JRF Study reveals scale of debt crisis among low-income households
Number of low-income households in arrears has tripled since pandemic hit
4 in 10 working-age low-income households fell behind on bills during pandemic
Millions are behind on rent and bills and have had to take on new borrowing
JRF calls for urgent action to support low-income families through cost-of-living crisis and prevent worsening wealth inequality
A large-scale study of households on low incomes has revealed the extent of the debt crisis hanging over the UK’s poorest families as the country braces to weather a cost-of-living crisis.
The analysis by the Joseph Rowntree Foundation (JRF) looks at households in the bottom 40% of incomes in the UK – those with a household income of £24,752 or less. This represents around 11.6 million households.
It estimates that 3.8 million such households are in arrears with household bills, totaling £5.2bn. 950,000 are in rent arrears; 1.4 million are behind on council tax bills; and 1.4 million are behind on electricity and gas bills. 33% of low-income households are now in arrears, which is triple the 11% estimated by a similar study prior to the pandemic.
Working-age households on low incomes (those aged 18-64) have been particularly hard hit: 44% are in arrears. For households aged 18-24 this rises to almost three-quarters (71%) of people being in arrears.
The survey shows clear signs that the profound financial impact of the pandemic has dragged families who were previously just about managing into arrears on essential bills. A large majority of households who are now behind on their household bills (87%) said that they were always or often able to pay all their bills in full and on time before the pandemic hit.
This is not surprising given people on low incomes were more likely to lose income during the pandemic due to job loss, reduced hours or being furloughed. Even before recent energy price rises began to bite, six in ten households on low incomes (62%) reported that their costs increased during the pandemic.
The other clear trend in the survey is the increased borrowing taken on by households on low incomes. Around 4.4million such households have taken on new or increased borrowing, and their total amount of borrowing comes to an estimated £9.5bn. 69% of households with new or increased borrowing are also in arrears.
The study highlights groups that have been hit particularly hard. Over half of the households in the following groups have been pulled into arrears:
Families with children (55%),
Households in London (55%),
Households with a person under 45 answering the survey (56%),
Black, Asian and minority ethnic households (58%)
Many families on low incomes are still reeling from the huge £20 per week cut to Universal Credit and Working Tax Credit earlier in the month. It is worrying that the survey was conducted in September when many of the households surveyed received the uplift which has now been removed.
Energy bills and other costs are continuing to rise, with the price of energy projected to soar further in the coming months. An increase in National Insurance contributions next April is another extra cost many working people will face.
Of the households surveyed who receive Universal Credit, 40% are not confident they will be able to pay their bills in full and on time, while 35% don’t think they will be able to avoid taking on more debt. Half (50%) of these households say they do not feel confident they can find a job or work more hours, calling into question the Government’s insistence on jobs as the only solution.
The comparison between how poorer and wealthier households have fared during the pandemic is striking. The Bank of England found that wealthier households have tended to accumulate savings during the pandemic.
These households were more likely to stay in work and to be able to work from home, reducing daily costs, and to save money during lockdown due to enforced saving. Homeowners also benefited from rising house prices.
JRF is urging the Government to put in place a package of support at the Budget to ease pressure on low-income households and prevent further debt.
As well as urging the Government to reinstate the £20 in Universal Credit, the report also recommends that the Government provide at least £500m additional grant funding via the Household Support Fund for targeted debt relief.
It is also essential to address the systemic drivers of debt including through writing off Tax Credit debts when people move onto Universal Credit and addressing Universal Credit advance repayments that many households have no option but to take on during the five-week wait for the first payment.
This flaw in the design of the benefit has long been criticised by food banks and anti-poverty groups for causing ‘destitution by design.’
Katie Schmuecker, Deputy Director for Policy & Partnerships at JRF said: “There is a debt crisis hanging over millions of families on low incomes. Behind these figures are parents gripped by anxiety, wondering how they will put food on their children’s plates and pay the gas bill; young people forced to rely on friends to help cover their rent and avoid eviction.
“While many households on higher incomes have enjoyed increased savings and rising house prices during the pandemic, people on low incomes are under serious financial pressure that shows no sign of abating. As a society, we believe in protecting one another from harm. As costs pile up and incomes have been cut, we urgently need to rethink the support in place for people at the sharp end of the cost of living crisis.
“The Budget is about priorities. We know the Chancellor is capable of taking bold action to protect people from harm when it is required. Reinstating the £20 per week increase to Universal Credit and boosting funding for councils to tackle debt must be priorities in next week’s Budget. We must give families the firm foundations they need to flourish and take part in our economic recovery.”
A new briefing highlights shocking inequalities faced by people in minority ethnic communities in Scotland, with unequal access to secure, well-paid work, affordable housing and social security contributing to significantly higher poverty rates for this group.
Its key findings include:
Almost half of children in minority ethnic communities in Scotland are growing up in poverty (48%). This is double the rate for all children (24%)
Workers from minority ethnic communities earn on average £2,300 less per year than white workers
These workers are more than twice as likely (11%) to be on insecure work contracts compared to white workers (5%)
30% of minority ethnic households rent their homes privately which is generally the most expensive type of housing, compared to 13% of white households
The analysis by the Joseph Rowntree Foundation (JRF) shows two in five people in minority ethnic communities in Scotland live in poverty, which is twice the national average.
While poverty rates for white people have remained relatively stable over the last 20 years, for people in minority ethnic communities poverty has increased.
Shockingly, almost 1 in 2 children in minority ethnic communities grow up in poverty. In 2017 the Scottish Parliament unanimously agreed ambitious targets to reduce child poverty to under 18% by 2023/24, and to under 10% by 2030. In doing so they identified several ‘priority groups’ including minority ethnic families.
