IFS calls for a fairer UK after Covid brings greater inequality

A leading thinktank has called for action to make Britain a fairer country after its research showed that the Covid-19 pandemic had led to greater inequality.

The Institute for Fiscal Studies said the most vulnerable – those on lower incomes, the young, the least-educated and people from black, Asian and minority ethnic backgrounds – had been hit hardest by the crisis.

Covid-19 has “cruelly exposed huge variations in how easily we are able to weather threats to livelihoods, to educational progress, to physical and mental health”, the IFS said. “These disparities have been closely correlated with pre-existing inequalities between groups according to their education, income, location and ethnicity – in ways that are often hard to disentangle, but depressingly familiar.”

Eighteen months ago, the IFS launched a five-year study of inequality headed by the economics Nobel laureate Sir Angus Deaton. In a new year update, the thinktank said the pandemic had thrown up challenges that could not be ducked.

The report noted that:

  • Mortality rates in the most deprived communities were about twice as high as those in the least deprived. BAME groups were more likely to die than the white majority, in part reflecting their occupations.

  • The better-paid and more highly educated had found it easier to cope financially with the crisis. Among graduates, there had been a 7% fall in the number doing any paid work; among non-graduates it was 17%.

  • Children from poorer families found it harder to do schoolwork during lockdown, received less online teaching, and have been more likely to miss school since September.

  • Elderly people have suffered high mortality rates from Covid-19, but the young have felt the economic consequences, with the under-25s more than twice as likely as older workers to have lost their jobs.

The IFS said: “We need to do more to ensure greater economic opportunities for minority ethnic groups, and ensure that they are not consigned to low-paid and self-employed occupations. They would benefit disproportionately from policies that, for example, provided greater security for the self-employed and others in insecure work, improved pay and conditions in health and social care, and supported progress through the labour market.”

The report also said that without targeted support for children who had fallen behind as a result of the crisis, the “huge educational inequalities that existed” before the pandemic were almost certain to get worse.

The IFS said the risk of permanent scarring to the younger generation would be reduced if help was provided to school leavers and graduates looking for work and training. Asset prices had been bolstered by Bank of England action to support the economy, making it important for the Treasury to support the young and those without wealth.

Deaton said: “As the vaccines should, at some point this year, take us into a world largely free of the pandemic, it is imperative to think about policies that will be needed to repair the damage and that focus on those who have suffered the most. We need to build a country in which everyone feels that they belong.”

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