A budget to “level up” our economy?

The Prime Minister has asserted that the days of austerity policies will soon be over and that the UK Government will pursue an agenda of ‘levelling up’ our economy and society. To make this a reality, tomorrow’s Budget must put tackling poverty at its heart. Below are some of the key actions the Chancellor can take.

End the five-week wait for Universal Credit

For too many people across the country, the five-week wait for their first Universal Credit payment is pushing them into poverty, destitution and food insecurity. Indeed, research that we have undertaken in Glasgow has found that the wait is the most negative aspect of Universal Credit for most people.

We know that many people are being forced to rely on family or friends to get by during the five weeks, or are being forced into using food banks to survive. Menu for Change – a project that we undertook in partnership with Oxfam, Child Poverty Action Group and Nourish Scotland – found that the five-week wait has been one of the key factors pulling people into income crisis.

While advance payments are available, our engagement with people accessing Universal Credit has clearly shown that – because advance payments have to be paid back – people are extremely reluctant to take them due to the anxiety and stress that can result from paying them back. When do they take advance payments in order to avoid rent arrears and hunger, they often have huge challenges in managing repayments; with debt and rent arrears often being the end result.

It is clear to us that the five-week wait for Universal Credit is inflicting harm on people who the social security system should be protecting. If we want to act with our society’s shared values of justice and compassion, we must end the five-week wait.

End the two-child limit

The two-child limit on the child element of Universal Credit and child tax credits has meant that the level of support provided to families by the social security system to has been rendered entirely inadequate for too many. As research conducted by the Child Poverty Action Group and others has found, 300,000 children will be pushed into poverty across the UK as a result of the policy, with one million children already in poverty pushed into deeper poverty by 2023/24.

As a society we care about each other and look after one another, so we cannot continue to deny support to families and children who the social security system is supposed to protect. If we are serious about protecting and enhancing the life chances of children across the UK, then the two-child limit must end.

Restore the value of social security

Social security should help to unlock people from poverty, but policies like the freeze on working-age benefits – which removed £370 million of support from people living in Scotland – have meant that people are too often finding themselves in a daily struggle to make ends meet. We are aware that the freeze is ending, but to improve people’s living standards we need to ensure that social security meets their needs.

This means increasing social security benefits – over and above inflation, given the reduction in value that has taken place in recent years – so that everyone has an adequate income and can lead a dignified life. Increasing child benefit by at least £5 a week, for example, would make a significant difference to families who are struggling to stay afloat

Ensure that wages meet people’s needs

It cannot be right to pay workers a wage that keeps them locked into poverty and that does not allow them to have a decent standard of living. The real Living Wage, which is based on the real cost of living, is good for workers, for employers and for the economy.

So while we welcome the government’s commitment to increasing the National Living Wage by 6% from April, with 65% of children in poverty in Scotland living in working households, this still does not go far enough. So we must go further by committing to further increases in the National Living Wage in line with a set adequate standard that keeps pace with the cost of living and average incomes.

With families across the country finding it more and more difficult to get by, we must use this Budget to fulfil the government’s ambitions around ending austerity and levelling up our economy and society. This means taking steps to ensure our social security system is a more compassionate one that loosens the grip of poverty on people’s lives, and that our labour market works for everyone.

More people are projected to be swept into poverty in the coming years; we must act now to stem this rising tide. The Budget presents the government with a key opportunity to do this, and that opportunity must be taken.

Protect workers from the impact of coronavirus

If the coronavirus continues to spread at its current rate there is a high risk that many more people will be swept into already staggering levels of poverty in this country as those self-isolating risk missing out on wages.

While we welcome the much needed extension of statutory sick pay, this will not be enough to protect workers who may need to self-isolate in response to the virus. Statutory sick pay should be significantly increased from its current level of £94.25 to reflect the cost of living, and the qualifying wage of £118 should be removed. Immediate safeguards should be introduced for workers who are deemed as self-employed or are on zero or short hours contracts who will have no recourse to sick pay.