More than 250,000 households will “slide into destitution” next year, taking the total number in extreme poverty to around 1.2 million, stated National Institute for Economic & Social Research (NIESR), calling for urgent £25-a-week uplift and £250 one-off payment to cushion the poorest from inflation.
More than 1.5m households will see the rise in food and energy bills outstrip their disposable income, forcing them to rely on savings or extra borrowing to make up the shortfall, said the thinktank, which blamed welfare spending cuts since the Brexit vote in 2016 for leaving millions of families in a vulnerable financial position.
In its recommendations, NIESR said that the government must raise universal credit payments by £25 a week immediately while handing the 11.3m lowest-income households a one-off cash payment of £250.
NIESR said the main subsidy for fuel – a 5p cut in fuel duty – was badly targeted and would mainly benefit better-off drivers.
“It is quite clear that fiscal policy could be used to smooth the income shock,” The Guardian quoted NIESR boss Jagjit Chadha as saying.
“Time and again we have been told that there is little room for maneuver when the weather turns unpleasant,” he said, when the government “had a £20bn borrowing capacity under its own fiscal rules that could be used to support poorer families”.
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