is there for anyone in their time of need, we should be thinking the same way about our social security system as it is something we may all need at some time or other during our lives. 

“With that as our guiding principle it is time we took a long hard look at our social security system and ask some tough questions about whether it is fit for purpose in the 21st century.

“From my experience as a member of the work and pensions select committee I can say that we are letting down millions of people, some of the most vulnerable in our society, by not providing enough for them to survive, and that is being exacerbated by the cost of living crisis we are going through.

“This report by the NEF shows how a national living income would set a basic income floor that is enough to meet life’s essentials, which no one can fall below whether they are in or out of work.”

The NEF research uses the Minimum Income Standard (MIS), which is the UK’s leading approach to measuring living standards based on need and is used to calculate the ​‘real’ living wage paid by companies like Ikea and KPMG, and football clubs like West Ham, Liverpool and Chelsea.

The analysis shows the 12.5 million families unable to afford the cost of living by December 2024 includes 88% of single parents and 50% of working families with children.

The average shortfall for families falling short of a decent standard of living standard will have risen from £6,200 a year as of December, 2019 to £10,000 by December, 2024.  

NEF is calling for universal credit (UC) to be replaced by a new social security system, a national living income.

A national living income would set an ​‘income floor’ benchmarked against the MIS, below which no one can fall whether they are in or out of work. 

Under this proposal, over two thirds of the population would see their disposable incomes rise:

For the poorest families, incomes would rise by more than 50% (£500 a month) on average 

For middle-income families, incomes would increase 9% (£200 a month)

For single parents, 18% (£270 a month)

For out-of-work families with children, 36% (£540 a month)

For single people, 8% (£110 a month) 

For severely disabled people, 32% (£740 a month)

Sam Tims, economist at the New Economics Foundation, said: “A decade of cuts, freezes, caps and haphazard migration between systems has left the UK with one of the weakest safety nets among developed countries.

"Millions of families were already living in avoidable deprivation and hardship but as we enter the greatest living standards crisis on modern records, the day-to-day experience of low-income families is set to become even more desperate.

“We need a bold new way of providing income support that will help all people deal with the challenges presented by the fast-changing world we’re living in.

"A national living income would set an income floor that is enough to meet life’s essentials, which no one can fall below whether they are in or out of work.”

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