Worryingly, Scotland is not on track to meet these targets, and in this ‘priority group’ poverty levels have been steadily increasing.
The analysis paints a stark picture of the labour market for minority ethnic people in Scotland, one of comparatively low pay, high underemployment and high job insecurity compared to white people, as well as high in-work poverty. A worrying 3 in 10 minority ethnic people are in poverty despite at least one person in the family working, compared to 1 in 10 white people.
As well as a significant pay gap of £1.26 per hour compared to white workers, workers in minority ethnic communities are also more likely to be ‘underemployed’, which is not being able to work as many hours as desired, and to be employed on insecure contracts.
15% of minority ethnic workers were underemployed in 2019, compared to 9% of white workers. Insecure contracts such as zero hours, temporary and seasonal contracts are characterized by a lack of predictability as to when and how many hours will be worked and are a driver of in-work poverty.
These are more than twice as common among minority ethnic workers (11%) compared to white workers (5%).
The report also highlights that minority ethnic women are significantly more likely to be economically inactive (45% compared to population average of 22%) but a lack of data prevents detailed analysis of the drivers behind this.
Existing research suggests that caring responsibilities, a lack of suitable, affordable childcare, and discrimination based on ethnicity, gender and religion all play a part.
As well as these constraints on ability to earn, the report also finds that it costs more to be from a minority ethnic community in Scotland. You are more likely to live in unaffordable housing, and more likely to live in the private rented sector which is generally the most expensive tenure and one that has fewer rights and a higher chance of having to move compared to other tenures.
Only 4% of people from minority ethnic communities are homeowners in Scotland, with only 1% of this group enjoying the security of owning their home outright without a mortgage.
JRF is urging far greater urgency from the UK and Scottish Governments, along with employers and trade unions, to create a labour market that offers equal opportunities for minority ethnic workers and offers a route out of poverty.
A key frustration in compiling the report was the lack of data available for people from minority ethnic communities in Scotland, which lags behind what is available for the white population. It creates a deeply concerning inequality in Scotland’s ability to understand the high poverty rate for this group, let alone tackle it.
Chris Birt, Associate Director for Scotland at JRF said: “While it is wrong that any child in Scotland is growing up in poverty, it is appalling that children from minority ethnic communities are so much more likely to have their childhoods blighted by hardship than their white peers.
“The clock is ticking on our child poverty targets, and it is deeply concerning that things are actually getting worse, not better, for children in minority ethnic communities despite them being a priority group for the Scottish Government. But this is not just about meeting targets. It is about stamping out the appalling racial inequalities that are holding back children across our country.
“Higher poverty rates for people in these groups are frightening but they are not inevitable. Our analysis suggests that minority ethnic communities face barriers at every turn, from employment to housing to social security support. The UK and Scottish governments, and employers, must work with urgency to remove these barriers.
“If the Scottish Government wants to reduce racial inequalities in Scotland it must start collecting the appropriate data. Children in minority ethnic communities have been named a priority, but until we can accurately measure the problem, how much of a priority can they really be?”
The first annual report of how Edinburgh is progressing in its aim to end poverty by 2030 has detailed significant positive developments taking place in the Capital.
It is a year since the Edinburgh Poverty Commission, an independent group sponsored by the City of Edinburgh Council in 2018 to define the steps the city needed to take to end poverty, published its final report.
In the first 12 months following publication of that call to action, the work of the Council and partners has involved building a strong foundation for the long-term actions needed to change ways of working and prevent poverty in Edinburgh, as well as providing immediate improvement and upscaling of support for people experiencing poverty in the city.
The latest data on poverty rates in the city show that an estimated 78,900 people in Edinburgh were living in relative poverty after housing costs in the period to 2020, including 16,100 children. Most commentators project a risk of significant rising poverty across the UK during the next 12 months, driven by rising living costs, energy costs, slow wage growth and benefits changes.
In response to this challenge, the commitment to end poverty in Scotland’s Capital is now one of three strategic priorities embedded in the new Council Business Plan approved earlier in the year.
The plan outlines actions to ensure that the Council is on track to end poverty by 2030 by meeting targets set by the Commission and deliver the End Poverty Plan 2030.
This first annual progress report was discussed by Councillors on the Policy and Sustainability Committee yesterday (Tuesday 5 October) with the debate taking place during the nationwide Challenge Poverty Week.
The report outlines key actions delivered in 2021 for providing immediate crisis support to people in need, expanding income maximisation services, promoting fair work, improving access to employability support, helping those at risk of homelessness and improving prospects, opportunities, health and wellbeing.
Specific outcomes described in the report include:
Over 44,000 crisis and community care grants delivered in the past year (more than double the previous year) alongside 8,800 Free School Meal payments and 8,300 School Uniform Grant payments (a 50% increase in take up). In addition, led by the third sector, partners across the city provided 45,864 meals as food parcels and 3,654 pre-prepared meals during the first half of 2021 alone for people in food crisis
Investment in advice and income maximisation services across the city. Council and third sector work in this area has secured a total of £22m of financial gains for Edinburgh citizens through improved access to entitlements and reduced costs
Expansion of the successful the Discover! programme to help 671 families and 1,346 children with support to reduce and prevent food and financial insecurity, doubling the number of families supported this year
Delivering £41.5m of Council investment in building new homes and through partnership working, reducing the number of people sleeping rough in Edinburgh to 10 or less on any given night, down from 80-120 before the pandemic
Supporting 3,800 people in Edinburgh through Council funded employability programmes
Committing to pay all Council staff the Scottish Local Government Living Wage, changing the pay structure so that 4,400 employees in grades 1 to 3 received a pay uplift
Leading a new action group of employers committed to making Edinburgh a Living Wage City, with a goal to encourage 500 new living wage accredited employers in the city in the next five years.
