People with mortgages are the 'new poor'

WORKING families with mortgages and the struggling self-employed are the 'new poor' to emerge from a select committee report on poverty during the Thatcher years.

The report, Low Income Statistics: Low Income Families 1979-1989, published by the Social Security Committee yesterday, shows a striking new trend in the type of people classified as living below the poverty line.

The figures, which the Government did not want published, show the number of families that have a full-time worker living on incomes of less than the basic unemployment benefit rate has doubled from 470,000 to almost one million over a decade.

Researchers from the Institute for Fiscal Studies revealed that about half the 970,000 families with a worker living below this poverty line were self-employed and two-thirds of them - 620,000 - had mortgages. In 1979, of the 470,000 working families below the poverty line, fewer than half - 200,000 - had a mortgage.

Home owners on low incomes have been ensnared in the poverty trap because of benefit rules. If they were unemployed and receiving Income Support, the Department of Social Security would pay the mortgage interest. But interest will not be paid for those in full-time work - defined as working over 16 hours a week.

Also, people on low incomes who live in rented accommodation are entitled to Housing Benefit, which pays a substantial proportion of the rent, but working people with mortgages get no such assistance.

Steve Webb, an economist who conducted the research, said that if the DSS paid building society interest for employed people with mortgages, almost 500,000 of the 620,000 would not be below the poverty line.

He said: 'The groups we have traditionally thought of as being poor, such as pensioners, are tending to get better off and their place is being taken, in part, by a new poor such as lower paid workers with mortgages and the self- employed.'

Charities working with families living below the poverty line, such as the National Association of Citizens' Advice Bureaux and the Children's Society, confirmed that the biggest increase in poverty was among people with mortgages. Ian Sparks, the Children's Society director, said: 'Unlike families on Income Support, those in low-paid work get no help with mortgage interest repayments. They get into extreme difficulties and this often leads to the repossession of their homes.'

Ministers believe the Government will have to tackle the plight of house-owners who cannot afford their mortgage repayments as a priority for winning back wavering Tory voters.

They fear the collapse of confidence in the housing market has undermined support for the Tory party among many home-owners who purchased their homes under the Thatcher right-to-buy legislation.

One former ministerial policy adviser said the Government should consider replacing mortgage tax relief - no longer regarded as a taboo area - with a new benefit directed at the low-paid facing difficulties in paying.

Peter Lilley, Secretary of State for Social Security, is believed to be preparing a wide-ranging review of benefits.

Launching the report, which showed that the number of people living on incomes even lower than state benefit rose by almost 50 per cent to three million, Frank Field, the committee chairman, called for a review of the effectiveness of the welfare state, which spends pounds 80bn on benefits a year.

Low Income Statistics: Low Income Families 1979-1989; HMSO; pounds 10.

Life and Style
“What is it like being a girl?” was the question on the lips of one inquisitive Reddit user this week
peopleDave Legeno, the actor who played werewolf Fenrir Greyback in the Harry Potter films, has died
Arts and Entertainment
Armando Iannucci, the creator of 'The Thick of It' says he has
tvArmando Iannucci to concentrate on US show Veep
Life and Style
Have you tried new the Independent Digital Edition apps?
ebookA unique anthology of reporting and analysis of a crucial period of history
Luis Suarez looks towards the crowd during the 2-1 victory over England
Life and Style
Swimsuit, £245, by Agent Provocateur

Diving in at the deep end is no excuse for shirking the style stakes

German supporters (left) and Argentina fans
world cup 2014Final gives England fans a choice between to old enemies
Arts and Entertainment
A still from the worldwide Dawn of the Planet of the Apes trailer debut
peopleMario Balotelli poses with 'shotgun' in controversial Instagram pic
A mugshot of Ian Watkins released by South Wales Police following his guilty pleas
peopleBandmates open up about abuse
Basketball superstar LeBron James gets into his stride for the Cleveland Cavaliers
sportNBA superstar announces decision to return to Cleveland Cavaliers
Javier Mascherano of Argentina tackles Arjen Robben of the Netherlands as he attempts a shot
world cup 2014
Arts and Entertainment
The successful ITV drama Broadchurch starring David Tenant and Olivia Coleman came to an end tonight
Four ski officials in Slovenia have been suspended following allegations of results rigging
sportFour Slovenian officials suspended after allegations they helped violinist get slalom place
14 March 2011: George Clooney testifies before the Senate Foreign Relations Committee during a hearing titled 'Sudan and South Sudan: Independence and Insecurity.' Clooney is co-founder of the Satellite Sentinel Project which uses private satellites to collect evidence of crimes against civilian populations in Sudan
Arts and Entertainment
Balaban is indirectly responsible for the existence of Downton Abbey, having first discovered Julian Fellowes' talents as a screenwriter
tvCast members told to lose weight after snacking on set
Life and Style
More than half of young adults have engaged in 'unwanted but consensual sexting with a committed partner,' according to research
Life and Style
A binge is classed as four or more alcoholic drinks for women and five or more for men, consumed over a roughly two-hour period
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General


£50000 - £70000 per annum: Harrington Starr: Business Analyst Consultant (Fina...

SAP Data Migration Consultant

competitive: Progressive Recruitment: My client, a FTSE 100 organisation are u...

Programme Support, Coms, Bristol, £300-350p/d

£300 - £350 per day + competitive: Orgtel: My client, a leading bank, is curre...

Linux Systems Administrator

£33000 per annum + pension, 25 days holiday: Ashdown Group: A highly successfu...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice