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London Challenge Poverty Week – we must act now

This week is London Challenge Poverty Week and it is, unfortunately, clear to see that London, alongside the rest of England, is moving backwards in tackling poverty.

In Erith and Thamesmead 41% of children are growing up in poverty which has a devastating long-term impact on children’s mental, physical and education well-being. This cannot be acceptable, and it cannot be ignored.

In 2019, Professor Philip Alston, United Nations Special Rapporteur on extreme poverty and human rights, found that millions of people in the UK are struggling to access their basic human rights, highlighting how so many have been forced into extreme poverty. The report found that women, disabled people and children are disproportionately impacted by poverty.

The impacts of long ignored poverty have been felt even harder during COVID-19 and it is clear that the most vulnerable in society are being hit the hardest. I released a report in August detailing the impacts of COVID-19 on protected characteristics in Erith and Thamesmead after receiving hundreds of emails from people seeking help.

One constituent emailed me due to facing the risk of eviction, they said:

“I am writing this email seeking for support regarding housing because myself and my son are being threatened with homelessness.

I have been going through some housing issues with my landlord’s son since last year who requested that I vacate the property… I was then issued with a Section 21 notice after the end of my tenancy.

My current rent is lower than the normal rent value and getting another accommodation that is affordable has been challenging because I am on low income.”

The average private rent in Erith and Thamesmead consumes 75% of an average single woman’s earnings. The affordable housing crisis and lack of support for renters throughout the pandemic is just one way in that vulnerable people are being pushed further into poverty.

The Trussell Trust anticipate giving out six parcels every minute between October and December this year. However, poverty if not a new phenomenon in London caused by COVID-19, it is an issue that has been massively increasing over the past decade.

Food bank use has doubled across London over the past five years and 72% of families living in poverty are in work.

Despite these startling figures, the Government has refused to accept that urgent action needs to be taken to tackle the growing poverty rates and issues surrounding them.

In June I called for a pay rise for public sector healthcare workers, arguing that poverty contributes to worsening mental health in the workforce; but this was denied by the Government.

In September the Conservative Government was forced into a U-turn on providing children with free school meals over the summer holiday amidst growing child poverty concerns.

Last year London spent over £733m on temporary accommodation for the 57,000 homeless households, including 80,000 children, while over 125,000 homes were either empty or unavailable for rental/purchase across the capital.

It is clear that the Government are ignoring their responsibility to protect people in the UK by allowing millions of vulnerable families to fall into poverty, homelessness and hunger and now more than ever the Government must step up to protect people.

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We need a Back to Work Budget for Erith and Thamesmead

It is clear the Government was too slow to recognise the scale of the health crisis from coronavirus and we are already paying the economic price.

I am increasingly worried that the slow and muddled health response is now being followed by a slow and muddled response to saving jobs. The window is closing to protect existing jobs and encourage firms to invest in creating new ones.

There were 2,780 people in Erith and Thamesmead claiming for Universal Credit and other benefits last month, a rise of 132% since the outbreak of coronavirus. Although this is an imperfect measure of unemployment, it hints at the scale of the looming jobs crisis in our community.

Reports the government has pushed back its next full budget to the Autumn worry me, as we’re already behind other countries like Germany, which announced a full economic package weeks ago.

We need an urgent package of economic measures with a clear focus: Jobs, Jobs, Jobs.

Supporting this, we need a strategic withdrawal of support schemes tailored to the needs of specific sectors and areas.

Nearly 1 in 4 people of working age in Erith and Thamesmead are relying on the Job Retention Scheme (16.7%) or the Self-Employment Income Support Scheme (7.22%).

Labour called for and welcomed these schemes, but we are concerned about their abrupt withdrawal which risks pushing millions of people into unemployment. The Chancellor plans to withdraw support for all sectors and areas of the economy at once and has not linked his plan to other public health measures, such as easing social distancing guidelines where it is safe to do so.

This one-size-fits all approach won’t work for sectors like hospitality. Pubs, restaurants and cafes will be operating well below capacity when they eventually reopen, and their fortunes are closely linked to the decisions that are taken on social distancing. It makes no sense to withdraw support for the 2,315 hospitality workers in Erith and Thamesmead at the same time as sectors that are operating as normal and will need less support.

