Region in grip of low pay crisis, official figures reveal

First published in News
Last updated

THE region is in the grip of a low pay crisis, new figures show – with an explosion in the number of working people surviving on housing benefit.

The number of claimants in the North-East and North Yorkshire who have jobs has leapt by 56 per cent since the last general election, according to official statistics.

The Northern Echo: Housing Benefit claimants in work

Labour said low wages and part-time jobs meant more and more working people could only “put food on the table” with a housing benefit top-up.

Rachel Reeves, the party’s work and pensions spokeswoman, said: “Lots of people have not had a pay rise for years and they don’t get the hours they used to – they can’t make ends meet.”

But the department for work and pensions (DWP) insisted the number of housing benefit claimants - and the overall bill – was falling.

The figures show that the total number of housing benefit claimants has crept up in the region since May 2010 – to 264,196 in November last year.

But that masks the huge rise in the number who are in work, which has soared from 27,369 to 42,795, an increase of 56 per cent.

In County Durham, that figure rose from 3,881 to 6,507 (up 68 per cent), with similar leaps in Middlesbrough (61 per cent), Redcar and Cleveland (52 per cent) and Stockton-on-Tees (61 per cent).

And more working people are on housing benefit in North Yorkshire, in Hambleton (up 59 per cent), York (46 per cent) and – most strikingly – Richmondshire (85 per cent).

Ms Reeves, who uncovered the statistics, said the bill for people earning so little that they received housing benefit had risen by £6bn since the election.

Labour would reverse the trend by building more homes, stabilising rents, extending childcare to more families and by tackling abuse of the minimum wage and zero-hours contracts.

Ms Reeves added: “Our number one priority will be making life better for people on modest and middle incomes, so these figures will start moving in the opposite direction.”

But DWP spokesman said: “The truth is that the housing benefit bill was spiralling out of control in the years up to 2010, doubling to £20bn in a decade.

“Action this government has taken is bringing that bill under control - saving the taxpayer over £2bn a year. And, contrary to these figures, we have seen the number of housing benefit claimants fall over the last quarter.”

There has been growing criticism of the Government’s insistence that getting people off benefits and into work is, by itself, a route out of poverty.

In fact, of all the families living in poverty, 67 now have parents who are in work - up from 43 per cent since 1997 and by six per cent in 2011-12 alone.

The growing problems has been blamed on far more people working part-time, as companies tried to avoid shedding staff after the economic crash.

In addition, tax credits – introduced by Labour to help the low-paid - have been hacked back by the Coalition and there has been a boom in the use of zero-hours contracts.

Comments (21)

Please log in to enable comment sorting

9:01am Fri 9 May 14

RealLivin says...

Over recent weeks there have been numerous comments about scroungers and benefit cheats who need to be dealt with, as mentioned in this article a large number on some form of benefit are actually in work but are stuck in low paid jobs. What we need are real jobs with real wages not labour's open door to public sector jobs for 1000's on low pay with a few over paid executives, not tories short term funding of the private sector to take on workers because when the tax payers funding dries up so do the jobs. All governments need to invest in britian, public and private sector. If real jobs with real wages are created then those still on benefits will be the scroungers and cheats who are more easily dealt with when you are not penalising those in real need.

