A different banking crisis

Natalie and her six-year-old daughter, Stacy, live in a one bedroom flat on a housing estate in Shepherd’s Bush, London, not far from the Westfield shopping centre.*

“White City penitentiary”, Natalie calls it.

The 35-year-old spent her own childhood amid the fallen curls of her mother’s hair salon in Notting Hill. “I worked plaiting hair from the age of five”, she says. Her mum came to Britain from Dominique in the last gust of the windrush.

At school, Natalie was “happy-go-lucky”. She left aged 17 and went to work full-time in the salon. During her twenties, Natalie lived at her parents’ house in Acton. But after Stacy was born, she was told by her parents to find her own place. Stacy’s father had disappeared from the scene.

Hammersmith and Fulham council offered Natalie “temporary” housing in White City; the flat is meant for a single person, not a parent and child. Six years later, temporary has become permanent. Natalie sleeps in the living room-cum-kitchen.

On the estate there are few people she trusts to help look after Stacy. “A lot of people are weak”, she says. “When they want more money they have more children.” Rather than send Stacy to the nearest school, Natalie walks her daughter to and from a better one, 45 minutes away. Of her fellow residents she says: “They think we’re posh because I’m trying to get her out of the ghetto.”

Last year, when Stacy turned five, Natalie stopped receiving income support, an out-of -work benefit, and had to apply for Jobseeker’s Allowance, which requires the recipient to look for a job. The past two UK governments have tightened the eligibility requirements for income support; before November 2008, lone parents could receive the benefit until their youngest child reached 16. That threshold has been steadily reduced, from 16 to 12 to 10 to 7 to 5, where it currently stands.

Natalie signed up for the Work Programme, the coalition government’s “welfare to work” scheme. She has three-quarters of the credits required for a child care qualification at a local college. Work Programme advisers said completing the course would take too long. Natalie found her own employment. In January, she took a part-time job at Mothercare.

She starts next week. Her goal is to turn these 12 hours per week into a secure, full-time job (if she were to work at least 16 hours per week she would be eligible for working tax credits), and to complete her child care qualification. “Life throws you peanuts. It’s up to you to make peanut butter”, she says.

For her 12 hours of work per week, paid at the minimum wage of £6.31, she will receive £75.72. Typically, if you work part-time (defined as fewer than 16 hours per week) while receiving Jobseeker’s Allowance, your benefit is reduced pound for pound, aside from a £5 disregard. A week of JSA is £71.70, so she would be able to claim 98p (71.70 – (75.72-5)) of JSA – an eye-watering marginal tax rate.

Natalie decided to come off the benefit rather than receive 98p per week. The gap between her last JSA payment and her first pay cheque left her with no money. Her job centre advisers, she says, did not tell her that her JSA payment would be stopped so soon. And they did not tell her about emergency hardship assistance, access to which has been reduced by the current government.

She tried calling a government helpline but waiting for her turn drained her phone of its £4 of credit. Her prepaid heating key – already more expensive than other forms of bills – has run out. The flat is cold. And soon enough, there was no food.

No peanuts.


A “food bank” provides people with donated non-perishable food that they can take away and prepare at home. It is one form of “food aid”, a term that also includes community care services (e.g., Meals on Wheels) and location-based provision (e.g., soup kitchens). The vast majority of food banks only provide food to people who have been referred by professionals such as a doctor or a social worker.

The best data available on food bank usage are from The Trussell Trust, which operates a network of 415 sites in Britain. On Friday, I went to two of its London food banks: Tower Hamlets and Fulham, where I met Natalie. At each location, referrals bring a voucher which can be exchanged for three days’ worth of food. Trust staff or volunteers talk to each person to understand why they are in need.

The chart below shows how many three-day food supplies the Trust gave out in the past eight years. Some recipients may have received more than one parcel but there is a limit of three parcels per per person during a six month period.

Data such as these have been cited by critics of the government’s welfare reforms as evidence that the coalition’s policies are contributing to widespread hunger. Last week, Christian leaders called on the prime minister to review his approach.

Lord Freud, under-secretary of state at the department for work and pensions, has argued that increased food bank use is more to do with supply than demand. “[Food] from a food bank—the supply—is a free good, and by definition there is an almost infinite demand for a free good”, he has argued.