These outcomes have been given additional financial support thanks to an extra budget investment of over £2.5m earlier in the Spring directly focused on meeting the Edinburgh Poverty Commission actions.
Last year’s report marked the end of the work of the Edinburgh Poverty Commission and the start of a movement that needs to take root to create an Edinburgh without poverty.
As a legacy, Commissioners helped to develop End Poverty Edinburgh – a new independent group of residents with first-hand experience of living on a low income and their allies who want to be part of shaping the solutions. With the support of the Poverty Alliance, End Poverty Edinburgh has been meeting regularly throughout 2021 and aim to raise awareness of poverty in Edinburgh, influence decision-making and hold the city to account.
Councillor Cammy Day, Depute Chair of the Edinburgh Poverty Commission and Depute Leader of the City of Edinburgh Council, said: “Whilst there has been positive progress made in the first year since the Commission’s call to action no one is underestimating the scale of the challenge we face.
“Tackling poverty is one of our key priorities as a Council and our 2030 target is ambitious but one I’m convinced can be achieved.
“There’s no doubting the enormous impact the pandemic has had on families in this city especially those on the lowest incomes. However our work to limit this impact has seen 44,000 crisis and community care grants issued, over 8,000 free school meal payments and an action group of employers set up to make Edinburgh a living wage city to help lift 40,000 city workers out of low pay.
“We are one year into a long and difficult journey, but if all our partners, communities and residents work together, along with support from the UK and Scottish Governments, we have a once in a lifetime opportunity to make a real difference to those most in need.”
Council Leader Adam McVey said: “As a city, we’re trying to eradicate poverty by the end of the decade and we’re the first local authority in the UK to set such a target. Tackling poverty and inequality in our city drives the choices we are making as a Council such as our new business plan which has ending poverty by 2030 as one of its three core priorities.
“Additional investment is also required and this Spring we agreed a budget package of £2.5m specifically targeted at poverty. This is expanding our money advice and income maximisation services, providing new resources to help those at risk of homelessness, increasing our Discover! programme to help families reduce and prevent food and financial insecurity and the relaunch of the Edinburgh Guarantee to help people of all ages into work or learning. Last year we spent or administered over £100m in core anti-poverty measures to support our citizens.”
“We have made an encouraging start but these are just the first steps and it’s critical the positive work of the past year continues. This isn’t something the Council can achieve in isolation, however, and we need a Team Edinburgh effort and Governments supporting our efforts through housing and welfare policies if we’re going to succeed in meeting the call to action the Commission has set for us all to end poverty in Edinburgh.”
This morning, around 5.5 million families across the United Kingdom are waking up £1,040-a-year worse off due to the Prime Minister imposing the biggest ever overnight cut to social security.
Despite fierce opposition from across the political spectrum, his government has pressed ahead with this controversial cut which will cause immense, immediate and avoidable hardship.
As the cut comes into effect today, the Prime Minister must face the five most serious consequences of his cut:
Half a million more people pulled into poverty, including 200,000 children.
Makes social security wholly inadequate by reducing the main rate of out-of-work support to its lowest level in real terms since around 1990 and its lowest ever level as a proportion of average earnings.
Around 20% of all working-age families across the UK have lost £1,040 a year. 6 in 10 single parent families will be affected by this cut.
1.7 million people who will experience this cut to Universal Credit are unable to work – due to caring for others, disability, or illness – a promise of higher wages will do nothing to help them.
The cut takes £6 billion of spending power out of local economies. The cut has the most severe impact in Yorkshire and the Humber, the North East, North West and West Midlands, although no region will be left unscathed.
Helen Barnard, Deputy Director of the Joseph Rowntree Foundation, said:“Today the Prime Minister has imposed the biggest ever overnight cut to social security. It makes a mockery of his mission to level up.
“Despite overwhelming opposition, he is ploughing ahead with a cut which fundamentally undermines the adequacy of our vital social security system as we face a cost-of-living crisis. This is not building back better, it’s repeating the same mistakes made after the last financial crisis.
“The Government says a key test of levelling up is improving living standards, yet they have just made around 5.5 million low-income families £1,040 a year worse off. People’s bills won’t get £87-a-month cheaper from today, in fact they are going up. Ministers’ arguments in recent days beg the question: has the party that created Universal Credit forgotten the purpose of the system?
“The Prime Minister is abandoning millions to hunger and hardship with his eyes wide open. Low-income families urgently need him to reinstate this vital lifeline.”
Participants in the Covid Realities project responding to the Prime Minister’s comments on the eve of the cut:
“My husband has been in his job for 25 years +, he hasn’t received a pay rise in 5 years and has recently been told there’s no way he will get one anytime soon.
So I’m sorry but there’s no fix there for us. Once again the only option is to struggle and I’m tired of it.” – Emma, England, Covid Realities
“He has no idea how tough it is and how hard people are working to make ends meet!
It is sickness inducing that he completely misses the point that families will either be cold or hungry due to this cut.” – Kim, Wales, Covid Realities
“Fuel and food is on the increase and … families on a low income cannot afford to absorb these costs.
“It is short-sighted to not think of the long term costs involved when already impoverished working families cannot sustain themselves.” – Aurora, England, Covid Realities
“So our prime minister has said he knows it is tough for people on low incomes, does he honestly? … How as parents can we support our children when we are going without food, hungry and unable to concentrate and even sleep at night with worry and stress, do you really understand?
