On Wednesday the new Chancellor delivered his first, and last, Autumn Statement. This was a significant moment for Theresa May and her cabinet - the Government's first practical demonstration of her laudable aspiration to make Britain a country that 'works for everyone'.
The statement lived up to expectations for JAMs and focused on making life easier for those who are 'just about managing'. This is no easy task given how many this applies to (6 million working-age households according to estimates from the Resolution Foundation) and how stretched they are - in a number of different directions.
We saw new policies which will help families free up budget including a freeze in fuel duty, a planned increase to the National Living Wage from £7.20 an hour to £7.50 from next April and plans to scale back planned cuts to Universal Credit. Certainly since the referendum result in June, there has been a spike in fuel and food prices so these attempts to help households meet everyday costs will be welcome.
But what about people who are 'not managing'? While helpful, these policies don't tackle the obstacles blocking what's needed to help people on the lowest incomes to both get by - and thrive.
The most fundamental of these obstacles is the Poverty Premium - the poorer you are, the more likely you are to pay higher costs for goods and services. Last year, Citizens Advice Scotland found that people living in poverty were paying roughly 10% more for essential goods and services, while according to a report from 2014 by the east London charity Toynbee Hall, residents of Tower Hamlets pay a premium of up to £1,014 a year, consisting mostly of higher energy costs, car insurance and loans.
An example of this premium is the limited access to finance available - the cost of credit is more expensive for low income families. The fundamental reason for this is creditworthiness, and banks' reluctance to take risks leaves consumers without a track record of repayments, whether this is because they have had a poor credit record, or periods of unemployment, perhaps through no choice of their own. This effectively blocks those, who need it most, from having access to credit.
In addition to this, if you live on a sink estate, your car insurance is likely to be higher than if you live in a safer, more affluent area. However, the vicious circle of the poverty premium means that you are unlikely to be able to move to a safer area because you're unable to access the credit to allow you to do this (and increasingly unaffordable housing compounds the situation). You quite literally pay a price for being poor.
Indeed, it is not surprising that the Poverty Premium impacts most on those cities which fall towards the bottom of PwC's recent Good Growth for Cities index. This index, looked at, amongst other categories: employment, income, skills and housing affordability. Where employment and skills are low, the Poverty Premium is most prevalent.
We cannot begin to reduce this premium without looking at the obstacles which prevent people and communities from helping themselves out of poverty: access to quality education and gaining skills improves people's chances of employment; transport links from hard to reach areas to centres of employment like cities allow for more opportunities.
To tackle this problem, the Government needs to help those who need it the most, to have access to finance, jobs, and importantly education which will in turn give them the opportunity to raise their income themselves and not pay the price of being poor.
At a local level, councils are beginning to address the problem by offering new ways to borrow and buy energy. Last year Sheffield launched Sheffield Money, a loans service that could save the city's poorest residents a combined £20m a year. Councils around the country are also using collective switching to help residents move to the best deals. This involves signing up as many people as possible and then taking part in an auction with energy firms. Residents are then told how much they can save and are given the choice as to whether to move.
At a national level, the Government could support these types of schemes further by empowering local authorities to tackle the ways in which the Poverty Premium is playing out in their own area. But they also need to address the national cause of the premium head on by working with financial institutions, energy companies and housing associations amongst others to resolve the issue of 'creditworthiness' with low income households and encouraging employers to help their staff and customers manage their money.
The Autumn Statement has been a step in the right direction but we cannot achieve a country that works for everyone without zeroing in - and addressing what makes life so difficult for those paying the price of poverty - and a premium for it.Suggest a correction