An under-reported crisis

Figures today show that the UK is facing a deeper recession than we did after the Spanish Flu and the First World War. The 11.3% drop in GDP forecast by the Office for Budget Responsibility would the worst in 300 years. But these economic numbers hide a deeper crisis being faced by many people across Bristol. The Resolution Foundation recently highlighted the scale of this hidden challenge which, facing households rather than the Treasury, has been under-reported.

Half of renters do not have enough savings to cover more than a month of lost income. People with less than £1,000 of savings are two-and-a-half times more likely to have spent them during the pandemic than those with £20,000 or more. And people with the lowest incomes are much likelier to have had to borrow to survive. Debt and poverty are rising while income and savings fall. In short: the poorest 20% of Britain has been disproportionately hit by the current crisis – on top of the increase in children living in poverty since 2012. Instead of putting an emergency brake on the minimum wage and public sector pay, as he has chosen to do today, the Chancellor should have given a break to people struggling during this emergency.

Former Prime Minister Gordon Brown, who launched the Alliance for Full Employment that I am proud to be a founding member of, called for national Government to cancel plans to scrap the £20 Universal Credit bonus – which risks taking £1,000 a year away from Britain’s 500,000 poorest families. He is also lobbying for Westminster to take action to raise child benefits, which were uprated together with tax credits from 1997-2010. These moves, together with our successful campaign to extend furlough, would have given hope to people seeing today’s spending review on the news tonight. These changes would have been crucial in laying the foundations to rebuild a better Bristol where nobody is left behind.

The Resolution Foundation also calculates the Living Wage Foundation rate, which we are proud to pay as a local council Our work continues to make Bristol a Living Wage City, despite the difficult economic outlook. Protecting and creating jobs, alongside support to ensure that people do not fall through the cracks, has never been more important. It remains incumbent on the Government to work more closely with, listen to, and empower local leaders on the ground in our cities and regions.