Families falling out of work during the coronavirus crisis will get £1,600 less on average in benefits than they would have done without a decade of austerity imposed by the Conservatives.
Even after taking account of emergency additions to the welfare safety net launched as the virus spread to Britain earlier this year, the Institute for Fiscal Studies (IFS) said benefits for out-of-work households were worth 10% less than in 2011.
A decade on from George Osborne’s first austerity budget in June 2010, the analysis from Britain’s leading tax and spending thinktank showed the impact was worse for families with children. For an average out-of-work household with children, the shortfall jumps to £2,900 a year or 12%, less than was available in 2011 before the cuts kicked in.
Without the temporary changes announced by Rishi Sunak in March to raise the value of universal credit and other benefits to soften the blow delivered by Covid-19, households would have been 15% worse off, and families with children 16% worse off, the IFS said. The changes are due to last for 12 months.
Unemployment is expected to more than double this summer to levels unseen since the 1980s, as the coronavirus crisis and lockdown controls used to contain the spread of the disease trigger the deepest recession since records began.
Despite efforts to gradually reopen the economy in recent weeks, the number of people out of work and claiming work-related benefits has soared by 126% to 2.8 million since the start of lockdown.
Highlighting the scale of the Tories’ austerity drive and the stuttering recovery from the 2008 financial crisis, the IFS said cuts to working-age benefits and tax credits meant low-income households in particular had experienced stalling improvements in living standards.