There is not a single person worth paying more than £100, 000 for any job, (especially in the public sector) use this money to fund real jobs and get more people into work on livable wages. Any one who says they are worth these sort of money are deluding themselves and every one else, yes these positions tend to have a lot of responsibilities, but you are either capable and can handle it or not, paying you money to take the responsibly doesnt mean you can and if you are asking for the money then you should not have the job as a higher offer would mean you are likely to relinquish those responsibilities without any regard to those you were responsible for.
Over recent weeks there have been numerous comments about scroungers and benefit cheats who need to be dealt with, as mentioned in this article a large number on some form of benefit are actually in work but are stuck in low paid jobs. What we need are real jobs with real wages not labour's open door to public sector jobs for 1000's on low pay with a few over paid executives, not tories short term funding of the private sector to take on workers because when the tax payers funding dries up so do the jobs. All governments need to invest in britian, public and private sector. If real jobs with real wages are created then those still on benefits will be the scroungers and cheats who are more easily dealt with when you are not penalising those in real need. There is not a single person worth paying more than £100, 000 for any job, (especially in the public sector) use this money to fund real jobs and get more people into work on livable wages. Any one who says they are worth these sort of money are deluding themselves and every one else, yes these positions tend to have a lot of responsibilities, but you are either capable and can handle it or not, paying you money to take the responsibly doesnt mean you can and if you are asking for the money then you should not have the job as a higher offer would mean you are likely to relinquish those responsibilities without any regard to those you were responsible for. RealLivin
  • Score: 11

9:12am Fri 9 May 14

thetruthyoucanthandlethetruth says...

We'll never get real jobs and real wages so long as we have mass immigration where wages are being forced down and jobs are constantly being devalued.
We'll never get real jobs and real wages so long as we have mass immigration where wages are being forced down and jobs are constantly being devalued. thetruthyoucanthandlethetruth
  • Score: 1

9:28am Fri 9 May 14

David Lacey says...

You both make excellent points. Work should pay and not need state funded top ups. Uncontrolled immigration forces down wages. Obvious innit?
You both make excellent points. Work should pay and not need state funded top ups. Uncontrolled immigration forces down wages. Obvious innit? David Lacey
  • Score: 3

9:34am Fri 9 May 14

Mr bright side says...

All true
All true Mr bright side
  • Score: -1

9:53am Fri 9 May 14

laboursfoe says...

What gets me is why we take money off people as tax and then give it back part some or more as benefits. It is a false economy and false administration, don't take the money off for earners under a realistic threashold.

Why pay civil servants to watch it come in through one stream and out through another?
What gets me is why we take money off people as tax and then give it back part some or more as benefits. It is a false economy and false administration, don't take the money off for earners under a realistic threashold. Why pay civil servants to watch it come in through one stream and out through another? laboursfoe
  • Score: 5

10:04am Fri 9 May 14

David Lacey says...

It was all part of Brown's plan to make people state dependent and therefore vote Liebour. The way out is to cut taxes for the least well off so that minimum wage work is always tax free and that a couple on the average wage can live comfortably without any hand outs. You do that by increasing the wealth of the country - growing the economy - by helping businesses to expand and welcoming inward investment with open arms. Oh - and by stopping the £50m a DAY we send to Brussels!
It was all part of Brown's plan to make people state dependent and therefore vote Liebour. The way out is to cut taxes for the least well off so that minimum wage work is always tax free and that a couple on the average wage can live comfortably without any hand outs. You do that by increasing the wealth of the country - growing the economy - by helping businesses to expand and welcoming inward investment with open arms. Oh - and by stopping the £50m a DAY we send to Brussels! David Lacey
  • Score: 4

10:28am Fri 9 May 14

bambara says...

4 years of Tory government, cuts cuts and more cuts, increasing inequality & the Tory propoganda merchants are still trying to blame the last government for it.
As the story points out "six per cent in 2011-12 alone" increase in the % of people in poverty who are in work.
Under this Tory government the % of those in poverty who are in work has risen to be 2 out of 3. 67% of those in poverty are actually working for a living.

Is it the Labour party who are paying them poverty wages? No and what is more "Tax credits – introduced by Labour to help the low-paid - have been hacked back by the Coalition and there has been a boom in the use of zero-hours contracts."

But remember as Dodgy Dave said "We are all in it together"

Indeed we all have to deal with the impacts of cuts.

