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September 22, 2020

Never the same again

It feels like we’ve hit a major crossroads with the pandemic with all the decisions becoming a matter of choosing between least worst scenarios. Despite this, and in part because the past six months have shone new light on many of the social injustices that large swathes of the population have always lived with, many believe it can also be the catalyst to build back a better system than before. The Poverty Alliance conference next month will explore how to do this. The alternatives, such as those being forecast by the Trussell Trust just don’t bear thinking about.

Britain’s largest food bank network has warned that UK destitution rates will double by Christmas alongside an explosion in demand for charity food parcels, as coronavirus job and income support schemes are wound down.

The Trussell Trust predicts that at least 670,000 extra people will become destitute in the last three months of the year – a level of poverty that leaves them unable to meet basic food, shelter or clothing needs – if the government withdraws Covid support for low-income households.

Despite unprecedented demand for charity food since lockdown – 100,000 people used food banks for the first time between April and June – the trust said ending furlough in October would trigger a rise in food bank use of at least 61% – equivalent to a year-on-year increase of 300,000 parcels.

“Our research finds that Covid-19 has led to tens of thousands of new people needing to use a food bank for the first time. This is not right. If we don’t take action now, there will be further catastrophic rises in poverty in the future,” said Emma Revie, the chief executive of the Trussell Trust.

The trust said the impact of rising unemployment on low-income families after the planned winding down of the job retention scheme raised the prospect of a significant “reshaping of the landscape of poverty, destitution and food insecurity in this country”.

Its forecasts come amid rising concern among poverty analysts and campaigners about the dire consequences of an abrupt withdrawal of furlough at the end of October, together with a failure to retain the temporary £20 a week increase in universal credit and tax credit rates due to end next April.

The trust said withdrawing the £20 a week rise, which would leave millions of people £1,040 a year worse off overnight, would increase food bank use by 10%. This follows estimates by the Joseph Rowntree Foundation, which said last week removal of the uplift would pull 700,000 more people into poverty.

Although the trust welcomed the £9bn Covid welfare package provided by the government since March, it said rising food bank use indicated this was not enough to support people in crisis – 43% of people referred to food banks in April had an income that was “not at a level to sustain a minimum quality of life”.

Analysis of food bank use since lockdown suggested families with children and people who identified as “black or black British” were disproportionately likely to have to use food banks. Only 4% of food bank users were furloughed – suggesting the scheme had had a positive impact on poverty levels.

The income shock experienced by millions as a result of the Covid crisis was vividly reflected in Trussell Trust’s food bank data: 56% of people referred for charity food had reported a drop in household income since early March; 32% of people using its food banks had lost their job.

The trust’s food banks reported extraordinary spikes in demand: Hammersmith and Fulham food bank in west London said it normally gave out 110 vouchers a week, but at the height of lockdown it was delivering food to 150 people a day. Caernarfon food bank said its normal referral rate of 20 people a day quadrupled on peak days.

The trust called on the government to rethink the impending cliff edge on furlough payments, lock in the £20 uplift to universal credit, and reinvest in local welfare schemes. Its forecasts were drawn up by Heriot-Watt University academics and the National Institute of Social and Economic Research.

A government spokesperson said: “We have provided £9.3bn extra welfare support to help those most in need, including increasing universal credit by up to £20 a week, as well as introducing income protection schemes, mortgage holidays and additional support for renters. Meanwhile, since mid-March we’ve supported 3.9m claims to universal credit and made 1.3m advance payments to people who could not wait.

“We have already taken steps to help ease the burden of universal credit debt repayments, including reducing the maximum deduction from 40% to 30% of a claimant’s standard allowance. From October 2021 we will reduce this further to 25%, and we will double the time available to repay an advance to 24 months.”