… I would invite any MP to come and actually experience the day to day drain of living on low income and the impact that has on our mental and physical wellbeing.” – Caroline, Northern Ireland, Covid Realities
Political consequences:
413 parliamentary constituencies across Great Britain will see over a third of working-age families with children hit by the planned £1,040-a-year cut to Universal Credit and Working Tax Credit.
Of these 413 constituencies, 191 are Conservative – 53 of which were newly won at the last general election or in a subsequent by-election.
In 35 local authorities across Great Britain, 50% or more of working-age families with children will be impacted by the planned cut.
“THE NASTY PARTY IS WELL AND TRULY BACK”
Edinburgh Pentlands SNP MSP Gordon MacDonald has condemned the £20 a week cut to Universal Credit, which comes into force today. The First Minister of Scotland, the First Minister of Wales and the First Minister of Northern Ireland have also condemned the measure.
The previous week, the Scottish Parliament voted overwhelming to support cancelling the Tory UK Government’s planned £20 a week cut to Universal Credit.
Gordon MacDonald also raised the matter with the Cabinet Secretary for Social Justice, Housing and Local Government, Shona Robison seeking information on what representations the Scottish Government has made to the UK Government.
Ms Robison confirmed that the Scottish Government had written to the UK Government on eight separate occasions since March 2020 to ask it to retain the much-needed £20 uplift. In addition on 30 August, Ms Robison joined colleagues from Wales and Northern Ireland to write to the UK Government to urge it to retain the uplift. They are yet to receive a response.
SNP MSP Gordon Macdonald for Edinburgh Pentlands said: “The Scottish Parliament overwhelmingly spoke and demanded the Tory UK Government halts their plans to scrap the uplift to Universal Credit.
“Sadly, we also witnessed every single Tory MSP failing to stand up to their Westminster bosses in opposing the £20 a week cut – the biggest welfare cut since the 1930s at the worst possible time. Even former Scottish Tory leader, Ruth Davidson and six former Tory DWP Secretary of States, opposed the cut.
“I am standing up for the 32,022 households impacted across Edinburgh, but the Tory Government at Westminster has now implemented their plans that will rip more than £1,000 a year out of the hands of the most vulnerable at a time when they need it most.
“I am quite frankly shocked, but not surprised, that the Scottish Tory MSPs not only voted to back the Universal Credit cut which will condemn thousands of families to poverty, but actively defended it – the Nasty Party is well and truly back.
“History will remember them for this – Scottish Tory MSPs are letting down thousands of families and children with this callous cut in favour of propping up their Tory chums in the UK Government who are imposing these policies on the people of Scotland.
“This demonstrates once again how the people of Scotland cannot afford to continue to suffer under Westminster control. We need to have the option of choosing a different path in a referendum which can give us the full powers of independence where we can build a fairer Scotland.”
Edinburgh School Uniform Bank has successfully secured £15,000 thanks to Scotmid Co-operative’s Community Connect award scheme.
Edinburgh School Uniform Bank, which distributes school uniform to families in Edinburgh who are facing financial hardship, was awarded the funding after being shortlisted by the convenience retailer as one of three good causes and charities in the East of Scotland to receive financial support from an £25,000 pot.
Other recipients of funding in the East include Canine Concern Scotland Trust, which provides therapy dogs for patients in hospital after a stroke or suffering traumatic brain injuries, and Scottish Huntington’s Association (see below).
Julia Grindley, Chair of the Board of Trustees at Edinburgh School Uniform Bank (above) said: “We are absolutely delighted to receive a £15,000 Scotmid Community Connect Award.
“This award will allow us to provide school uniform and warm jackets to over 600 local children. This funding will make a huge difference to their confidence and their sense of belonging, as well as keeping them cosy through the winter.”
Since Scotmid’s Community Connect launched in 2017, more than £460,000 has been awarded to 42 good cause groups, enabling key projects to come to life in local areas.
Shirley MacGillivray, Head of Communities and Membership at Scotmid, said: “Community Connect is one of the main ways we can support those communities that we serve and we are delighted to provide Edinburgh School Uniform Bank with this funding, which will help them to continue providing vital services.
“Times remain challenging for many people; being able to help improve the lives of others across the country is one of the very reasons we exist.”
Scottish Huntington’s Association has successfully secured £5,000 thanks to Scotmid Co-operative’s Community Connect award scheme.
The Association, which provides 1-1 advice, peer group work sessions, youth mental health services for children with a parent living with Huntington’s Disease and have a 50% chance themselves of inheriting the condition, was awarded the funding after being shortlisted by the convenience retailer as one of three causes and charities in the East of Scotland to receive financial support from an £25,000 pot.
Gemma Powell, Senior Fundraiser from Scottish Huntington’s Association said: “We are absolutely delighted to receive a £5,000 Scotmid Community Connect Award towards Scottish Huntington’s Association Youth Service.
“This funding will help us bring back our annual youth camp which is attended by young people growing up in families impacted by Huntington’s disease across Scotland.
“This camp offers young people the chance to make and catch up with friends, share experiences, learn more about Huntington’s disease and, for many, enjoy a break from caring responsibilities. We’re so grateful to Scotmid and their members.”
Mel Hughes, CEO of Canine Concern Scotland Trust said: “We are absolutely delighted to receive a £5,000 Scotmid Community Connect Award.
“This award will allow us to develop our Therapet® Visiting Service in the NHS Lothian area, starting with the Western General Hospital in Edinburgh.
“This funding will make a huge difference to patients recovering from a stroke or neurological condition, who will benefit from a Therapet® visit which will aid their physical, mental and emotional recovery.”
Since Scotmid’s Community Connect launched in 2017, more than £460,000 has been awarded to 42 good cause groups, enabling key projects to come to life in local areas.
