The Legatum Institute, led by Tory peer and former government adviser Philippa Stroud, estimated that even if the energy price cap was kept at the summer rate of £1,971, a further 1.3 million people would fall below its threshold of relative poverty compared to pre-pandemic. percentages. But Legatum said government intervention to freeze energy prices – expected this week – was necessary to prevent what would otherwise be an even more drastic “once-in-a-generation” poverty outbreak. The Social Measures Committee’s measure of poverty, introduced in 2018 by a cross-party expert group chaired by Lady Stroud, goes beyond a simple measure of relative income, also taking into account basic living costs such as housing, childcare and the additional disability cost. The government initially indicated it would adopt the measure as an official measure, but later abandoned its plans. The institute estimated that if ministers fail to tackle gas and electricity prices and the energy price cap rises to £3,549 in October and again in January to £5,300, then UK poverty figures will rise to 16.65 million, compared to the 2019-20 figure of 13.9 million. The analysis said that as well as trying to cushion the impact on consumers from rising energy prices, ministers should also increase universal credit to help the worst off. With living standards collapsing, many people on low incomes would still face rising costs in other areas such as food, clothing, rent and transport, partly because energy prices were already high and partly as a result of the government’s decision to award Inflation benefits rises in April, when benefits rose by 3.1%, even though inflation was then at 9%. “Even assuming energy prices are set at summer 2022 levels, there will still be 15.2 million people in poverty during 2022-23. This would represent the largest number of people in poverty since the Social Measures Committee began measuring poverty in 2000-01 and an increase of 1.3 million compared to pre-pandemic levels,” the analysis said. Stroud said: “The Government should never have been backed into a corner where they are forced to pump in billions to freeze energy prices. However, our figures show that drastic action is needed to stop more than 2.5 million more people falling into poverty.” Archie Bland and Nimo Omer take you to the top stories and what they mean, free every weekday morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. He added: “It’s good to see that Liz Truss is taking this seriously and looking at freezing energy prices. This will shield nearly a million and a half from poverty this winter. But if Liz Truss wants to stabilize poverty at pre-pandemic levels, she will need to go further and introduce a 10% upgrade to universal credit, as existing inflation will continue to hit the poorest hard.” Earlier this year Stroud, who was a special adviser to former work and pensions secretary Iain Duncan Smith for the first half of the last decade, set up an independent cross-party poverty strategy commission and criticized the government for a lack of will and ambition to tackle growing hardship and impoverishment. An open letter signed by committee members, including Tory MP and former welfare secretary Stephen Crabb, says UK poverty rates have remained stubbornly above 20% for the past decade and the number of people in deep poverty has increased – a symptom of “an approach that has used poverty as a political football”.
