Gillian Guy, Chief Executive of Citizens Advice addresses an audience at the Resolution Foundation about Squeezed Britain:
"We have spoken of the squeezed middle and now squeezed Britain. What is clear to us at Citizens Advice is that some are certainly more squeezed then others. We see some 2 million people a year, another 14 million online and a million on the telephone. Generally we deal with people who are not coping but growing numbers of them are those we expect to be able to cope. That's working adult households, who make up 40 per cent of our face to face clients.
"This challenges a major assumption behind a lot of current policy thinking.
"The assumption that you are OK if you are in work, earning and belonging - or another popular term - striving. Much policy is geared towards landing people there. But is this really an answer, or are we just creating a bigger cliff edge? Work is not necessarily enough: it can often be a precarious position; often insecure, part time or self employment with no contingencies, no cushion, no savings.
"A situation where any financial shock can tip people over the edge, seemingly small things like a broken down washing machine. And when they tip over the edge, where do they turn? These people are generally used to coping so they continue to try. Often they resort to pay day loans (where interest rates do not mirror the financial market). They look for short term solutions and this often makes matters far worse. When in crisis then, either through debt or often employment issues, they turn to support from advice and welfare benefits.
"But we are only part way through a 16 per cent cut in real terms in public spending spread, in an unprecedented way, over 7 years. The vast majority of savings from public services, including local government, welfare and advice, are yet to come. So this safety net is in jeopardy.
"The mantra at Citizens Advice is a plea to policy makers to look at cumulative impact, at the multiplier effect and unintended consequences of multiple policies and circumstances which make it increasingly, all the more difficult for people to regain control.
"Against a backdrop of the rising cost of food, housing and fuel: the policy response to precarious employment, is to reduce employment protection; as we seek to encourage more people into work, wages are negated by high childcare costs; where a safety net is needed, benefits and support are reduced, advice and legal aid are cut; as rents increase, housing benefit reduces, and we have a room tax imposed on an immobile housing market; as Council tax support is devolved, it has strings attached by way of a cut and protection for older people.
"Add to this the emergence of other economies in the global context and the likely impact on costs and we have a very worrying cumulative picture.
"Getting people into work is not enough, clearly, we have to:
- keep people in work, make that work meaningful and make work pay in the real sense, starting with a living wage and affordable childcare;
- protect employment rights;
- ensure comprehensive free access to financial capability, debt and money management support;
- give equal access to healthcare, dentistry and income protection;
- secure access to responsible low cost borrowing and incentives to save;
- and invest in education and skills for the UK jobs market.
"As for the safety net, we must ensure support keeps pace with inflation and prevent perverse consequences of reform.
"If we don't act, the only winners out of this emerging situation will be illegal loan sharks, bailiffs and those who hold the rather warped belief that having a polarised society is a good thing."