Chancellor of the Exchequer Rishi Sunak made the keynote speech at the Conservative Party conference in Manchester yesterday. On the week the Tories will cut the £20 Universal Credit lifeline, the Chancellor told the conference:
Whatever it takes.
That phrase, and those press conferences, were my introduction to so many of you as Chancellor.
It was daunting to face such a challenge in my first days in office. And what it also meant is that more than a year has gone by before I had the chance to meet you all properly. And that is why these last few days have been such a joy. Meeting you all face to face and hearing so many of you say to me “Wow, you’re even shorter in real life!”
Nothing can ever prepare you to become Chancellor, especially in recent times. There have been occasions where it really did feel that the world was collapsing. In those moments, there are certain things I fell back on. Yes, my family. Yes, my colleagues. Yes, my tremendous Treasury team.
And yes, the person who made all this possible, the person who delivered a thumping Conservative majority, my friend, our leader, the country’s Prime Minister, Boris Johnson.
But the other thing I fell back on is something we all have in this room. Our values. Our Conservative values.
I believe in some straightforward things.
I believe that mindless ideology is dangerous. I’m a pragmatist. I care about what works, not about the purity of any dogma. I believe in fiscal responsibility. Just borrowing more money and stacking up bills for future generations to pay, is not just economically irresponsible. It’s immoral.
Because it’s not the state’s money. It’s your money.
I believe that the only sustainable route out of poverty comes from having a good job. It’s not just the pounds it puts in your pockets. It’s the sense of worth and self-confidence it gives you. So I will do whatever I can to protect people’s livelihoods, and create new opportunities too.
And when it comes to those new opportunities, I am very much a child of my time. I spent the formative years of my career working around technology companies in California. And I believe the world is at the beginning of a new age of technological progress which can transform jobs, wealth, and transformed lives.
So: pragmatism. Fiscal responsibility. A belief in work. And an unshakeable optimism about the future. This is who I am. This is what I stand for. This is what it will take. And we will do whatever it takes.
Our Plan is Working
And there can be no prosperous future unless it is built on the foundation of strong public finances.
And I have to be blunt with you. Our recovery comes with a cost.
Our national debt is almost 100% of GDP – so we need to fix our public finances. Because strong public finances don’t happen by accident. They are a deliberate choice. They are a legacy for future generations. And a safeguard against future threats.
I’m grateful, and we should all be grateful to my predecessors and their 10 years of sound Conservative management of our economy. They believed in fiscal responsibility. I believe in fiscal responsibility. And everyone in this hall does too.
And whilst I know tax rises are unpopular. Some will even say un-Conservative. I’ll tell you what IS un-Conservative.
Unfunded pledges.
Reckless borrowing.
And soaring debt.
Anyone who tells you that you can borrow more today, and tomorrow will simply sort itself out just doesn’t care about the future.
Yes, I want tax cuts. But in order to do that, our public finances must be put back on a sustainable footing.
Labour’s track record on the public finances speaks for itself.
Since 2010, we’ve had 5 Labour Leaders, 7 Shadow Chancellors and innumerable spending pledges. And in all that time they still haven’t got the message. The British people won’t trust a Party that isn’t serious with their money. That’s why they vote Conservative.
We must never forget that the fundamental economic differences between us and Labour run very deep.
Differences not just about debt and borrowing but about how to deal with the real pressures people face in their lives.
And right now, we are facing challenges to supply chains not just here but right around the world and we are determined to tackle them head on.
But tackling the cost of living isn’t just a political sound bite. It’s one of the central missions of this Conservative government.
Picture this: you’re a young family. You work hard, saving a bit each month. But it’s tough.
You have ambitions for your careers for your children.
You want to give them the best more than you had.
Now you tell me: Is the answer to their hopes and dreams, just to increase their benefits?
Is the answer to tell that young family the economic system is rigged against you, and the only way you stand a chance is to lean ever more on the state?
Be in no doubt, that is the essence of the Labour answer.
Not only does Labour’s approach not work in practice. It is a desperately sad vision for our future.
But there is an alternative. An approach focused on good work, better skills, and higher wages.
An approach that says: ‘Yes, we believe in you. We will help you. And you will succeed.”
And better still, it’s more than words. It’s a plan in action. A Conservative plan and Conference it is working.
We’re giving people the means and opportunities to help themselves
Governments rarely get to set the tests by which they will ultimately be judged.
And our test is jobs.
Remember, as economies around the world pulled the shutters down, forecasters were predicting unemployment to reach 12%. Millions of people were on the precipice of losing their jobs, their livelihoods, and their homes.
Well, the forecasts were wrong.
The unemployment rate is at less than 5% and falling. That’s lower than France, America, Canada, Italy, and Spain.
And we now have one of the fastest recoveries of any major economy in the world.
Now it wasn’t that the forecasters had bad models No. It’s just their models did not take account of one thing – and that was this Conservative Government. Our will to act and our plan to deliver.
An increased national living wage. The restart programme. Sector based work academies. Doubling work coaches. Job finding support. Traineeships. Apprenticeship incentives. Skills Bootcamps. And the Prime Minister’s Lifetime Skills Guarantee.
All things we are doing that won’t just help people but will give them the means and opportunities to help themselves.
Our plan for the future
I believe in good work, better skills, and higher wages.
I believe that every person in this country has the potential to become something greater.
And I know that we, and only we, the Conservative party, are the ones who can make that happen.
And our economy cannot be what we need it to be without the courage, creativity and sheer force of will that each new generation brings.
Yet, at its peak just under 1 in 3 workers under 25 were on furlough. One in three.
That’s one million people who didn’t have the fall back of a career history or a network of contacts, and in many cases hadn’t even moved into their first job.
