Coronavirus and poverty: Poverty Alliance response

Times of crisis hold a mirror up to our society. In the last fortnight we have seen that our sense of compassion is alive and well as people rush to volunteer, donate, and protect neighbours and loved ones. Our country is a compassionate one; we care about each other and want to protect each other from harm.

But the crisis has also shone a harsh light on some fundamental flaws in the fabric of our society; labour market regulations that do not protect workers and a social security system that pulls people into poverty. We have collectively failed to protect our social safety net.

In the coming months, there is a very high risk that many more people will be swept into poverty. We must focus efforts on the groups who are most at risk to the health impacts of the coronavirus, and we must also recognise the very real and disproportionate impact that will be felt by people on low incomes.

Workers in some sectors such as hospitality and retail face the prospect of unemployment as their employers struggle to survive, whilst those in precarious work are likely to see their income collapse completely. People who remain in work and are entitled to Statutory Sick Pay while they are forced to self-isolate will have to survive on a paltry £94.25 a week. If schools close, families reliant on free school meals may struggle to stay afloat. But we can take action to ensure that people on low incomes can keep their heads above water.

Some welcome measures have been introduced to address aspects of these challenges, but far more is needed.

We are already engaging with Poverty Alliance members to identify the steps that should be taken – by all levels of government as well as by civil society – to respond to this unfolding crisis. But we also need an immediate short-term response.

We are calling on the UK Government to:

Increase social security payments to meet people’s needs

We know that social security payments do not reflect the cost of living but thousands of people will be forced to turn to Universal Credit as job losses begin to increase.

Recent years of benefits freezes and other changes to our social safety net have left the main rate of unemployment benefit lower than in the early 1990s despite growth of more than 75 per cent in the overall economy. Social security benefits must now be significantly increased.  We need to see basic allowances for Universal Credit and ESA doubled from the current level of £73.10. Topping-up child benefit by at least £10 a week would also make a significant difference to families who are struggling to stay afloat. We also need to end the benefit cap to ensure that social security benefits match family needs.

Make Universal Credit payments immediately available

The five week wait for first payments of Universal Credit is already driving destitution across the country. With more people expected to turn to Universal Credit in the coming weeks and months as a result of the economic impact of the virus, we must immediately end the five week wait by making advance payments non-repayable.

Increase Statutory Sick Pay to match the real Living Wage

Increasing numbers of workers will need to self-isolate in jobs where working at home is not possible. People working in low paid sectors are more likely to rely on Statutory Sick Pay. Statutory Sick Pay should be significantly increased from its current level of £94.25 to £349 a week to match the real Living Wage, and the qualifying wage of £118 should be removed. The UK Government should provide support to employers to pay this.

Any temporary measures to provide adequate incomes or protect workers who are sick should be made permanent.

Enable employers to retain staff

We support the idea of a Statutory Retention Pay (SRP) scheme though which firms can retain staff who have no work to do during the crisis. Employers should be compensated by the Government to pay workers at the real Living Wage.

Implement a freeze on utilities, including the internet

Being able to afford energy bills and internet access will be crucial in the coming months as families are forced to stay at home whilst also seeing their incomes cut significantly. Up to 15 per cent of households in Scotland do not have home internet access and more than 600,000 households already live in fuel poverty. Internet access will be especially vital for children as schools move to online-only learning. We urgently need the UK Government to work with utility providers like energy companies and internet providers to implement a freeze on utility bills to ease the pressure on people struggling to cope.

We are calling on the Scottish Government to:

Provide emergency cash support for families

The Scottish Government has made a welcome commitment to provide alternative arrangements for families who usually rely on free school meals. This support should be provided through direct cash support to help keep these families afloat.

Support for people in the rented sector

People living in the rental sector are most likely to be living in the grip of poverty, with people living in the private rental sector particularly at risk. While the UK Government has announced measures to protect home-owners with mortgages, there is as yet little protection for renters. The Scottish Government should support measures like rent freezes – as well as a ban on evictions – that would ease the pressure on people who are struggling to cover their rent during this time.

Support for community and voluntary organisations

Community organisations provide vital support for families and individuals facing poverty all through the year. But in the midst of this crisis they will be under pressure like never before. Many trusts and charitable funders have already made commitments to continue to support groups and organisations. Additional financial support from the Scottish Government is essential if community organisations are to survive and deliver the support needed at this time.

The action we take to protect our most vulnerable in the coming weeks will be a real test of our shared values of justice and compassion.

While urgent action from Governments is paramount, community organisations will be providing vital lifelines to families in the coming months. At Poverty Alliance we want to know how we can best support people living on low incomes at this difficult time. To do this, we will be reaching out to our members to find out how the crisis is affecting them and the organisations who support them, and to understand what protections the Poverty Alliance should to be pushing for in the coming months.

To tell us what issues are affecting you/your services and/or to suggest solutions we should be pushing for, please email Suzi at suzi.murning@povertyalliance.org by Thursday 26th March.