Revealed: Top 20 places most at risk from withdrawal of emergency Covid support
Video report by ITV News Business and Economics Editor Joel Hills
The coronavirus vaccination rollout continues apace and the government hopes to be able to lift restrictions entirely over the next four months.
At some point the emergency support which has kept many households and businesses afloat will be phased out too. Some communities have become more reliant on it than others.
The Joseph Rowntree Foundation has identified the parts of the UK where there has been sharp increases in both the number of furloughed workers and Universal Credit claims since the pandemic began.
The list of twenty places includes seaside resorts, like Great Yarmouth and Margate, and towns whose fortunes are linked to a large airport, like Luton, Crawley and Slough.
The list is dominated by London boroughs. Covid-19 has not been kind to the capital. Tourists and commuters have stayed away, service-based businesses have suffered and unemployment has risen sharply in Barking and Dagenham, Lewisham, Newham, Tower Hamlets and Brent.
These places have a lot riding on the decisions the chancellor makes in the Budget next week.
ITV News has learned Rishi Sunak plans to extend the Job Retention Scheme, which is due to end in April, until October. Around 4.7 million jobs were furloughed, as of the end of January.
The chancellor is also preparing to extend the £20 a week “temporary” uplift to Universal Credit - which is also scheduled to end in April - for another six months.
The Joseph Rowntree Foundation (JRF) believes this would be a mistake.
“Anything less than a year-long extension [of the £20 top-up] is taking a high-risk gamble that could pull half a million families into poverty at a time, later this year, when unemployment is higher than it is now,” says Rebecca McDonald, a senior economist at JRF.
There are several arguments for retaining the uplift.
Firstly, it is worth £1,000 a year for six million families in the UK who are up financially vulnerable.
Secondly, withdrawing it would hold back the recovery. All the evidence shows that Universal Credit is spent by those who receive it; this is money that would generate economic activity.
Thirdly, welfare support in the UK is less generous that in many other advanced economies. The Institute for Fiscal Studies calculates that basic support for the unemployed who do not have children has not risen in 50 years while average earnings have more than doubled. It argues the uplift is affordable (at a cost of £6.5 billion a year) and should be made permanent
Fourthly, by phasing out the £20 uplift at the same time as furlough support, the chancellor would be making universal credit significantly less generous at precisely the time when there a high risk of a rise in unemployment.
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