Cuts in Tax for the rich (50% tax reduced to 45% for those on over £150,000 a year)

Cuts in benefits for the poor.
4 years of Tory government, cuts cuts and more cuts, increasing inequality & the Tory propoganda merchants are still trying to blame the last government for it. As the story points out "six per cent in 2011-12 alone" increase in the % of people in poverty who are in work. Under this Tory government the % of those in poverty who are in work has risen to be 2 out of 3. 67% of those in poverty are actually working for a living. Is it the Labour party who are paying them poverty wages? No and what is more "Tax credits – introduced by Labour to help the low-paid - have been hacked back by the Coalition and there has been a boom in the use of zero-hours contracts." But remember as Dodgy Dave said "We are all in it together" Indeed we all have to deal with the impacts of cuts. Cuts in Tax for the rich (50% tax reduced to 45% for those on over £150,000 a year) Cuts in benefits for the poor. bambara
  • Score: -2

10:37am Fri 9 May 14

bambara says...

Since the Tories came to power "the bill for people earning so little that they received housing benefit had risen by £6bn"

£6bn - That is roughly the same as the entire unemployment bill. We are now spending as much on just the increase in housing benefits since the Tories were elected as the entire bill for jobseekers allowance.

Anyone else think the disastrous policy of selling off all the council houses and not allowing the councils to build any more with the income generated is coming back to bite us?
Since the Tories came to power "the bill for people earning so little that they received housing benefit had risen by £6bn" £6bn - That is roughly the same as the entire unemployment bill. We are now spending as much on just the increase in housing benefits since the Tories were elected as the entire bill for jobseekers allowance. Anyone else think the disastrous policy of selling off all the council houses and not allowing the councils to build any more with the income generated is coming back to bite us? bambara
  • Score: 3

10:47am Fri 9 May 14

Apocalypse Later says...

You forget Gordon Brown was trying to spend his way out of recession.
Thant is why we are in this mess.
You forget Gordon Brown was trying to spend his way out of recession. Thant is why we are in this mess. Apocalypse Later
  • Score: -3

11:26am Fri 9 May 14

bambara says...

Apocalypse Later wrote:
You forget Gordon Brown was trying to spend his way out of recession.
Thant is why we are in this mess.
What you mean all that money he spent bailing out the banks?
How could he, after all the banks are private businesses, and as we have seen rife with corruption and dodgy dealing. I'm sure any other Government would have just let them fail, and let the economy absolutely crash with them...

If you hadn't noticed the world banking crash started in and was fuelled by bad debt in the USA. Bad debt that was sold to the rest of the world as AAA rated.
It triggered a banking crisis that impacted the entire world and brought the financial services sector to it's knees.
The UK economy was far more exposed to the impact of that crash due to the relatively large portion of our economy which is reliant on financial services.
Yet we did not go the way of Greece, or Ireland, or Spain, or Portugal, or Iceland, or many others. Gordon Brown managed to step in and prevent the banking sector from crashing.
A Labour prime minister stepped in and bailed out the banks, bailed out all those Eton and Harrow boys running our financial services industry who had got themselves into a mess.
Whatever you think of Brown, (and he is a charisma bypass in anyones books) if he had not acted the situation would have been far worse.
Or do you think the Tories would have put in more stringent controls on their old school chums in the city?
If you think Labour got it wrong, then just look up the list of banks that went under as a result of the financial crash in the USA, it isn't difficult to find, and the list is a long one. Think how you would have handled it if it had been your bank on that list, and you had gone to the bank on Monday to get money out for your weekly shopping to find the bank and your money no longer existed...
[quote][p][bold]Apocalypse Later[/bold] wrote: You forget Gordon Brown was trying to spend his way out of recession. Thant is why we are in this mess.[/p][/quote]What you mean all that money he spent bailing out the banks? How could he, after all the banks are private businesses, and as we have seen rife with corruption and dodgy dealing. I'm sure any other Government would have just let them fail, and let the economy absolutely crash with them... If you hadn't noticed the world banking crash started in and was fuelled by bad debt in the USA. Bad debt that was sold to the rest of the world as AAA rated. It triggered a banking crisis that impacted the entire world and brought the financial services sector to it's knees. The UK economy was far more exposed to the impact of that crash due to the relatively large portion of our economy which is reliant on financial services. Yet we did not go the way of Greece, or Ireland, or Spain, or Portugal, or Iceland, or many others. Gordon Brown managed to step in and prevent the banking sector from crashing. A Labour prime minister stepped in and bailed out the banks, bailed out all those Eton and Harrow boys running our financial services industry who had got themselves into a mess. Whatever you think of Brown, (and he is a charisma bypass in anyones books) if he had not acted the situation would have been far worse. Or do you think the Tories would have put in more stringent controls on their old school chums in the city? If you think Labour got it wrong, then just look up the list of banks that went under as a result of the financial crash in the USA, it isn't difficult to find, and the list is a long one. Think how you would have handled it if it had been your bank on that list, and you had gone to the bank on Monday to get money out for your weekly shopping to find the bank and your money no longer existed... bambara
  • Score: 4

