What do this week’s social security cuts mean for black and minority ethnic communities?

Posted on Tue 4 Apr 2017

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Cuts to social security that began in 2015 come into force this week. The everyday task of paying for housing and food will become more difficult for many people, families and communities.

Recent analysis from the Resolution Foundation sets out the broad impact across Britain (social security in Northern Ireland is run differently).   Their analysis suggests, that families who have their first child in the coming financial year will lose £545 due to changes in Universal Credit. Families with more than two children will lose around £2000 a year. These two changes alone will affect 410 000 families. Together with changes to tax benefitting the rich, and offsetting for advances from increasing the minimum wage and free childcare, the Resolution Foundation says the years 2015 – 2020 represent “the toughest period on record for low and middle income families”.

Black and minority ethnic people and communities are being particularly affected by welfare reform, according to our research. One of the key reasons is low pay.  Analysis suggests that 52 per cent of Black households and 47 per cent of Bangladeshi households earn less than £300 per week. This means social security payments are a greater part of the income for black and minority ethnic families on average.

The cuts to support for families with more than two children, and the benefit cap, are likely to hit black and minority ethnic families harder. This is both due to the average larger family size and the greater likelihood of living in urban areas with high housing costs, such as London.

Black and minority ethnic people are also more likely to experience barriers within the social security system. Relatively higher rates of poor literacy, IT literacy as well as language issues mean the process is not easy to navigate.  Worryingly, the payment of Universal Credit to the usually male ‘head of the household’ means women are less likely to keep control over social security payments.

Importantly, evidence suggests there are lifetime impacts too. Black and minority ethnic people are less likely to contribute to a pension – meaning higher rates of pensioner poverty.   One of the likely impacts of the current cuts will be that it will be even harder to save for retirement.

Unfortunately, health inequalities are also likely to grow. Poverty has a dramatic impact on health. Research from the Institute of Health Equity on previous recessions found increases in mental ill-health, suicide, domestic violence, heart disease, and infections resulting from the combined impact of social security cuts and an economic downturn.

The reality is that inequality costs. We will see the result of these cuts in social security in higher rates of poverty and ill-health. The impact on individuals, communities, and particularly families with children, will be devastating.