Food parcels are a funny kind of free. A recipient must go to the trouble and accept the stigma of getting vouchers (one is pictured below), before finding an open bank.

Nevertheless, Lord Freud has a point: are we seeing more usage because there is a greater availability of food banks?

Certainly, The Trussell Trust network has expanded rapidly.

But the average number of food parcels distributed by a Trust site has also risen sharply in the past two years, as the chart below shows.

This rise could reflect the publicity about food banks. Perhaps word has got around. Food prices have risen in the past five years. There was a long downturn that Britain is unevenly recovering from.

However, the evidence points to demand driving supply, rather than the other way around. As a long-delayed report by Warwick university researchers for the government that was published last week concluded: “We found no evidence to support the idea that increased food aid provision is driving demand. All available evidence both in the UK and international points in the opposite direction. Put simply, there is more need and informal food aid providers are trying to help.”

And when it comes to the immediate reason why people are turning to food banks, more often than not, it has something to do with the benefits system. When a person is given a Trust food voucher, they select the main reason for their need from a list of options. The graphic below uses Trust data from April 2013 to January 2014 to display how often each reason is cited by voucher recipients.

This does not mean that all food bank attendances are a result of the government’s reforms or cuts. Natalie’s immediate reasons for coming to the Fulham food bank were a mix of bad luck, benefit changes, poor administration, and, perhaps, changes made by the government to crisis loans, a source of emergency assistance. But it would be a stretch to hold reforms primarily responsible; and she did not. Dehumanising public services are not the preserve of one government.

Nevertheless, looking at the data and speaking to people at food banks, it is obvious that a growing number of cases are due to changes in the benefits system. Chris Mound, the Trust chair, says his criticisms should not be taken as comments on reform as a whole. “But we are talking about wisdom of decisions taken today in the current system,” he says. “We believe it is very bad for government agencies to put people in this situation where they are destitute.”

He gives some specific examples.

First, new sanctions for not adhering to JSA rules. Second, the “bedroom tax” or “spareroom subsidy”. Third, cuts and changes to emergency assistance such as crisis loans. Fourth, Work Capability Assessments.

At Tower Hamlets, I sat in on an interview between a welfare rights adviser from a major charity and Mohamed, 35.

Mohamed has diabetes, which has damaged his liver, kidneys and retinas. He is tired and depressed. His best friend was stabbed to death last year and Mohamed has not been the same since.

In November, he underwent a Work Capability Assessment, which found that he should be on JSA – i.e., he should be looking for work – rather than income support. I have no idea whether this was the right decision but Mohamed did not strike me as someone who would thrive in a full-time job. About four out of ten appeals against WCA decisions are successful.

Mohamed’s income support payments ended two weeks ago. This left him short of money and he says he missed his JSA appointment – a sanctionable offence for which four weeks of the benefit are docked – because he had no electricity to charge his phone, and therefore did not receive the text notifying him of the appointment.

“I’ve been sleeping without gas for three days”, he says. ‘There is no sugar in the house. I could just collapse. Nobody cares.”


David Cameron, prime minister, has described his government’s “welfare” reforms as a “moral mission”. I support much of what the coalition is trying to do; for example, the effective marginal tax rate for people such as Natalie should come down under Universal Credit. (It could also have come down without a massive project but that is for another post.) Any government taking power in 2010 would have had to cut the social security budget.

But the government’s haughty self-righteousness is risible in the face of evidence of unnecessary suffering. The rhetoric around benefits and the millions who receive them is already toxic. We could do without the idea that pointing out problems is somehow treacherous. If you look at what the Christian leaders are saying, as this atheist has, they are careful to focus on the practical consequences of specific decisions. There was only one side talking the language of crusade last week and it was not the ones whose job it is to promote the idea of ascension.

Natalie is not one for labels. While her daughter – who wants to be a doctor when she grows up – eats a slice of cake, she tells me that she always found funny the concept of a “single mother”. “It’s an empty name. I’m a mother.”

She also likes many of the government’s proposals about benefits, such as restricting housing benefit to under-25s; anything to stop what she sees as good incentives for bad parenting. This means she finds her recent experience all the more frustrating. “Sometimes the good have to suffer because of the bad”, she says.


* Real names changed at the request of the interviewees.