Today, Sept. 5, Christians Against Poverty (CAP) released 'Deficit budget: the cost to stay alive', a landmark report highlighting that more than a fifth of adults in the United Kingdom (11.8 million or 22%) don't have enough income to pay for their basic needs. The new study based on YouGov polling reveals that each month, CAP clients lack an average of £273 ($360) to cover essential living expenses.
In an exclusive interview with Christian Daily International, CAP Chief Executive Officer Stewart McCulloch outlines the reasons behind the deficit budgets, the strong political will needed to lead people out of debt traps and how churches can take action to support local communities.
One hundred percent of all respondents have told CAP that money worries have harmed their mental health, according to McCulloch, who says the “landmark” aspect of the new CAP report has to do with timing.
“We’re at the beginning of a new kind of Labour Government after 14 years with a particular type of thinking [under the former Conservatives] and we are hopefully at the end of the post-Covid era,” McCulloch explains. “We really feel we’ve got something particular to say because of who we work with every day.”
McCulloch says that CAP wanted to “put a stake in the ground” about the large issue of poverty in the UK. He pointed out a wider international perspective was also relevant with inequality steadily growing in the past two decades in western countries, with exceptions in some Scandinavian countries and “a few others.” The United States in particular is at “the most extreme” with the issue of poverty polarizing society, he said.
“It’s around a quarter of U.S. adults who are living paycheck to paycheck, as they call it in that part of the world and it’s become a real voting block in the US election, which is perhaps not so much the case here.”
Back in the U.K., the fact that 11.8 million people are unable to utilize enough income to pay for life’s essentials is “a landmark to draw at the beginning of this particular point in time.”
McCulloch said the headline inflation rate in the UK peaked at 11 percent and “that was hard on everybody.” The Bank of England tracked inflation at 11% in autumn of 2022 whereas it went down to 2% today, the lowest level in nearly three years.
“But if you look at inflation on the absolute basics of life: food, energy, rent, basic clothing, you know, keeping yourself going, we were probably talking about inflation that peaked three times that,” says McCulloch. “And, if you look at what's happening with renting, rents have gone through the roof.”
As a personal illustration, McCulloch mentioned his own son's recent struggle to find a place to live in London. “It was a war zone.”
“I mean, you’re competing for decent accommodation and prices are skyrocketing. Food has shot up absolutely astronomically over the past couple of years and so a lot of policymakers are focused on the headline [inflation] rates, and the press talks about the headline rate. But actually it’s been far worse for those on very low incomes and on benefits. And they’ve very much underwater.
“People have been talking about inflation dropping, which is definitely a good thing. Please don’t hear that I’m knocking that but all that says is if I’m underwater, I’m going further underwater but more slowly. And what does that mean for somebody on a low income? It’s something like, as for our clients, an average [deficit] of £270 per month. Too little to pay for what we’d call life’s essentials. So that’s pretty underwater.”
Inflation may be going lower, based on what a middle class person would buy, but the recent inflation drop figure to two percent, by way of example, must be compared to other factors in a person’s income needed to survive. For example, McCulloch points out, energy costs in the UK have been hiked again by 10 percent.
“And 10 percent the last time I looked on my calculator wasn’t the same as two percent. So again, in the basket of things a struggling family needs, there’s still an awful lot of pressure in there.”
McCulloch feels uncomfortable with recent statements by British Prime Minister Sir Keir Starmer that the financial situation would worsen before getting better. “Struggling on for another couple of years is a big deal for our clients, particularly those on deficit budgets.”
CAP also asked its clients if the issue of financial worries had affected their mental health, and the unanimous response was 'yes'. “This is having a huge effect on people and from mental health springs physical health, springs all sorts of other things,” says McCulloch.
He says he could “tell you stories that would make hair curl about what it’s like to live below the poverty line.”
“We speak to people all day, every day, literally tens of thousands of them who are living in that way. And we help them as much as we can. So our ploy really is to lift those people to a level where they can afford the basics.”
McCulloch believes that if the government did that, it would have “tremendous benefits” in other areas, such as taking pressure off the National Health Service, education and prisons. “Spend money there and it would save money elsewhere.”
The simple fact is that the U.K. cannot afford to have such a large number of people living in poverty, according to McCulloch. Inequality also comes from a particular perspective in life, which is unaffordable. For example, the welfare bill will be unaffordable in five years' time, according to the government’s own figures, McCulloch says. The same with health and prisons.