And so what did we do? We created the Kickstart scheme, up running and working in a matter of months. A landmark programme that is helping young people start exciting new careers.
And thanks to our plan, young people, just like John Chihoro who introduced me today, are starting those new jobs in their thousands.
So to give more young people the same chance as John, I can confirm we are expanding our successful Plan for Jobs into next year.
The Kickstart scheme extra support through the Youth Offer, the Job Entry Targeted Support scheme, and our Apprenticeship Incentives. All extended because we believe in the awesome power of opportunity.
And we are going to make sure that no young person in our country is left without it.
But what we do today means little if we don’t also have a plan for tomorrow.
A plan for the future.
A future economy shaped by the forces of science, technology, and imagination.
The years I spent in California left a lasting mark on me, working with some of the most innovative and exciting people in finance and technology. Watching ideas becoming a reality. Seeing entrepreneurs build new teams.
It’s not just about money.
I saw a culture, a mindset which was unafraid to challenge itself, reward hard work, and was open to all those with the talent to achieve.
The future is here
I look across the United Kingdom and that culture is here too in the young people I’ve already spoken about today, unencumbered by timidity and orthodoxy.
And it’s there in our willingness to take risks not just on companies, but on people.
People with the raw potential to create a wave of the most dynamic high growth companies. A wave that will reach the farthest corners of the world.
That optimism, that unshakeable belief that the future, can be different and better was also at the heart of Brexit.
I remember over five years ago being told that if I backed Brexit my political career would be over before it had even begun.
Well, I put my principles first. And I always will.
I was proud to back Brexit. Proud to back Leave.
And that’s because despite the challenges in the long term, I believed the agility flexibility and freedom provided by Brexit would be more valuable in a 21st century global economy than just proximity to a market.
That in the long term a renewed culture of enterprise willingness to take risks and be imaginative would inspire changes in the way we do things at home.
Brexit was never just about the things we couldn’t do. It was also about the things we didn’t do.
That’s why we introduced the super deduction, a UK first in tax policy which is triggering an explosion in capital investment.
That’s why we created the Help to Grow scheme another UK first to help small and medium sized companies digitize skill up and scale up.
That’s why we launched the Future Fund another UK first in government investment backing high potential start-ups.
My point is this: even if you can’t see it yet, I assure you, the future is here.
Now is the time to turn to the future
Last year alone the UK attracted more venture capital investment to our startups than France and Germany combined.
And along with enhanced infrastructure and improved skills, we are going to make this country not just a Science Superpower, not just the best place in the world to do business… I believe we’re going to make the United Kingdom the most exciting place on the planet.
Take Artificial Intelligence. Once the stuff of science fiction. Now it’s reality – and we’re a global leader.
The steam engine kicked off the industrial revolution. Computers delivered automation. The internet brought information exchange.
And as the latest general-purpose technology, AI has the potential to transform whole economies and societies.
If Artificial Intelligence were to contribute just the average productivity increase of those three technologies, that would be worth around £200 billion a year to our economy.
And so today, I am announcing that we will create 2,000 elite AI scholarships for disadvantaged young people and double the number of Turing AI World-Leading Research Fellows, helping to ensure that the most exciting industries and opportunities are open to all parts of our society.
New policy, focused on innovative technology, supporting jobs for the next generation, a sign of our ambition for the future.
Because that’s why we are here. All of us. That’s why we became members of the Conservative party.
That’s why you all give up so much of your time sacrificing things that are important to you in order to help build a better future.
You know, the longer I spend in this job, the more I realise that the worst parts of politics are driven by fear. Fear of change. Fear of losing. The fear of being wrong. Even fear of the future.
And when people get scared they create divisions. They say: “you’re either with us or you’re with them.” But you cannot make progress if you’re pitting people against each other.
That’s what you get from a tired, fearful sort of politics. We saw it last week in Brighton.
It’s not just that Labour don’t like us. They don’t even like each other.
Whereas we, the Conservatives, are now and always will be the party of business and the party of the worker.
The party of the private sector and the public sector.
A party for the old and the young.
The British people want a party that can get things done.
So, at just the moment when it feels like we’ve done enough, that we’ve gotten through, that we can take a rest, we must not stop.
Now is the time to show them that our plan will deliver.
And now is the time, at last, at long last, to finally turn to the future.
Thank you.
Responding to the Chancellor’s speech at Conservative Party Conference, Helen Barnard, Deputy Director of the Joseph Rowntree Foundation, said:“The Chancellor may say he has a plan for jobs but he has no plan for paying the bills.
“He spoke of doing whatever it takes to protect people’s livelihoods, yet he is cutting the incomes of around 5.5 million families by £1,040 a year on Wednesday when we are facing a cost of living crisis.
“It is completely wrong to suggest there is a trade-off between good jobs and adequate social security when they are both essential to improving people’s living standards.”
“This cut will impact many working families and inadequate social security makes it harder for people to seize opportunities whilst they struggle to stay afloat. We must ensure people who are sick, disabled or caring for others and therefore unable to work can meet their needs with dignity.
“To impose the biggest ever overnight cut to social security would be economically irresponsible which is why it is so fiercely opposed from across the political spectrum. The Government can’t credibly claim to be levelling up while levelling down people’s incomes. He must abandon this cut.”
Joseph Rowntree Foundation issues a stark warning ahead of the cut to Universal Credit scheduled for 6 October – the same day as the Prime Minister’s speech at Conservative Party Conference.
New analysis looks at the impact of the Universal Credit cut by local authority.
On Wednesday, as the Prime Minister delivers his speech to the Conservative Party Conference, his government will be imposing the biggest ever overnight cut to social security. This will reduce the incomes of around 5.5 million families by £1,040 per year.
