Finding ways to end the toxic impacts of poverty: our first Festival of Ideas event

24 February 2023
By Ed Davie
Ed Davie

A minimum income guarantee, where more generous social security prevents anybody from falling below the poverty line, was the most popular suggestion at our first Festival of Ideas event this week.

Three brilliant speakers pitched policy suggestions for ending poverty to improve mental health to an online audience of over 100 people. Other popular ideas included licensing landlords to ensure they provide housing as a service, not just for profit, and ensuring free education at all stages and a good job guarantee. The Centre will incorporate these ideas into our work including lobbying central government.

Our Festival of Ideas series is bringing people together to discuss solutions to the ‘five giants of mental health’ (a reference to the Beveridge Report which paved the way for the post-war NHS and welfare state). In future events we will be exploring racism, giving children the best start, the climate crisis and mental health services. You can sign up to the next event on racial justice on 21 March.

Our interim chief executive Andy Bell opened the festival by drawing attention to our recent policy briefing on poverty, economic inequality and mental health which highlighted evidence showing that not having enough money causes and worsens mental ill health in numerous ways. For example, children living in the worst deprivation are 12 times more likely to experience multiple adverse childhood events, which in turn massively increases their risk of developing serious mental illness. And we know that children from the poorest 20% of households are four times more likely to experience a mental health problem than those living in the wealthiest 20%.

Rachelle Earwaker (chief economist of Joseph Rowntree Foundation) shared the latest analysis from their recently published UK Poverty Report. Rachelle drew attention to the fact that the £20-a-week Universal Credit uplift introduced during the Covid lockdown period reduced poverty, proving that simple government interventions can make a big difference. With the end of the £20 uplift, the worsening cost-of-living crisis and the legacy of cuts to services, the number of people living in deep poverty (unable to afford essentials like food, heating and shelter) has risen to over seven million – more than 10% of the population. Poverty rates are worse for families with children (especially those with three or more children), households with a disabled person including mental health difficulties, and for Bangladeshi, Pakistani and Black Caribbean and African communities. Rachelle drew attention to a new JRF campaign to ensure that everyone had access to the basics of life which Centre for Mental Health will be supporting.

The Festival then heard from Tom Pollard, a mental health social worker and policy researcher, who has conducted studies with people using food banks. Tom said he first became interested in the connection between mental health and poverty when he was able to afford private therapy which, along with having stable housing, a good support network and other privileges, supported him to recover from his own mental health struggles in ways that people with less money may have been unable to benefit from. Respondents to his food bank user research described how their perilous financial situation left them constantly stressed and unable to function effectively, making it harder to get out of the poverty and illness trap they found themselves in.

These views were echoed by our third speaker, Folashade Alonge-Obasuyi, a psychotherapist and counsellor, currently leading a mental health project for Black African women working with the NHS in Greater Manchester. Folashade explained how the people she worked with had their mental health further harmed by a combination of poverty, racism, immigration issues and a lack of culturally-informed health care. Folashade called for an end to the ‘hostile environment’ that makes life much harder for already-vulnerable people, suggesting that there should be more opportunities for people to connect with support and other people to lift themselves out of poverty and ill health.

All our speakers stressed that it was a myth that harsh measures and the threat of destitution ‘scared people into work’, emphasizing that everyone they worked with wanted the opportunity of a good job and income.

Question and answer

Our panel answered lots of brilliant questions put forward by delegates, but we’ve taken the opportunity to address some of the remaining questions below.

Could you explain more on the differences between universal basic income and guaranteed minimum income?

The main difference between Universal Basic Income (UBI) and a Minimum Income Guarantee (MIG) is that UBI is not means tested – people receive it regardless of their income. MIG, on the other hand, follows the principle of targeting – i.e., it is only paid in full to people on low incomes. As income from other sources increases, MIG payments are withdrawn.

Universal Basic Income is ‘universal’ in the sense that everyone would receive it regardless of wealth or income in the same way that most NHS provision, for example, is universal. Universal Basic Income proponents argue the universal element stops a ‘cliff edge’ where people suddenly lose their additional state income when they earn more money from work, and would reduce stigma around receiving social security.

