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OPINION: Families face being swept up by poverty in wake of Covid

by Mhoraig Green, CAS Strategic Lead on Social Justice.

This article was first published in the Herald on 7 October 2020.

It’s Challenge Poverty Week, and that presents an opportunity for people across Scotland to raise their voices against poverty and to show that we all want to live in a more just and equal society.

Every day Citizens Advice Bureaux across Scotland help people who have been pushed to the brink by low wages, insufficient social security and high housing and energy costs. We help build a fairer society through the provision of free and independent advice and by using evidence about people’s real-life experiences to influence positive social change.

Early in the pandemic we talked in this column about how information from CABs across Scotland suggested that many people were at risk of being sucked into a cycle of poverty where income from work has stopped or been cut, and the social security system is not able to provide a decent safety net. When that happens we know that people face impossible decisions to meet their living costs and they often fall into debt, or increase the levels of debt they are already carrying. Six months on and we’ve seen demand for advice on redundancy, charitable support and debt rise as predicted. With the critical support provided by the Job Retention Scheme finishing this month, and having identified key gaps in the support provided by the replacement scheme, we are increasingly concerned about a winter of unemployment. And if that unemployment becomes long-term there is a risk of people being pulled so far into poverty that it will be difficult for them to escape.

But Challenge Poverty Week provides an opportunity to take stock of what has to happen next in our fight against poverty. We believe it’s important that everyone has a sufficient income to allow them to live in dignity, and that the state must guarantee this through social security when people are unable to work, or when their income from work is inadequate. We have called on both the UK and Scottish governments to boost the social security they provide to help people weather the storm of Covid-19 without being swept into poverty.

At the start of this week we called on the UK Government to maintain the £20 a week increase in the basic rate of Universal Credit that they announced at the beginning of the pandemic. Our analysis of the budgets of people on Universal Credit who have received our help with complex debt over the summer reveals that, without that additional £20 a week, 8 in 10 of these people would fall short on meeting their bills. Instead, that additional money has reduced the numbers of these clients who are unable to cover their living costs by more than a fifth. So the extra £20 per week has clearly had a positive impact in protecting the finances of people on Universal Credit, but we are concerned that if it is removed as planned in April 2021, thousands of people will face an income crisis.

When we talk about the inadequacy of benefit levels it can be difficult for those who have never relied on them to understand the small amounts of money involved. Many people turning to Universal Credit for the first time as a result of losing employment due to Covid-19 are facing a real income shock and a struggle to balance their household budgets. Maintaining the £20 a week uplift will go some way towards alleviating this, but we need to challenge the adequacy of these payments over the longer term too. If nothing else we hope that exposure of more people to Universal Credit will help build support for change.

There’s scope for the Scottish Government to use its powers to protect people’s incomes too. In our submission to its action group on Economic Recovery in the summer we asked the Scottish Government to consider how its social security powers can be used to guarantee a minimum income for people in Scotland. We are pleased to now be involved in discussions about income adequacy that will inform its work on social renewal. The Scottish Child Payment, which will get under way early next year, is one way that families in Scotland can be lifted out of poverty, but to eradicate poverty altogether will require a much more radical re-design of the system, and action from the UK Government too.

Going forward, we’d like to see the social security system recognised as a vital public service in the same way as the NHS is. It is important, now more than ever, that people see social security payments as a human right – a hand up, not a hand out – and recognise the important role they play in ensuring that people are not swept away in a tidal wave of poverty as part of the financial fall-out from Covid-19.

Challenge Poverty is a great slogan. It must become action too.