UK COVID measures stop income hit for most, but some miss out -IFS

·2-min read
The spread of the coronavirus disease (COVID-19), in London

By William Schomberg

LONDON (Reuters) - Most Britons have seen "astonishing" stability in jobs and earnings during the pandemic, due to emergency state support, but some self-employed people, low-income families and people from ethnic minorities have suffered, a think-tank said.

The Institute for Fiscal Studies said joblessness, earnings growth, arrears on household bill and food bank use in early 2021 were similar to pre-coronavirus levels.

"Given that the pandemic has seen the biggest ever recorded drop in national income, the overall picture on deprivation and the labour market at the start of this year looks surprisingly positive," Tom Waters, an economist at the IFS, said.

But the situation could change as the government's furlough wage-subsidy is phased out between now and the end of September, he said.

Self-employed workers who lost all work at the start of the pandemic saw the biggest deterioration in their personal finances. Some 15% of people in that category were behind on their bills in early 2021, up from just 2% before the pandemic.

More than a third of self-employed workers were ineligible for the government's main scheme to help them, the IFS said.

Some 15% of ethnic minority households were also behind on their bills, up from 12% before the pandemic. Pakistani and Bangladeshi households were most likely to find themselves without any work, as before the pandemic they were more likely to rely on earnings from just one adult.

The Joseph Rowntree Foundation, an anti-poverty campaign group which partly funded the research, welcomed the success of the government's measures to soften the hit from COVID-19 lockdowns imposed on swathes of the economy.

"But even before the pandemic, far too many people were locked in poverty and destitution," Rebecca McDonald, a JRF economist, said.

"We cannot build back better by choosing to return to a status quo in which rising reliance on food banks was the norm."

She called on the government to drop its plan to end a weekly 20-pound ($27.58) boost to Universal Credit welfare payments.

($1 = 0.7252 pounds)

(Writing by William Schomberg, editing by David Milliken)

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