11:34am Fri 9 May 14

Apocalypse Later says...

I might be best if you googled it to refresh your memory.
I might be best if you googled it to refresh your memory. Apocalypse Later
  • Score: -3

11:49am Fri 9 May 14

MartinMo says...

There will never be an easy resolution to this problem now, if employers are forced to pay real wages which fall in line with the cost of living they will employ less staff. Low wages with top up benefits came into play to encourage employers to take on more employees thus lowering the unemployment figure. This explains why we now have less unemployed claiming benefits, they took low paid job are were reclassed as working but on benefits. This moved solved nothing.

Only one way to pick this country out of it's economical crisis, real jobs with real wages with a cut in taxation to lower band salaries and then cutting benefits to a level of needs and requirements only.

Sounds harsh but we have a culture which has become that accustomed to living at the expense of others they actually believe what they receive is an entitlement.
There will never be an easy resolution to this problem now, if employers are forced to pay real wages which fall in line with the cost of living they will employ less staff. Low wages with top up benefits came into play to encourage employers to take on more employees thus lowering the unemployment figure. This explains why we now have less unemployed claiming benefits, they took low paid job are were reclassed as working but on benefits. This moved solved nothing. Only one way to pick this country out of it's economical crisis, real jobs with real wages with a cut in taxation to lower band salaries and then cutting benefits to a level of needs and requirements only. Sounds harsh but we have a culture which has become that accustomed to living at the expense of others they actually believe what they receive is an entitlement. MartinMo
  • Score: 2

12:38pm Fri 9 May 14

loan_star says...

The headline to the graphic states "Housing benefit claimants who are in work". Surely the fact that this has increased means that less claimants are out of work? I have no problem if people are actually trying to fend for themselves with a bit of assistance until their wages increase.
The headline to the graphic states "Housing benefit claimants who are in work". Surely the fact that this has increased means that less claimants are out of work? I have no problem if people are actually trying to fend for themselves with a bit of assistance until their wages increase. loan_star
  • Score: -2

12:56pm Fri 9 May 14

Ron Carter-Bonsteel says...

Wages are at a all time low. I know from my own family and friends that this government are using the unemployed for very cheap Labour. My son is in his early twenties he is on a apprenticeship and just gets £2 68 a hour thirty hours a week. He works for a charity which is a fantastic workplace and he as done voluntary work with this charity before this is the first workplace job he has been able to get and he has tried so hard to find work. My heart goes out to all our young and not so young trying to find work especially people who have families to support. How can anyone live on these wages?
Wages are at a all time low. I know from my own family and friends that this government are using the unemployed for very cheap Labour. My son is in his early twenties he is on a apprenticeship and just gets £2 68 a hour thirty hours a week. He works for a charity which is a fantastic workplace and he as done voluntary work with this charity before this is the first workplace job he has been able to get and he has tried so hard to find work. My heart goes out to all our young and not so young trying to find work especially people who have families to support. How can anyone live on these wages? Ron Carter-Bonsteel
  • Score: 3

2:02pm Fri 9 May 14

behonest says...