“We can’t keep going with this level of inequality and charities like us can keep helping but at some point, somebody’s got to listen and actually do something to solve it. And we must afford to do so!”
CAP is calling for an absolutely level rise in income to ease pressure on clients alongside practical action to get people into work and support them.
“You know, half of our clients are out of work simply because life has hit them in a difficult way through ill health, through relationship breakdowns, through caring responsibilities that they can't share with others. A lot of them are single parents and folk like that can’t afford to work.”
McCulloch was visiting a rural community recently and it looked “very prosperous and lovely.” But people lived in poverty for a simple reason: there was only one bus going in and out of town each day. “So if you wanted a job, how could you get to it, if you couldn’t be on those two busses?”
Simple changes to transport infrastructure in that situation would make a massive difference, opines McCulloch. He wants the Labour Government to listen to debt charities experienced in the field and adhere to such practical suggestions, which are often cost effective, to “take people forward.”
Asked if he thinks that politicians are listening and understand the seriousness of the situation, McColluch said, “The sad fact is, I think they do. That’s what breaks my heart.”
“I think they know the scale of the problem and they know something needs to be done. And I really believe it’s about political will.”
This is where the Church can make a unique and effective contribution, according to McCulloch. He wants the Church to “talk into this.”
“I always remember Galatians 2 when the council of Jerusalem sends Paul off to do his mission that creates the Church that we have today. They asked him to do one other thing, apart from following Jesus, which is to remember the poor. And we have just got to do what we were asked to do, which is to remember the poor.”
McCulloch also calls on the Church to “speak truth” and hold political leaders to account. “Say to them, ‘Look! This is not only unacceptable for people in poverty, often through no fault of their own. It’s unaffordable, unsustainable and needs to be sorted out. And it needs to be higher up the priority list than it currently stands.”
CAP has constructive relationships with the devolved governments of Wales, Scotland and Northern Ireland. The charity is also focused on directing its resources, supporting churches, within “hot spots of poverty”, McCulloch explains, from South Wales towards the city of Bristol, and then Paisley to Gladow, plus other large urban areas.
“I think the Church is starting to get this as well because what they’re saying is where there’s material poverty, there’s emotional poverty, relational poverty and spiritual poverty. At CAP, our role is just to support the Church to help those struggling in their communities. I’d love to reach a point in the near future where if somebody’s struggling they can get real help from their local church and I think that’s increasingly true. The Foodbank movement, for example, has done amazing things.”
McCulloch refers to the old saying, “Don’t give a man a fish, teach a man to fish.” He sees debt advice and forming good financial habits as teaching a person to fish. But the problem with deficit budgets is that CAP gives people advice, optimizes welfare benefits and helps to plan finances but they remain underwater because income is less than outgoings, and “it’s still a struggle.”
A decade ago, the charity could help someone to be in a position to cope and that is what CAP is asking for. Meanwhile, the Church has a positive contribution “to stand in the gap and actually to be an amazing force in this country,” says McCulloch. “And then again, not just for social action but for the gospel to actually introduce people to a completely new way of thinking about their lives, which is just so brilliant.”
McCulloch says churches were doing incredible work helping people who are struggling. But there is always more to do and the Church itself benefits from doing more.
“It’s actually the local church that’s the powerful force, really restoring a position in our communities where it sits at the very heart. And CAP and similar charities are here to serve the church, not for the church to serve us. But if you ask me what would we ask a church to do? The first thing is it needs to really reach out and find out what’s going on in its local community.”
McCulloch encourages churches to educate themselves about their local communities and see what the main parochial issues are.
“Figure out what the main thing is for you and get your congregation behind it. And if poverty is your main thing, absolutely do the foodbank and cafes, and everything else. But have a word with us at CAP because we have debt centers with money coaching, job clubs and life skills courses that give you a way of beginning to reach out into your community to help people struggling with long term needs. And that way, feel your way as a church.”
Amid all their efforts, McCulloch emphasizes the need for prayer. “As the old adage goes: pray, give or act. And please pray for us. We’re always super keen on that.”
Some CAP befrienders and debt coaches are former clients. Some CAP executives are also ex-clients and McCulloch calls that “a beautiful thing because once we’re helped as human beings, our next thing is to go help someone else. And I think there’s something really beautiful in that.
“By helping others, you’re being helped as well because both of you are being transformed. It’s a great thing about our faith. We’re all here to be transformed.”
Read the full report here.
