An urgent cash injection is needed to prevent hundreds of thousands of families living below the poverty line this coming winter, a report has revealed.
In a new analysis by the Institute for Public Policy Research (IPPR), in a joint project with the Trades Union Congress (TUC), a “family stimulus” package would save up to 700,000 children from poverty.
It would also boost the economy as the pandemic rages on, adding up to £19bn ($15bn) to GDP – equivalent to more than half a percent of national output.
The organisations said that strengthening the social security system, by doubling child benefit payments or by raising universal credit and tax credits for children, would make a difference to many of the poorest families. The report suggested that social security in the UK is one of the least generous in the developed world.
The report urges the government to maintain the emergency £20 increase to Universal Credit and tax credits made at the beginning of the pandemic which are due to expire in April 2021.
Doubling child benefit from its current rate would inject £14bn directly into the economy over the next 18 months, the report says, while raising the child element of Universal Credit by £20 a week per child would inject £11bn over the 18 months.
They also called on the government to urgently invest in childcare, to protect early years learning and enable parents to continue working.
IPPR and TUC added that the new family stimulus should be in addition to improvements to the government’s new Job Support Scheme, which starts on 1 November, as well as improvements to training schemes for workers who lose jobs and investment in job creation, and a wider boost to social security.
UK unemployment rate reached its highest level in more than three years, figures revealed earlier this month. It is expected to rise in November once the furlough scheme comes to an end - and doubling from its pre-COVID levels to 9.1% next year.
IPPR and the TUC revealed that it has already lost an estimated £228m (13% of its income) through parents withdrawing their children.
Carys Roberts, Executive Director of the IPPR, said: “Even with the Chancellor’s latest revisions to his job protection measures, his winter economy plan is missing a crucial piece of support.
Watch: What is universal basic income?
“We have one of the least generous social security systems of any developed country. The higher payments we’re calling for with the TUC today will mean fewer families forced to rely on foodbanks to feed their children or otherwise scrambling to keep themselves afloat as the pandemic continues.
“Not only will this family stimulus spare hundreds of thousands of children from the scarring effects of poverty over the next 18 months, but it will also mean an economic stimulus – helping to keep the economy going as we push through the pandemic, and preventing even more jobs being lost.”
It comes as Manchester United footballer Marcus Rashford has campaigned for free school meals.
Already-struggling cafes and restaurants across the country have promised to feed children during the school holidays on the back of the campaign after the government voted against extending free meal vouchers outside of term time
Roberts said: “Marcus Rashford’s campaign for free school meals has shone a light on the difficulties faced by so many families across the UK to put nutritious food on the table this winter.
“But it shouldn’t fall to a footballer and restaurants already struggling with a pandemic to patch up our broken safety net.”
Watch: What is the Job Support Scheme and how has it changed?