Similarly, firms relying on tourism face losing the majority of trade from the summer high season. Snatching away all support in October, just as the high season ends, could be ruinous for the tourism sector and the roughly 1,640 jobs it creates in Erith and Thamesmead.

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Erith and Thamesmead see unprecedented 2% unemployment rise

Unemployment has risen to unprecedented levels across the UK with Erith and Thamesmead seeing a rise in unemployment to 5.6% of the adult workforce, just above the average figure for the whole of London and the wider UK.

Centre for Cities, an independent research organisation, has been recording the rise in unemployment rates across the UK between March and April. Data recording the number of people applying for Universal Credit and Job Seekers Allowance shows and increase in unemployment of 850,000, taking the UK wide total to 2.1 million.

Between March and April 2020, an increase of 1,605 people applied for Universal Credit or Job Seekers Allowance in Erith and Thamesmead, a rise of 2%. The Royal London Borough of Greenwich has been affected slightly more than the London Borough of Bexley with a 0.2% higher uptake in this time period.

It is expected that the unemployment rates are likely to have risen between April and May but this data is not yet known. There are also disparities in the unemployment increases in different areas of the UK. London has an average unemployment rate of 4.9% compared with 5.6% in Erith and Thamesmead and 8.9% in Blackpool.

The reasons for differing increases in unemployment are not yet known but it is suspected that places that rely heavily on the most impacted industries such as hospitality, and where people are unable to work from home, have seen a greater impact.

In a letter to the Secretary of State for Work and Pensions to raise concerns about the rise in unemployment locally, I said:

“I am concerned that residents in Erith and Thamesmead will face increased difficulties compared to the wider region of London post-Covid-19 due to decreased local job opportunities and restricted travel routes around London. It is already evident that my constituents have felt more severe impacts compared with the rest of London, as unemployment has risen 0.7% higher than the London average.

Many local businesses have contacted me throughout this crisis detailing their financial hardship and inability to access the SEISS or Job Retention Scheme. As more businesses fall into financial hardship residents in Erith and Thamesmead will be faced with more job losses.

If the working age population in Erith and Thamesmead is going to recover from this crisis there will need to be a specific focus on boosting the local economy, improving transport links and supporting industries that have been hit particularly hard.”

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Erith and Thamesmead MP Abena Oppong-Asare ‘shocked’ at treatment of Universal Credit claimants during Coronavirus crisis

Universal Credit claimants are being denied deferrals on loan repayments to the DWP forcing them into financial difficulties during Covid-19.

In response to criticism of the five week wait claimants face for their first Universal Credit payment the DWP offers loans to help claimants during the wait, these are repaid monthly through deductions in the payment. Abena Oppong-Asare MP has criticised the DWP for continuing these deductions from payments whilst others are being offered three month loan freezes and mortgage holidays due to Covid-19.

One resident who emailed Ms Oppong-Asare for help said:

“Like many other people on Universal Credit I accepted a loan offered to me at the outset of my claim because of the several weeks delay that occurs processing claims. However, loans are subject to immediate repayment and deductions of £110.59 per month have been taken.”

The Government has recently extended the loan repayment period from 12 months to 18 months offering a slight decrease in monthly deductions. Claimants can also request a three month deferral of loan repayments to the DWP due to hardship reasons just one time.

The resident that contacted Ms Oppong-Asare said: “I requested a 3 month deferral last year because I had fallen into rent arrears as a result of the delay processing my Universal Credit claim. At that time no one would have been aware of a future worldwide Coronavirus pandemic.”

The DWP is unable to respond to specific requests for hardship reasons such as a second loan repayment deferral due to restrictions in Government policy.

Ms Oppong-Asare said:

“I am truly shocked at the treatment of my constituent during this unprecedented time. The DWP are deducting £176.68 every month from this person’s payment due to loan deductions and bedroom tax. The country is under huge pressure and the Government should be doing all it can to relieve the financial strain people will face at this time.
Families will be facing higher utility bill payments, higher grocery bills and less work opportunities during the UK lockdown through no fault of their own. The least the Government can do is freeze loan repayments and bedroom tax to ease the burden on those already facing financial difficulties.”

In October 2019, there were 2.6 million universal credit claimants, just over a third of whom were in work. Since March 16th when the Government advised that people should work from home and practice social distancing where possible, the DWP have received over 950,000 applications for Universal Credit.

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