A Minimum Income Guarantee would not be universal and would effectively be used to increase social security paid through Universal Credit, for example, to ensure a decent standard of living. The Living Wage Foundation puts this figure at between £21,000 and £23,000 per adult per year. This makes Minimum Income Guarantee much cheaper than Universal Basic Income but, opponents could argue, ‘disincentivises work’. Interestingly, evidence seems to suggest UBI is not linked to decreases in labour supply. Moreover, proponents of UBI usually suggest it in parallel with other policies, such as adjustments in corporation and top income tax rates, or abolition of personal allowances. This is in order to recover UBI sums attributed to those in the higher end of the income distribution, while also increasing proportionality in the fiscal system.

Some kind of tapering, where a stepped level of social security tops up earned income up to a certain salary level would be necessary to reduce a ‘cliff edge’ effect when people got into work. Other places such as Denmark are much more generous with their social security (which is set at about 90% of in-work income) and their minimum wage (about £20 per hour), virtually eliminating poverty and improving health outcomes – so it can be done.

Is there is a difference between toxic poverty and poverty?

All poverty is ‘toxic’ or harmful to health. UK scientists including Michael Marmot, Kate Pickett and Richard Wilkinson have long established that the greater the wealth gap, the worse the health outcomes for the population. In other words, not only is poverty bad or toxic for our health, , but also economic inequality is corrosive for everyone in that community and society. Countries with the biggest wealth gaps such as the US and the UK have much worse health outcomes than places like Scandinavia and Japan which have similar wealth overall but more evenly distributed.

The government, through the NHS Long-Term Plan, boosted mental health services by £2.3 billion each year. Where is this money being targeted and how much money would be adequate to have a positive impact?

While any additional investment in mental health services is to be welcomed, the current level of growth in demand for services cannot be met even with substantial additional investment, and the unmet need gap will continue to grow. One reason for this is that it takes years to recruit and train the right workforce. But also, demand for services is partly driven by rising poverty and economic inequality. Unless the government reduces poverty, as it managed to do when it increased Universal Credit by £20 a week during the Covid lockdowns, then mental ill-health and the unmet need gap will continue to worsen. Ending poverty would cost approximately the equivalent of half of the current NHS budget – a lot of money – but it would be recouped quickly in improved health and other outcomes, in turn improving productivity and reducing demand on expensive services.

What can local authorities be doing to help local people in poverty and struggling with health and cost of living? Are local health authorities sufficiently enabled to support people and improve outcomes?

The Centre has produced guides for both councils and integrated care systems on how they can help address poverty and other factors that contribute to poor mental health. All ‘anchor institutions’ rooted in their communities like councils, NHS trusts and universities, should get Living Wage Foundation accredited, use social value procurement to buy and hire more locally, offer financial advice in every interaction with residents, and help reduce costs with generous council tax relief schemes, adult education, childcare, insulation, active travel and other schemes.

How do we get across to politicians and leaders that addressing poor mental health is not just about more mental health services and that we need a different kind of conversation about how to tackle mental health?

This is the crucial question. While anyone can experience mental health problems, our chances of doing so are not equal. At a population level, poverty massively increases mental ill health and other risks. And while increased investment in mental health services is crucial to address poor mental health, to truly address the scale of the problem, Government must tackle the key causes of it, such as poverty. There are lessons to be learnt from other public health successes: campaigners have made some headway, for example, in getting politicians to recognise that unhealthy weight is not just about individual choice but also about the environment people are in.

If a regular basic income could be provided, how would you deal with recipients with problematic substance use issues who do not wish to engage with support services?

In countries like Finland, that provide a ‘Housing First’ model for people experiencing homelessness often combined with mental ill health and substance misuse, over 90% remain settled and recovering to a greater or lesser extent. In the end you cannot eradicate all illness and distress, but you can create the optimal conditions for health and support with a fair and equal system.

Between 30% and 50% of people with schizophrenia are capable of work but only between 10% and 20% are in employment. Many want to work. Radical idea – having supported and targeted employment and education opportunities which offer flexibility and understanding for people with any long-term conditions as well as severe mental illness

We believe that anyone with a mental health difficulty who wants paid work should get the support they need to find it. The evidence-based Independent Placement and Support model makes this possible. It’s also important to remember that whilst ‘good’ work is good for people, ‘bad’ work is bad for health, and people should never be coerced into jobs that will make them more ill. It’s also essential to reform the social security system so that people are not subject to unsafe and ineffective conditions, or the threat of sanctions, in order to receive the benefits they’re entitled to.


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