Charities urge action to prevent poverty worsening post-Brexit

15 Feb 19

Steps must to be taken to protect more people from falling into poverty in the wake of a no-deal Brexit, poverty charities have urged.

Amendments need to be made around the working-age benefits freeze, universal credit payment delays and EU replacement funding, a group of 10 charities have said in a letter published today.

The open letter to MPs warned that without changes to these policy areas, the number of people living in poverty in the UK – already 14 million – could grow in the event of a no-deal scenario.

Signatories called for the government to lift the freeze on working-age benefits and tax credits, which has been in place since April 2016.

The charities said that, during this time, prices have continued to rise, and the annual cost of living for people on low incomes has shot up by £900 between April 2016 and November 2018.

The Joseph Rowntree Foundation estimates – based on Bank of England projections of inflation after a smooth EU exit – that maintaining the freeze for another year will result in 10.7 million people in poverty missing out on £220 per year to help cover the increased cost of living, and 200,000 more people being locked in poverty.

In a no-deal scenario, and with potentially higher prices, the impact could be more severe, the groups said.

The letter also called for the five-week wait for new claimants of universal credit to be cut by more than half – to two weeks. 

A no-deal Brexit increases the likelihood of people losing their jobs or having to reduce their hours, meaning more new claims for universal credit, the charities predicted. Currently, there is a minimum five-week waiting period for new claimants, including one week's processing time.

A briefing note published alongside the letter said: “Five weeks is simply too long for them to wait for the money they need to cover essentials and stay out of debt.”

The third recommendation in the letter was to produce an “emergency stimulus package” for the parts of the country most exposed to the impacts of disruption to trade in the event of a no-deal.

JRF suggested the government bring forward some of the funding for the UK Shared Prosperity Fund – which will replace EU regional funding from 2020 onwards – and give it to areas in need.

The letter said: “Many places which are most exposed to the impacts of disruption to trade are also often those which have been in the grip of poverty for decades. The government should provide a stimulus package of support for jobs and skills that is ready to deploy immediately.”

A government spokesperson said: “Our priority is to support people to improve their lives – and that will remain a priority after we leave the EU.

“But we know that some people need more support. That’s why we’re spending £90 billion to support families who need it, and by 2022 we will be spending £28 billion more on welfare than we do now.”

The letter was signed by leaders from the following charities: Action for Children, Barnardo’s, Child Poverty Action Group, National Children’s Bureau, Poverty Alliance, Shelter, Trussell Trust, Turn2us and ATD Fourth World.

Last month, MP Stephen Kinnock spoke to PF about the “tremendous anxiety” caused by lack of detail on the UK Shared Prosperity Fund.


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