The alarm sounds over and over again. Every organisation concerned with the cost of living and children going without is trying to alert the public to the worsening crisis, ahead of the budget. If you’ve heard it all before, this is shockingly beyond normal, even for this government. This month, poverty will rise, and not by accident, as 6.4 million people on universal credit lose their cost of living support payment. That £900 emergency uplift has gone, but their outgoings will never return to where they were.
This cut follows the scrapping of the £20-a-week pandemic boost to universal credit – which the Institute for Fiscal Studies says plunged 100,000 more into poverty. The Joseph Rowntree Foundation’s most recent figures show that 3.8 million people experienced destitution in 2022 – a number that has doubled since 2017.
Renters will have their housing benefit unfrozen in April, but here’s the wicked catch 22: when people get more to cover their rent, 86,000 families won’t receive a penny extra because their benefits are capped, says the Institute for Public Policy Research (IPPR). More than 800,000 households will still have to fund the gap between their rent and their benefit.
Meanwhile, a new Action for Children report finds that many families are falling below the breadline, even where both parents work full-time on the minimum wage: each would need to work an eight-day week to escape that threshold. Forget the government’s mantra that work is the best welfare – there is no eighth day of the week.
The gap between what universal credit provides and what a family needs to survive is growing by the month. The new Citizens Advice National Red Index counts 5 million people trapped on a “negative budget”, with incomes that will never cover their bills, plus 2.35 million “living on empty”, going hungry. This crisis has escalated sharply in the last two years, it says. The Child Poverty Action Group calls it a “national emergency”, in which on average nine children in a class of 30 are poor, adding up to 4.2 million children. You want more evidence? There’s an abundance, all signalling the same. The Resolution Foundation predicts another 300,000 people will be added to the ranks of the poor this year.
Yet amid all the chancellor Jeremy Hunt’s fantasy talk of “headroom” for tax cuts (his putative billions wax and wane with the moon), no Tory urges him to stop this poverty acceleration. Instead, the latest kite flown is ending the child benefit “unfairness” to families in which either parent earns £50,000 or more. Ah, those are the sort of people Hunt wants to wave to. True, there’s a cliff edge where child benefit tapers away after earnings of £50,000, giving a couple with two children an effective 63% tax rate (though a couple earning £99,000 together still draws it all.) Yes, it’s unfair. But people on universal credit lose up to 69% in benefits for every £1 they earn, and every penny matters far more to them.
A new Labour government would inherit this rising poverty, along with that £20bn debt Hunt leaves to be cut in 2025 from … well, he never says what from. But it can and should reverse these trends. The IPPR report says a million people could be taken out of poverty instantly at the cost of £12bn a year by doing three things: adding £50 a month to universal credit; removing the benefit cap and the two-child limit; and giving second earners a working allowance so they don’t start losing universal credit when they take a job. It also calls for an end to the crippling five-week wait for the first payment that lands so many in debt. Remember that £12bn sum if Hunt gifts tax cuts to the better-off.
What will Labour do? Keen to win SNP seats, Labour needs to outdo them: giving families on universal credit an extra £25 a week lifts 90,000 Scottish children above the poverty line. No Labour government could oversee rising poverty: money must and will surely be found. Adam Corlett of the Resolution Foundation finds that New Labour got very much closer to its child poverty target than was realised: Tony Blair pledged to end child poverty by 2020, and it was almost halved by 2010. Then history intervened, and everything went backwards: social mobility in reverse, declining social progress.
But don’t expect Labour to say what it will do – that Blair pledge was nowhere in the 1997 manifesto. Why? Even suggesting jobcentres should help people into better jobs with careers, not “any job” in the zero-hours gig economy, had the Tory work and pensions secretary weaponise it in last week’s Sun: “Sir Softie: Sir Keir Starmer’s ‘soft touch’ approach to benefits ‘could cost taxpayers £450m a year’, under Labour plans ‘to water down benefit rules’.” Misled by press like this, Tories are out of step with any but their dwindling devotees. Public attitudes are kinder in these food bank days.
The British Social Attitudes survey, which has asked the same question for 40 years, finds a seismic shift in sympathy: only 19% now agree that “Most people who get social security don’t really deserve any help”, a marked change from 40% agreeing in 2005. Save the Children finds that 69% of Tory voters want benefits preserved, not cut. Nor do they want tax cuts. Opinium for the Fairness Foundation finds 73% of Tories want to maintain or increase tax levels, backing progressive tax reforms, not cuts. Both Labour and Tory campaign managers believe Britain is still profoundly conservative. The election will tell us otherwise: a strong win should liberate Labour from those old fears.
• This article was amended on 29 February 2024. The IPPR said that 86,000 families won’t receive a penny extra because their benefits are capped, rather than “86,000 families will hit the benefit cap and lose it all”.
Polly Toynbee is a Guardian columnist
