London Challenge Poverty Week

By Emma McClelland - 11 October 2021

Since 2018, London Challenge Poverty Week has taken place annually during the week around the UN Day for the Eradication of Poverty on 17 October. It aims to increase the visibility of the reality of poverty in London and show what's being done to tackle it. This year, many people are facing harsher situations than ever, with the £20 cut to Universal Credit taking us back to one of the stingiest welfare systems in the developed world.

As a charity focused on ending precarious work (and one that advises a significant number of EU nationals in the UK) we see poverty at the intersection between migration status and informal working and living arrangements. The government's close-fisted approach to welfare serves only to worsen the situation. Poverty is an emergency, and the government needs to take action now.

In-work poverty

Precarious work, that is to say work that's poorly paid, unprotected and insecure (encompassing zero-hours contracts, informal arrangements where workers have no contract or access to basic employment rights, and exploitative 'black market' situations), is a huge contributor to in-work poverty. 

We have found that precarious work predominantly affects women and migrant workers. Migrants, though highly qualified, are less likely to be employed in positions commensurate with their training. As many as 38% of our beneficiaries have higher education qualifications, but only a small fraction work in managerial positions.

Informal living and Universal Credit

Trust for London's Poverty Profile shows that 27% of Londoners are living in poverty after housing costs. Living costs in London are some of the most expensive in the world. It is no surprise that as many as half of our beneficiaries live in informally sublet accommodation, without the protections of a rental agreement.

At the Work Rights Centre, we often advise people who are excluded from the housing element of welfare simply because they lack the ability to evidence housing costs. Unable to afford contract-bound accommodation, they live in house shares sublet informally, where rents are paid in cash and negotiated on a handshake. 

Without the housing element of UC, a single adult applicant is left with a paltry £409 a month. This is meant to cover food, bills, and rent for a month. It is simply unlivable. 

Migration status and poverty

When Freedom of Movement ended in the UK, EU nationals had to apply for status under the EU Settlement Scheme (EUSS), which granted them one of two types of status: pre-settled or settled. For those who can evidence less than five years' residency in the UK, the most common outcome is pre-settled status.

People with pre-settled status are not given the same rights to apply for welfare or  homelessness assistance. Instead, they have additional conditions to meet before they can be considered eligible. 

One of our beneficiaries became homeless after she lost her temporary job as a cleaner and found herself sleeping in a friend's car. She applied to the council for support, but was required to provide evidence that she was either a worker or self-employed. When you don’t have a contract (in 2020, over a third of our beneficiaries did not have written confirmation of payment) this is near impossible. The woman in question is receiving help from several organisations, as well as our own, and using food vouchers to get by while she tries to find formal employment. But fixing poverty should not be left to a handful of small charities. 

Stuck in the EUSS backlog

It would also be remiss to not acknowledge the thousands of EU nationals who have applied for status under the EUSS but have not yet received an outcome. While employers have been advised that they can check applicants' right to work via the 'Employer Checking Service', the reality is that many of them don't understand - or simply don't want to use - this cumbersome system, which, as we argued earlier, needs fixing. As such, EU nationals are being put at a disadvantage when it comes to employment opportunities, pushing many of them into financial difficulties. 

The government must act

We would like to see the government take meaningful steps to end in-work poverty. First and foremost, they must acknowledge that welfare is not the antithesis of employment. It is a necessary safety net to keep people from financial crises, and in its current state it is not fit for purpose. 

We are also calling for the government to communicate more clearly with employers about the approach to check people's right to work if their EUSS application is pending. They should not be having job offers withdrawn or pay withheld but this is exactly what we are hearing from many of our beneficiaries. 

And finally, we need to address low-quality, precarious employment. From a government perspective, this means putting more robust employment rights measures in place and enshrining them in law. Until these steps are taken, poverty in the Capital is unlikely to see any improvement. 

Please help us to continue advising UK and EU nationals on their employment rights. Our multilingual team helps people escape precarious work and improve their professional mobility but we rely on donations to enable us to do so. You can make a donation here

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