In the Greater Manchester Combined Authority area – the host city of this year’s Conservative Party Conference – around 312,000 working-age families (26%) are facing this historic cut to Universal Credit and Working Tax Credit.
If the Government presses ahead with the cut, it would:
Pull half a million people into poverty, including 200,000 children.
Fundamentally undermine the adequacy of our social security system at precisely the moment when families are facing considerable increases in the cost of their energy bills, prices on the shelves are going up and National Insurance is set to rise in April 2022.
Reduce the main rate of out-of-work support down to its lowest level in real terms since around 1990 and its lowest ever level as a proportion of average earnings.
The Government themselves have admitted this week that families may struggle to meet basic costs, like food and heating, by increasing the funding available for local authorities to give grants to families in emergency situations.
The support available through their newly announced Household Support Fund is temporary and discretionary and is typically reserved for one-off emergency situations such as a broken fridge. This scheme does not come close to meeting the scale of the challenge facing families.
Who will be impacted by the cut?
New analysis finds that in 35 local authorities across Great Britain 50% or more of working-age families with children will be impacted by the planned cut.
JRF has consistently warned that:
Working families make up around 60% of families who will be affected by the cut to Universal Credit and Working Tax Credit.
Families with children (particularly single-parent families), those containing someone who is disabled, and Black, Asian or Minority Ethnic (‘BAME’) families, will be disproportionately impacted by the reduction in Universal Credit or Working Tax Credit.
The cut will have the most severe impact in Yorkshire and the Humber, the North East, North West and West Midlands, although no region will be left unscathed by this decision.
Katie Schmuecker, Deputy Director of Policy & Partnerships at the Joseph Rowntree Foundation, said:“The Prime Minister is abandoning millions to hunger and hardship with his eyes wide open. The biggest ever overnight cut to social security flies in the face of the Government’s mission to unite and level up our country.
“When the increase to Universal Credit was introduced, the Chancellor said it was to “strengthen the safety net” – a tacit admission a decade of cuts and freezes had left our social security lifeline to wear thin and threadbare for families in and out of work relying on it. This planned cut would reverse the progress made and leave it wholly inadequate.
“People’s bills won’t get £87-a-month cheaper from Wednesday and families are already anxious about how they will get through a looming cost of living crisis. This decision is set to plunge half a million people into poverty and shows a total disregard for the consequences. The Prime Minister cannot say he has not been warned, he must abandon this cut.”
Table 1: Top 10 Labour and Conservative majority local authorities with the highest percentage of working-age families with children impacted by the cut
Top 10 Labour majority local authorities affected
Top 10 Conservative majority local authorities affected
Local Authority
% of all working-age families with children impacted by the cut
Local Authority
% of all working-age families with children impacted by the cut
Newham
64
Pendle
58
Leicester
62
Walsall
53
Manchester
61
Great Yarmouth
52
Bradford
61
North East Lincolnshire
50
Oldham
60
Southampton
49
Birmingham
60
East Lindsey
48
Blackburn with Darwen
58
Dover
45
Kingston upon Hull – City of
58
North Lincolnshire
44
Sandwell
58
South Holland
44
Tower Hamlets
58
Nuneaton and Bedworth
44
Of local authorities with no majority party, with the highest percentages of working-age families with children impacted by the planned cut, Middlesbrough (60%) and Burnley (58%) are both coalition-led councils. Blackpool (57%) is Labour minority and Thanet (55%), Peterborough (55%) and Stoke-on-Trent (55%) are all Conservative minority.
Table 2: Families impacted by £20-per-week reduction to UC/WTC in October 2021
Family type
Families on UC or WTC losing £20 per week in October 2021
Number of families (millions)
Proportion of families who lose
% of all working-age families of that type who lose
All working-age families
5.5
100%
20%
Families with someone in work
3.5
64%
16%
Families without someone in work
2.0
36%
33%
Single without children
2.3
42%
18%
Couples without children
0.6
10%
8%
Single-parent families
1.1
20%
61%
Couple-parent families
1.5
28%
25%
Families where someone is disabled
2.8
50%
35%
Families where no one is disabled
2.7
50%
14%
BAME families
1.1
20%
25%
Non-BAME families
4.4
80%
19%
Source: Microsimulation by JRF using the IPPR Tax and Benefits Microsimulation Model and the OBR’s March 2021 forecasts. Breakdowns may not sum to totals due to rounding.
Making this decision with his eyes wide open:
The cut is opposed by six former Conservative Work & Pensions Secretaries, the Northern Research Group of Conservative MPs, the One Nation Group of Conservative MPs, all the devolved administrations, numerous cross-party committees in all nations of the UK. Iain Duncan Smith recently said, “the extra £20 has returned to UC some of the investment that was cut from my original design.”
100 organisations are urging the Prime Minister not to cut Universal Credit. Among the signatories of the joint open letter to the Prime Minister are leading voices on health, education, children, housing, poverty, the economy and other aspects of public policy. (published 2 September)
Scran Academy’s work with young people has been recognised in two separate Industry Awards.
On Thursday 09 September 2021, John Loughton [founder] and the North Edinburgh charity won the Apprenticeships and Skills category at the 2021 Public Sector Catering Awards, that celebrate those working within public sector catering.
Scran are also a finalist in the Charity of the Year category of the Scottish Council for Voluntary Organisations’ (SCVO) Scottish Charity Awards 2021, celebrating the best of Scotland’s voluntary sector and voted for by industry professionals and the public. The winner will be announced at an online ceremony, hosted by Sally Magnusson tomorrow (Friday 1 October).
