Economic 'fall out' of pandemic could push a million more people into poverty

Analysis by IPPR said the “economic fall out” of the lockdown would see the number of children living in poverty jump by 200,000, taking the total to 4.5 million.

Last month a report by the End Child Poverty coalition showed families in parts of Yorkshire had been “pushed to breaking point” by a steady four year rise in child poverty.

The latest IPPR report said urgent action is needed from the Government to protect families from the financial hardship caused by the pandemic.

The think tank said those newly forced to rely on Universal Credit will experience “a major hit to their living standards”, which will be particularly damaging for households with high rents as a proportion of their incomes, or with debts and low levels of savings

Even for many parents with jobs, returning to work is difficult or impossible while schools and childcare are only taking selected pupils, and are open irregular hours, it was warned.

IPPR called on the Government to include measures to support children and families as part of its planned economic stimulus package this summer.

Clare McNeil of the IPPR said: "This analysis shows that hundreds of thousands of families and their children who may have been 'just about managing' before Covid now face being plunged into poverty.

"The Government must apply the same level of ambition it had for supporting businesses and workers in the early stages of this crisis, to prevent a new generation of children and their families falling into poverty through no fault of their own.

"The Chancellor must include in this summer's stimulus a package of measures to support families alongside funding for physical infrastructure and job creation.

"This should include removing the Universal Credit austerity measures, supporting family and carer incomes and investing in childcare to open up more options for parents to return to work."

Richard Burgon, Labour MP for East Leeds, which was last month named among the worst 20 constituencies nationwide for increases in child poverty, said families in his area were already living in “real hardship” as a consequence of previous austerity measures.

He said: “It would be totally unacceptable for people in our area to now be made to pay the price for the profits lost by big business during the coronavirus pandemic. Unless we have a 'people's bailout' to protect jobs and living standards, then even more people in our community will be pushed into financial difficulties and poverty through absolutely no fault of their own."

A further new report from the TaxPayers’ Alliance has called for major tax reform to people struggling post-coronavirus, including measures that could cut the average wage bill by 38 per cent and put £1,622 in workers’ pockets.

The campaign group said the economic affects of coronavirus ould “dwarf the great recession” with a 2.8m-strong “unemployment wave”.

Chief executive at the TaxPayers' Alliance, John O'Connell, said: "With the economy on its knees and millions facing unemployment, trying to tax our way out of it would be madness. But bold reforms could slash the cost of hiring, boost pay packets and drive a wave of investment which would power up economic growth and kick start the housing market.

"By reducing the most economically damaging taxes now, the chancellor can avoid a deep depression and wave of unemployment by protecting taxpayers and businesses in the recovery."

A spokesperson for the Department of work and Pensions said: “We’re committed to supporting the most vulnerable in society throughout the current emergency and beyond.

“We have injected £6.5 billion into the welfare system, including increasing Universal Credit and Working Tax Credit by up to £1,040 a year, to help those in most need. We’ve also rolled out income protection schemes, mortgage holidays and additional support for renters.

“This builds on action already taken to support low paid families such as raising the living wage, uplifting benefits by inflation and increasing work incentives.”