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Our analysis shows that, at a time of crisis, Government action can protect many of those who are vulnerable to poverty
Our analysis shows that, at a time of crisis, Government action can protect many of those who are vulnerable to poverty
A new report by the Legatum Institute provides the first estimates of poverty in Winter 2020 using the Social Metrics Commission’s approach to measuring poverty, which the Government is currently developing as an Experimental Statistic. It shows that, although the number of people in poverty has increased, almost 700,000 have been protected by the £20 a week increase to Universal Credit and other benefits.
Official data to assess poverty during the Covid-19 period will first become available in 2022. This is obviously too late for decision makers who are seeking to ensure that the most vulnerable are shielded from the worst impacts of the pandemic. To tackle this, the Institute’s report summarises results from a set of ‘nowcasting’ scenarios based on the most up-to-date data on the economic impacts of Covid-19 and how they have been distributed across different families.
It estimates that:
Table: Projections of poverty in Winter 2020, with and without changes to benefits
Individuals in poverty (millions) | Change in poverty compared to no-Covid-19 scenario | Poverty rate (%) | Change in poverty rate compared to no-Covid-19 scenario (percentage points) | |
With changes to benefits | 15.2m | +690,000 people | 23% | +1 ppt |
Without changes to benefits | 15.9m | +1,380,000 people | 24% | +2 ppts |
Source: Legatum Institute, Family Resources Survey and HBAI dataset (1998/99 – 2018/19), IPPR tax and benefit model.
Notes: Winter 2020 uses a high unemployment, high furlough scenario.
The report also shows that increases in poverty have not been consistent across the population:
Baroness Philippa Stroud, CEO of Legatum Institute said:
“Given the well-documented impacts that the pandemic is having on jobs and earnings for families right across the UK, it comes as no surprise that poverty is rising. However, our analysis shows that, at a time of crisis, Government action can protect many of those who are vulnerable to poverty, but it needs to have the right tools and the right information at its disposal.”
“To ensure this continues as we begin to adapt to life after, or living with, Covid-19, there is a clear need for a comprehensive anti-poverty strategy to be placed at the heart of the UK’s Covid-recovery response.”
“That’s why we’re calling for the Government to urgently push ahead with its development of Experimental Poverty Statistics based on the Social Metrics Commission’s work. These measures shine a light on the drivers of poverty and the range of tools Government has to tackle it; from boosting incomes and promoting work to tackling mental health and supporting families.”