Poverty gap could be ‘magnified’ by coronavirus crisis

Edinburgh has seen large rise in welfare applications since lockdown restrictions were brought into force.

Edinburgh: Risk of widening inequality. SNS
Edinburgh: Risk of widening inequality.

Covid-19 risks widening the poverty gap between the richest and poorest people in Edinburgh, according to a new report.

The Edinburgh Poverty Commission (EPC) said the coronavirus pandemic has threatened the livelihood of many workers and one member predicted a 13,000 rise in unemployment.

According to its report, there are an estimated 80,000 people living in poverty in Edinburgh and lockdown threatens to increase those numbers.

Dr Jim McCormick, EPC chairman, said: “Edinburgh is the most unequal part of Scotland and the crisis has magnified a lot of that.

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“However, it is not just on the Scottish and UK Governments and city council, it is absolutely on employers and housing suppliers to build something better for the city than we had before.”

The commission heard from more than 1,000 people, some of them now out of work and claiming benefits for the first time.

The wealth divide in Edinburgh was already stark, with data showing New Town residents can expect to live up to 21 years longer than those in Niddrie.

Scottish Welfare Fund applications have been more than three times higher than average in Edinburgh since lockdown began, with 1,200 applications weekly.

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Applications for Universal Credit in the city have also increased eight times more than average.

Some respondents said instead of furloughing workers through the UK Government’s job retention scheme, employers have assumed it is easier to lay people off and rehire them when business picks back up.

Zoe Ferguson, report co-author, said: “For some businesses they just don’t have the resilience to cope with short-term cash flow issues and they’ll go under before support from the Government will kick in.

“Sadly, we’ve also heard of lots of cases where employers are feeling that the easier option is just to lay people off and re-recruit.

“This is impacting mostly low-paid workers. People have said they feel disposable.”

Nearly half of all respondents who worked in sectors that have now been shut down were on zero-hour contracts.

Community Renewal, which runs one of the city’s employability programmes, has had referrals rise from 20-30 per month to 120 in the first month since the lockdown began.

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Mrs Ferguson said: “What we’ve been hearing across the city is fear and a real trauma – some people are experiencing unemployment for the first time.

“A lot of people who have never claimed benefits have no idea where to go for help.

“We’ve heard just how terrifying that experience is for them.”

She added: “We’re looking at probably around 13,000 extra unemployed around on top of what we would expect.”

Councillor Cammy Day, EPC vice-chairman, said the city is “seeing a huge increase in the number of people who are new to poverty or newly unemployed” since lockdown began.

He warned of a likely second wave of unemployment once the job retention scheme ends.

“One thing a lot of the commissioners have raised is about a decent living wage,” Mr Day said.

“When people go back into work, can we have a new approach which says Edinburgh should become the first capital city that has a living wage for everybody?”

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