I agree Ron, wages are at an all-time low. The main reason for this is, I believe, the opening of our borders to huge numbers of EU migrants. The last Labour government added 2 million immigrants to our population, predominantly low skilled workers, so employers (understandably, to be honest) have taken the opportunity to employ more and more people on minimum wage. And if locals don't or won't take the work there are plenty of others to choose from.
This is why we have had record levels of youth unemployment, and why young people are struggling to make a decent living. Because they either miss out to more experienced European workers, or they accept minimum wage and struggle.

We need to regain control of our immigration policy and make it work in the best interests of Britain, not just have a 'free-for-all'.

Some leftie is probably now going to cry....'racist'! But they will be wrong.
I agree Ron, wages are at an all-time low. The main reason for this is, I believe, the opening of our borders to huge numbers of EU migrants. The last Labour government added 2 million immigrants to our population, predominantly low skilled workers, so employers (understandably, to be honest) have taken the opportunity to employ more and more people on minimum wage. And if locals don't or won't take the work there are plenty of others to choose from. This is why we have had record levels of youth unemployment, and why young people are struggling to make a decent living. Because they either miss out to more experienced European workers, or they accept minimum wage and struggle. We need to regain control of our immigration policy and make it work in the best interests of Britain, not just have a 'free-for-all'. Some leftie is probably now going to cry....'racist'! But they will be wrong. behonest
  • Score: 3

2:30pm Fri 9 May 14

MartinMo says...

Ron

Governments introduced cheap labour long before those currently in power. What year was it that "Youth Training Schemes" were introduced? I believe the going rate of paywas £26.25 (£0.70 per hour) for a 9-5 Mon-Fri position.

Low salaries as stated before was ploy to fiddle unemployment figures and encouraging companies to create employment opertunities.

Remedy:

Stop top up benefits to low paid salaries.
People will quit/refuse to take low paid employment
In order to fill required positions employers will be forced to pay real salaries.
However you will see less employment opertunities becoming available and therefore an increase in unemployment figures.

Taking the cost of living for an average family at £26000pa then surely this should the personal allowance for a household income before any taxation or NI is enforced.
Ron Governments introduced cheap labour long before those currently in power. What year was it that "Youth Training Schemes" were introduced? I believe the going rate of paywas £26.25 (£0.70 per hour) for a 9-5 Mon-Fri position. Low salaries as stated before was ploy to fiddle unemployment figures and encouraging companies to create employment opertunities. Remedy: Stop top up benefits to low paid salaries. People will quit/refuse to take low paid employment In order to fill required positions employers will be forced to pay real salaries. However you will see less employment opertunities becoming available and therefore an increase in unemployment figures. Taking the cost of living for an average family at £26000pa then surely this should the personal allowance for a household income before any taxation or NI is enforced. MartinMo
  • Score: 1

5:27pm Fri 9 May 14

RealLivin says...

MartinMo wrote:
Ron

Governments introduced cheap labour long before those currently in power. What year was it that "Youth Training Schemes" were introduced? I believe the going rate of paywas £26.25 (£0.70 per hour) for a 9-5 Mon-Fri position.

Low salaries as stated before was ploy to fiddle unemployment figures and encouraging companies to create employment opertunities.

Remedy:

Stop top up benefits to low paid salaries.
People will quit/refuse to take low paid employment
In order to fill required positions employers will be forced to pay real salaries.
However you will see less employment opertunities becoming available and therefore an increase in unemployment figures.

