Rishi Sunak could plunge more than 3 million people into poverty if he proceeds with a planned benefits cut next spring, a leading leftwing thinktank has warned.
A new study by the Fabian Society found that returning welfare payments to pre-pandemic levels – following a year-long boost – would drive a further 1.1 million people below the poverty line.
If the government were to remove the £20 supplement to universal credit, with mass unemployment on the horizon, the impact would be three times as severe – with 3.2 million people in poverty.
‘It could get much worse’
At the onset of the Covid-19 crisis, the chancellor announced £6 billion of spending for a one-year increase in universal credit – but did not specify whether he planned to continue with the boost past March in last week’s spending review.
The Fabian report will ratchet up the pressure eon Sunak to make the temporary spike permanent. According to the think-tank, in the event of mass unemployment, 22 per cent of Brits would be living in poverty, while the number of children living below the breadline would rise to 850,000.
Andrew Harrop, general secretary of the Fabian Society, said: “If ministers reverse the temporary benefit rises that sustained millions of low income households this year the consequences will be enormous for families, reducing spending power and driving people into poverty.
“But it could get much worse. When furlough and other support measures come to an end in the spring, unemployment is expected to grow and many more families will turn to benefits.
“After so many redundancies on the high street this year, there is a chance of unemployment rising to levels last seen in the 1980s and 1990s. Alongside the planned benefit cuts this will push an extra 3 million people into poverty. The government must act now and put the 2020 benefit uplift on to a permanent footing.”
More than 15 million already in poverty
The worrying report comes after it emerged that close to 700,000 people in the UK – including 120,000 children – have been pushed into poverty by the Covid-19 economic crisis.
The pandemic has plunged the total number of people in the country living in poverty to more than 15 million – 23 per cent of the population – according to thinktank the Legatum Institute.
Young workers were the hardest hit by the economic crisis, alongside those working in decimated sectors like hospitality and retail. Elderly people were the least badly hit.
Of the 700,000 newly plunged into poverty, just over half had incomes up to 25 per cent below the poverty line. A further 16,000 were up to 50 per cent below, and 270,000 had fallen into “deep poverty” – categorised as more than 50 per cent below the poverty line.
Related: Covid-19 crisis has plunged nearly 700,000 Brits into poverty, study finds
Since you are here
Since you are here, we wanted to ask for your help.
Journalism in Britain is under threat. The government is becoming increasingly authoritarian and our media is run by a handful of billionaires, most of whom reside overseas and all of them have strong political allegiances and financial motivations.
Our mission is to hold the powerful to account. It is vital that free media is allowed to exist to expose hypocrisy, corruption, wrongdoing and abuse of power. But we can't do it without you.
If you can afford to contribute a small donation to the site it will help us to continue our work in the best interests of the public. We only ask you to donate what you can afford, with an option to cancel your subscription at any point.
To donate or subscribe to The London Economic, click here.
The TLE shop is also now open, with all profits going to supporting our work.
The shop can be found here.
You can also SUBSCRIBE TO OUR NEWSLETTER .