Poverty and hunger costs the UK economy £75.6 billion a year, landmark report finds

The fact that people are facing hunger and hardship cost the UK economy, public finances and public services at least £75.6 billion in 2022/23, according to a new report from the Trussell Trust.

Hunger: uncivil and economically backwards

The charity broke down the figure. £38.2 billion is from the loss of productivity and employment, most prominently because people undergoing hunger and hardship are ‘scarred’ by the experience, whereby it’s more difficult to sustain a job.

In turn, that loss of employment leads to lower tax revenues and higher welfare payments, costing £23.7 billion.

Hunger and hardship further has an impact on public services, at a cost of £13.7 billion, with about half of that coming from increased healthcare costs. The Labour government should particularly listen here given their NHS plan is centred on ‘prevention’. Another portion of this figure comes from increased education spending and childcare spending. And £3 billion of this sum comes from increased spending on homelessness services.

The report points out that a “widening gap between the rich and poor is creating divisions and tensions between people at a community level”. Indeed, Oxfam has found that 1% of the country has more money than 70%. Polling from the Fairness Foundation identified that 63% of Britons believe the super rich have too much power over politics.

Solutions from Trussell

Trussell offers p9 recommendations to remedy the impact and cost of hunger and hardship. One is the ‘Essentials Guarantee’, which a number of charities have been campaigning for. This would mean that no one in the country goes without the essentials they need to survive. It would bring 2.2 million people out of hunger and hardship by 2026/27 and drive £17.6 billion in economic benefits. It makes sense: if people receive what they need to live they will automatically spend that in the economy, driving growth.

Another recommendation is scrapping the two child benefit cap. This would boost the economy by around £3.1 billion and lift 470,000 children out of hunger and hardship by 2026/27.

The scale of the issue

The Trussell report found that 9.3 million people, including 3 million children, faced hunger and hardship in 2022/23. Corresponding with an increase in inequality, 46% more children now experience hunger and hardship than a decade ago.

Money equates to real material resources in the economy and if rich people’s portion of the wealth keeps growing, it’s at the expense of the poorest. Last year, UK billionaires saw their wealth increase by £35 million every single day. Meanwhile, Trussell estimates that an additional 425,000 people will face hunger and hardship by 2026/2027.

The charity identified the rate of different groups that are facing hunger and hardship:

• 31% of families with three or more children.
• 32% of single parent families.
• 70% of people facing the issue are renters.
• People living in a disabled family are much more likely to experience hunger and hardship (17% compared to 11% for non-disabled people).
• The issue is dramatically worse for minority ethnic groups, at up to 28% compared to 11% for white families.

It’s clear that Labour’s planned welfare cuts to disabled people’s support is only going to make the issue significantly worse. As well as the human cost, there is a domino effect on the economy, delivering negative outcomes for us all.

Featured image via the Canary