A new report will expose how the poor pay more for the basics of living, says yvonne roberts |
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In tackling poverty, the Labour government has focused on what goes into the pockets of the poor via the minimum wage, tax credits and benefits. Later this month, a report will ask why the poor have to pay out so much more than the better-off for basics such as heating, household goods and credit.
The differences are striking. For instance, a standard cooker bought outright from Argos costs £160. Bought over 125 weeks through a credit shop or a mail order catalogue, the price of the same cooker rises to £405.
While many people have a range of options for borrowing money at reasonable rates, the poor often rely on doorstep lenders. Again, the difference is huge: £500 borrowed on a credit card at 15 per cent APR over 52 weeks costs £39. But £500 borrowed from Provident Personal Credit, a company that has 60 per cent of the doorstep lending market, costs |
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| Many people have a range of options for borrowing money at reasonable rates, but the poor often rely on doorstep lenders |
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£325. That's because PPC's rate is 177 per cent APR over 55 weeks.
Gas and electricity are much cheaper for those who can afford to pay by Direct Debit. For example, 20,500 kWh of gas, paid direct from a bank account, costs £610; paid for via a prepayment meter - used mainly by the poor - the same gas costs £64 more.
The report is called When Less Means More: financial penalties faced by poor households and is produced by two charities, Save the Children and the Family Welfare Association.
It calls for an urgent overhaul of the tax system to introduce greater equality. For instance, VAT accounts for more than 12 per cent of the poorest families' expenditure compared to just 4.4 per cent of the richest.
The government has the goal of halving child poverty in the UK by 2010. The report argues that it will move closer to that target once day-to-day living expenses cease to cost the poor so dear. 
FIRST POSTED FEBRUARY 9, 2007
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