Slough, Hull and Blackpool likely to be hardest hit by benefit cuts and cost of living increases.
A perfect storm is brewing for poorer households. The £20 Universal Credit uplift and of the furlough scheme both end in the next seven days impacting money coming in, while gas and electricity shortages, its knock-on impact on food and drink and the current petrol crisis are pushing up outgoings. While lower income households across the country will be affected, which cities and large towns are most exposed?
Looking at the geography of universal credit claimants and likely patterns of saving across the country since the pandemic began gives a strong indication. York, Exeter and Cambridge are likely to be least affected (see Figure 1). Slough, Hull and Blackpool are likely to be worst affected – their residents are least likely to have been able to save money during the pandemic (through working at home, for example), and they have the highest shares of universal credit claimants.
Figure 1: The places most likely to be affected by the cut in universal credit are also the places that are least likely to have saved during the pandemic
Source: Beauclair; ONS, Claimant count March 2020 and January 2021; ONS, Population estimates 2019; The Registry Trust, County Court Judgements data for 2019 and 2020; ONS, Income estimates for small areas, England and Wales; DWP, Stat-Xplore
Note: Bubble sizes represent the furlough rate
A further challenge for Slough, along with the other airport towns of Luton and Crawley, compared to Hull and Blackpool is their much higher furlough rates. Despite having the highest share of people on the claimant count going into the pandemic, Hull has been one of the cities least likely to use the furlough scheme since its introduction. At the very least this means that while it will be disproportionally hit by the £20 reduction in Universal Credit, for most people this won’t be compounded by the end of the furlough scheme. This is not the case in the airport towns though – it’s difficult to see how there won’t be a jump in unemployment in these places in the next month.
The current squeeze in living standards will have an impact on households across the country. But it’ll have the greatest squeeze in Slough, Hull and Blackpool – some of the places that have already been worst affected by the pandemic.
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