London is the second richest city in the world after New York City. According to Business Insider, there are 2.7 trillion dollars of total private wealth in London. London, however, is a divided city.
Despite the apparent wealth, London has the highest rate of poverty in Great Britain. Traditionally, the East End, the area of London east of the city also known as the business district, has been impoverished. During the reigns of Queen Victoria and Edward VII, there were dreadful slums in this part of London. The worst slum was ‘Old Nichol’ in Shoreditch. From the early twentieth century, slums were demolished and council flats built to house former slum dwellers. Although this improved the lives of those who inhabited slums, there is still much deprivation.
When England hosted the summer Olympics in 2012, a large number of jobs were created, however, the majority of those jobs ceased to exist when the Olympic Games ended. There is still high unemployment in the East End. This is exacerbated by Canary Wharf, a business development adjacent to dilapidated council estates. Many of those who inhabit council flats are in low paid work while those who work at Canary Wharf earn high incomes. Near to the East End is the city where the Stock Exchange is located; many here are paid high salaries. This further distinguishes the economic division in London leading to poverty.
On a similar note, Westminster is one of London’s wealthiest boroughs because it is the area where all the tourist landmarks are situated such as The National Gallery and Trafalgar Square. Also, Westminster incorporates many places of entertainment such as London’s West End theatres. Westminster, however, has the highest number of rough sleepers in England. In the autumn of 2018, 306 people spent a night on the streets in Westminster. This is more than double the number of those in Camden, the borough with the second-highest rate of rough sleeping. The main factors that have caused rough sleeping are unaffordable accommodation, relationship breakdown, eviction and release from institutions, such as prisons, where no support has been provided.
Another form of homelessness are those who live in temporary accommodation, such as bed and breakfast hotels. The number of households in temporary accommodation in London is ten times higher than the national average; high rents have been responsible for this. Also, the introduction of ‘The Bedroom Tax’ precipitated a high number of evictions. The regime penalized people who lived in a council property where there were more bedrooms than people living there. For example, if one person inhabited a three-bedroom, council flat, the tenant would have to pay rent for the other two bedrooms not being occupied. This led to many having a shortfall on their rent account and they were evicted because of this.
The introduction of ‘Universal Credit,’ which was a huge change to welfare in decades, caused misery and suffering to millions because claimants had to wait months before they received any money; this caused there to be arrears on rent accounts and tenants were evicted although they were not to blame. The majority of people evicted were then placed in temporary accommodation in outer London because Housing Benefit (this covers the payment of rent for those without work or in low paid jobs) costs are cheaper than in inner London. Inner London has become ‘gentrified’ (wealthy people have moved to once poor areas) and therefore rents are much higher there than in outer London. London has the highest rate of child poverty in England. 700,000 children in London are living in poverty. Tower Hamlets, a borough in the East End, has the highest rate of child poverty in London, at 56.7%.
The high cost of living and reduction in welfare have been responsible. Also, there has been a ‘benefits freeze’ which has prevented welfare benefits being increased to accommodate the rising cost of living. Two-thirds of child poverty exists in families where at least one adult is working. Although unemployment is at its lowest since the 1970s, a high number of people are in low paid jobs. A Joseph Rowntree Foundation Survey in 2016 revealed that 55% of Londoners living in abject poverty were in employment.
The ‘gig’ economy has been responsible for the rise in poverty in London and the rest of England. The ‘gig’ economy is a labour market characterized by the prevalence of short-term contract or freelance work rather than permanent jobs. Also, there have been a high rise in the number of ‘zero hour’ contracts: an employee might have work one day but nothing for the rest of the week. Such jobs have no holiday or sick pay. Irregular and low paid work as well as the high cost of living in London have caused millions to be living in poverty.
Poverty is detrimental to people’s physical and mental health. Limited money forces people to eat cheap food which contains much sugar, fat and salt which can precipitate Diabetes, heart disease and obesity. The stress of poverty can cause people to become mentally ill or to use alcohol or drugs as coping mechanisms. A living wage needs to be introduced. A living wage is the minimum income necessary for workers to meet their basic needs of food, housing and other essential needs. Far more council homes and housing association properties need to be built; these cater for those in low paid work.
Also, the high cost of living needs to be reduced. For example, there should be a freeze on fares being increased. Such changes would greatly reduce poverty. Britain has the sixth richest economy in the world yet for many, there is no quality of life owing to poverty. There is a proverb: History repeats itself. Britain in the early twenty-first century has become the second Victorian age.