In the 2019 general election, Boris Johnson promised to ‘level up every part of the country’ and make sure to ‘help with cost of living pressures’. However, our research at the New Economics Foundation (NEF) shows the only thing that’s been levelled up since then is the gap between the rich and poor. With no hopes of the social security system responding to pandemic-induced supply-side inflation, low-income people in Britain have been left with inadequate support—while the already well-off have seen their incomes grow.
Looking at changes in income across the UK, we found that since 2019, the poorer half of the UK has seen a real-terms loss of disposable income of £110 per year. The other half of the UK gained £690—and the richest five percent has gained £3,300.
The 2019 election result showed that many voters had new-placed confidence in Johnson’s party, with a number of Labour strongholds in the North and the Midlands switching to the Conservatives after the party promised to level up their left behind towns. Those promises make our findings on the regional changes in disposable income all the more stark: people in the South East and London saw their disposable incomes rise by over twenty times that of the North East. In general, the North and the Midlands saw average incomes rise by much less than the South, and for every £1 families in the North and the Midlands gained, the rest of England gained £4.25.
Breaking these regional results down further by those who are in the top and bottom half of incomes nationally, we again see that the worst losses for people on lower incomes have been concentrated in the North and the Midlands. In fact, people on the lower end of income distribution who live in the East of England or London have become slightly better off. These results counter what we’d expect to see if ‘levelling up’ was actually working. Instead, already rich regions are becoming better off while poorer regions are being left behind.
The pandemic is clearly part of the reason people have become worse off since 2019. But our results show that the impact of the pandemic has not been felt equally. We know people on lower incomes have been doubly exposed to the pandemic in terms of health and economic effects. Hospitality was already made up of some of the country’s lowest paid workers, and it was among the industries that suffered the most from the pandemic, resulting in higher cases of unemployment and larger losses of income.
People on lower incomes also had a greater proximity to the virus as a result of not having the option to work at home, working in jobs with higher exposure to the virus in general, and having to make excruciating decisions between their health and their livelihoods due to inadequate sick pay and a weak social security system.
Importantly, the latter points aren’t inevitable. The UK has some of the lowest benefits compared to average income in the OECD, and our sick pay is nearly the worst in Europe. Clearly, other countries find a way to do things better. This hasn’t just exaggerated economic effects—it’s led to disproportionate deaths among poorer people too.
The effects of the pandemic on low-income families further mark the government’s decision to withdraw support like the £20 Universal Credit uplift back in October. But even when it existed, the uplift wasn’t enough. As the BBC’s coverage of our research showed, families have been skipping meals, relying on foodbanks, working multiple jobs, and coming up with ‘side hustles’ just to get by for quite some time now. Poor people in Britain are resilient, but they shouldn’t have to be—and a more generous social security system could remove a lot of stress and anxiety for hundreds of thousands of families, including the 300,000 pushed into poverty since 2019.
As inflation continues at its highest level in almost a decade, the call for a more effective social security system becomes more urgent. With rising prices, difficult decisions over how to afford the basics become harder and more painful. Our research showed a striking difference between families that had at least one person working and those that didn’t, with those out of work much worse off, and we saw that single parents are the worse-off family type overall.
For these families, their loss of income in real terms is attributable directly to failing government policy. This is because our social security isn’t based on the reality of people’s needs, but on a legacy of austerity that’s hollowed-out our benefit system, and arbitrary caps on benefit entitlement created by people with no experience of what it’s like to live on a low income.
At NEF, we want to fix this problem, and that’s why we’re campaigning for a living income: a social security system that responds to the cost of living and gives people a good quality of life. By boosting poorer people’s incomes, the areas they live in will benefit. If Boris Johnson actually wants to level up every part of the country, that’s where he should start.