Economic Crisis Puts 700,000 into Poverty in the UK, New Study Finds

December 1, 2020 Topic: Economcs Region: Europe Tags: United KingdomEconomyCoronavirusPandemicPoverty

Economic Crisis Puts 700,000 into Poverty in the UK, New Study Finds

The pandemic’s economic effects on jobs, wages and businesses have plunged the total number of people below the poverty threshold to more than 15 million, or 23 percent of the United Kingdom’s population.

 

The economic crisis fueled by the coronavirus pandemic has shoved almost 700,000 people across the United Kingdom into poverty, according to a new analysis released Monday.

But an additional 690,000 would have boiled into poverty without government stimulus support programs, like the temporary £20 weekly boost to universal credit, as reported by the Legatum Institute, a London-based conservative think tank that conducted the analysis. 

 

“The strength of reaction from the Government has insulated hundreds of thousands of people from poverty,” the analysis reported. “This shows that, with the right tools and the right information, Government can ensure that, at a time of crisis, many of those who are vulnerable to poverty are protected.” 

The pandemic’s economic effects on jobs, wages and businesses have plunged the total number of people below the poverty threshold to more than 15 million, or 23 percent of the UK’s population, according to the analysis, which uses the Social Metrics Commission’s approach to poverty measurement and assessment. Poverty has risen particularly among working-age adults, as 640,000 more people in this group are in poverty this winter compared to if the virus had not struck the UK. 

Baroness Philippa Stroud, the institute’s chief executive, told the National Interest, “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.”

While the number of people in poverty in the UK is growing due to the pandemic, poverty has been a “significant long-term issue,” one that’s “hardly changed over the last 20 years,” the analysis identified. More than 1-in-5 people in the UK, roughly 14.4 million, were already living in poverty prior to the onset of the pandemic.

Poverty, however, has declined for some, including many non-working families who have seen their benefits jump, with the study revealing a reduction of 170,000 in poverty among people in workless families in the winter compared to if the pandemic and its resulting government benefits had not occurred. But there have been “significant increases” in poverty for working families that are now generating less income.

The number of coronavirus cases decreased by around 30 percent in England as a result of the country’s second national lockdown that forced non-essential businesses to close, which likely sunk more people into poverty.

According to the Organization for Economic Cooperation and Development, the UK was one of the hardest-hit economies this year, as it contracted 20.4 percent during a three-month span from April to June with widespread lockdown efforts and overwhelming spikes in confirmed infections.

As of Monday, there are more than 1.64 million coronavirus cases with roughly 58,000 deaths. 

Rachel Bucchino is a reporter at the National Interest. Her work has appeared in The Washington Post, U.S. News & World Report and The Hill. 

Image: Reuters