The Apprenticeships and Skills Award, sponsored by Brakes, recognised that Scran Academy’s catering operations are an integral part of Scran Academy and are essential to delivering confidence-building experiences for young people.
These include the Scran Café which is located in the NHS Comely Bank Centre and currently creates a welcoming haven for frontline NHS workers and clinical trainees.
The charity also runs its Scran Van, which delivers free community meals, feeds youth groups and supports families across the city. These provide our young people with opportunities to learn, gain new skills, work as a team and solve problems in real-life situations.
Scran Academy was up against stiff competition from across the whole of the UK, including Hospitals, Universities, large catering companies and industry bodies. However, thanks to its team of volunteers, staff and young people, Scran’s unique model of bespoke educational support and training won the day.
Scran pipped, amongst others, University College Birmingham, Compass Group UK and Ireland and The National Association of Care Catering to take the award.
For the Charity of the Year Award, SCVO has recognised Scran for ‘coordinating a coalition of charities that produced, packaged and delivered nearly 150,000 meals during the first Covid-19 lockdown, supporting over 1,000 people per week at its height’.
None of this would have be possible without the 220 local people who gave tens-of-thousands of hours back to their communities. In 2020 SCRAN also delivered its most successful Christmas Hamper campaign, selling 222 in total.
The organisation also merged with Prep Table Scotland, opened the Scran Café in partnership with NHS Lothian and launched the Scran Van food truck to tackle holiday hunger across Edinburgh.
Scran Academy founder John Loughton, and Catering Manager, Will Bain, attended the Public Sector Catering Awards ceremony in London.
Scran Academy Catering Manager, Will Bain, said: “It blew me away to be up against catering managers with hundreds, sometimes thousands of employees, and for them to give us recognition for the work we do at Scran.”
Founder of Scran Academy, John Loughton BEM, said: “This nomination is a real vote of confidence in our community work and a recognition in the power of food to change lives.
“Will Bain and his team-work magic at Scran, to ensure food is positive for all people, not just those that can afford it. At Scran we do hand-ups, not just hand-outs and young people go on to change their own lives once they realise people believe in them.”
Scran Academy’s focus is to help young people from across North Edinburgh to overcome learning and life barriers and lead more meaningful lives.
The community-based school Scran runs – the Scran Academy – uses food to support learners disengaged from mainstream school to access qualifications and work.
Despite being less than four years old, the charity has grown and last year scaled its impact to provide meals for thousands of people throughout the pandemic across the city.
Yesterday, Lothian MSP, and Scottish Greens Co-leader, Lorna Slater joined the overwhelming majority of MSPs in voting to oppose the cruel Tory £20 cut to universal credit that is being inflicted by Westminster.
The cut will impact tens of thousands of families in Lothian, cutting their income by £1,040 per year.
Lothian MSP and Scottish Greens Co-leader Lorna Slater said:“The Tories have shown their true colours. This is one of the biggest social security cuts ever seen in this country and could plunge tens of thousands of families in Lothian into despair.
“It is particularly unwelcome at a time when so many people are still struggling with the impact of the pandemic.
“£20 a week may not be a lot to the Prime Minister and his colleagues, but for far too many families it is crucial to their budgeting and their wellbeing. For many people across this city, it could be the difference between a warm home and a cold one this winter
“Many people claiming universal credit are in fact in work. The so-called uplift was not an act of generosity, but an admission of failure – an admission that the system had been so damaged by cuts that it was no longer able to provide adequate support for people needing help with their incomes for reasons beyond their control.
“The cut is symbolic of a UK government that knows the price of some things but the value of nothing. It shows why Scotland needs the powers to chart a different path that prioritises human need and builds a fairer, greener recovery for all.”
Holyrood Social Security Minister, Edinburgh Northern & Leith MSP Ben Macpherson, closed yesterday’s debate:
A lower-income couple with two young children where one adult is working full-time is going to need to find an additional £31-a-week to cover the cost of living and falling benefit rates from October, according to new analysis by the Joseph Rowntree Foundation.
In an interviewyesterday, the Business Secretary warned “it could be a very difficult winter”. This comes amid growing concern across the political spectrum that the rising cost of living is about to put immense strain on low-income families.
If the Government proceeds with cut to Universal Credit as planned, changes to the energy price caps, and inflation means that at the same time this couple family are trying to compensate for the £20-a-week they had before the cut, they will soon need to find an additional:
£3 for energy (assuming pre-payment meter)
£8 for other living costs
= an additional £11 per week from October.
On top of this, the same family would need to find an extra £2.50 to cover the increase in National Insurance Contributions from April 2022 because of the Health and Social Care levy.
This would mean in total this family may need to find an additional £13.50 per week or £710 per year (around the entire clothing and footwear annual budget for this kind of family) as well as losing £20 a week from Universal Credit. For this family, the extra costs alone equate to around 3.5% of their weekly disposable income.
Peter Matejic, Deputy Director of Evidence & Impact at the Joseph Rowntree Foundation, said:“Millions of low-income families are incredibly anxious about how on earth they are supposed to make ends meet from next month.
“Ministers rightly recognise this is shaping up to be a very difficult winter, yet there is little sign of them taking the decisive steps that are necessary to avoid real hardship for low-income families.
“The growing concern about the cost of living reinforces why cutting Universal Credit makes absolutely no sense. Social security is a key defence in protecting families from precisely these sorts of economic shocks, but the Government is on course to impose the biggest ever overnight cut to the system and leave families with an inadequate lifeline.
“The Prime Minister urgently needs to keep the £20-a-week increase to Universal Credit in place. Rising child poverty, soaring demand for food banks, people worrying about keeping their homes and covering the cost of bills, flies in the face of uniting and levelling up our country.”