Taking the cost of living for an average family at £26000pa then surely this should the personal allowance for a household income before any taxation or NI is enforced.
I would agree but unfortunately your benefits can be stopped if you dont take low paid jobs even when you can prove you are worse off, hows that for fairness, of course if you are a minority its different "hes your blank cheque sir" . However I really believe DBC can take the lead here, swap Ada's and Bill's wages for that £2.68 per hour and we have have our services back with the saving.
[quote][p][bold]MartinMo[/bold] wrote: Ron Governments introduced cheap labour long before those currently in power. What year was it that "Youth Training Schemes" were introduced? I believe the going rate of paywas £26.25 (£0.70 per hour) for a 9-5 Mon-Fri position. Low salaries as stated before was ploy to fiddle unemployment figures and encouraging companies to create employment opertunities. Remedy: Stop top up benefits to low paid salaries. People will quit/refuse to take low paid employment In order to fill required positions employers will be forced to pay real salaries. However you will see less employment opertunities becoming available and therefore an increase in unemployment figures. Taking the cost of living for an average family at £26000pa then surely this should the personal allowance for a household income before any taxation or NI is enforced.[/p][/quote]I would agree but unfortunately your benefits can be stopped if you dont take low paid jobs even when you can prove you are worse off, hows that for fairness, of course if you are a minority its different "hes your blank cheque sir" . However I really believe DBC can take the lead here, swap Ada's and Bill's wages for that £2.68 per hour and we have have our services back with the saving. RealLivin
  • Score: 0

5:38pm Fri 9 May 14

loan_star says...

Putting wages up creates a vicious circle in that companies will charge more for their products, meaning consumers paying more too. What you gain in wages you will lose elsewhere. There has to be a balance somewhere.
Putting wages up creates a vicious circle in that companies will charge more for their products, meaning consumers paying more too. What you gain in wages you will lose elsewhere. There has to be a balance somewhere. loan_star
  • Score: 0

6:07pm Fri 9 May 14

laboursfoe says...

loan_star wrote:
Putting wages up creates a vicious circle in that companies will charge more for their products, meaning consumers paying more too. What you gain in wages you will lose elsewhere. There has to be a balance somewhere.
The price per unit goes up, or it gets sourced oversees and jobs are lost.

If it costs more to make it in the UK than abroad and profit margins are lower then this can only head one way. Badly for the UK.
[quote][p][bold]loan_star[/bold] wrote: Putting wages up creates a vicious circle in that companies will charge more for their products, meaning consumers paying more too. What you gain in wages you will lose elsewhere. There has to be a balance somewhere.[/p][/quote]The price per unit goes up, or it gets sourced oversees and jobs are lost. If it costs more to make it in the UK than abroad and profit margins are lower then this can only head one way. Badly for the UK. laboursfoe
  • Score: 0

6:10pm Fri 9 May 14

laboursfoe says...

I would also ask what percentage of the increase are now in work that weren't in any sort of work 2010
I would also ask what percentage of the increase are now in work that weren't in any sort of work 2010 laboursfoe
  • Score: 0

10:07pm Sun 11 May 14

bambara says...

What % of those who were in work when the Tories came to power last time were out of work as a result of their policies?

I remember the Tory lies. "Labour isn't working" pictures of a long dole queue in the Tory election posters. I remember the millions of extra people on the dole as a result of the Tory policies following that.

This time around it appears they are concentrating on increasing the gap between the rich and the poor.
This time it isn't enough for people to be unemployed and desperate.
This time even those who are working are to be plunged into poverty to feed the avaricious wants of the wealthy elite.
What % of those who were in work when the Tories came to power last time were out of work as a result of their policies? I remember the Tory lies. "Labour isn't working" pictures of a long dole queue in the Tory election posters. I remember the millions of extra people on the dole as a result of the Tory policies following that. This time around it appears they are concentrating on increasing the gap between the rich and the poor. This time it isn't enough for people to be unemployed and desperate. This time even those who are working are to be plunged into poverty to feed the avaricious wants of the wealthy elite. bambara
  • Score: 0

Comments are closed on this article.

Send us your news, pictures and videos

Most read stories

Local Info

Enter your postcode, town or place name

About cookies

We want you to enjoy your visit to our website. That's why we use cookies to enhance your experience. By staying on our website you agree to our use of cookies. Find out more about the cookies we use.

I agree