How will Brexit impact Britain's most disadvantaged communities?
An anti-Brexit protester demonstrates outside the Houses of Parliament in London, Britain, September 4, 2019 [File: Henry Nicholls/Reuters]
London, United Kingdom – Lucas Wilson sits at the junction of Station Approach and Hoe Street in Walthamstow, East London, wearing a rugged sports cap.
He is 45, but his heavily-lined face and tired eyes say otherwise.
His marriage fell apart at the same time his mechanical business took off.
After assaulting his wife’s new partner, he served three months in Thameside prison in southeast London.
Upon his release, he said, his former wife banned him from contacting the children.
“I started drinking. I drank myself into a drunken stupor and drank everything away, and I lost everything.”
Now a teetotaller, he is desperate to return to work, but it is not easy.
“Without a permanent address, it’s hard to secure job seekers allowance. No employer will offer you a job if you don’t have an address, Then you need the job to get the money for accommodation. It’s a catch 22 situation.”
Wilson, who is on an indefinite waiting list for a council house, is among the 320,000 people sleeping rough in the United Kingdom. At the moment he survives by pitching a tent in one of London’s graveyards or finding a hostel, but hostel places are hard to come by.
To afford a room in a London hostel he has to raise between 14 pounds ($17) and 20 pounds by begging.
I don’t bother with Brexit, it does not matter who is in. They are all out for power and themselves.
Lucas Wilson, homeless Briton
“I’m lucky if I can manage two to three times a week, so I can get a restful night and a shower. Their answer to homelessness is private accommodation.”
Government funding for building affordable social rent homes fell from 4.28 billion pounds ($5.3bn) in 2010 to just 1.27 billion pounds ($1.7bn) in 2018, according to the National Housing Federation (NHF).
A welfare reform bill once hailed as “historic” by former Prime Minister David Cameron with 18 billion pounds ($22bn) worth of welfare cuts since 2010 has linked Tory austerity to “economic murder”.
Against the backdrop of Britain’s departure from the European Union, with MPs threatening to block a no-deal Brexit, 100 heads of charities and businesses across the UK wrote to Prime Minister Boris Johnson, urging him to replace the European Social Fund with the UK Shared Prosperity Fund (UKSPF). Their objective would be to reduce the effect of the shock for the disadvantaged groups after Britain leaves the EU.
Meanwhile, Will Jeffwitz, policy leader of the National Housing Federation (NHF), one of the signatories to the letter, said decades of underfunding has created a severe shortage of social housing in England, particularly in the last 10 years. “Housing associations have historically relied on the European Social Fund to provide vital programmes and services to help people into employment.”
Building rates for social rent homes have dropped from 35,784 at its peak in 2011, to just 5,385 last year.
Research by the NHF estimates that 145,000 social homes need to be built each year for the next 10 years to meet demand and stem increasing levels of homelessness, poverty, and overcrowding.
“To do this we need 12.8 billion pounds in funding each year from the government,” said Jeffwitz.
Lucas Wilson is not surprised by these numbers.
“I’m on the list for every homeless and housing charity. I fill in the forms, give all my details.
“Week in week out I get in touch with every single organisation I am signed up with, just to keep my name fresh in the hope that someone will say, ‘We have got something for you’. Until that happens, there’s no moving forward.”
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Loss of European funds
Lynsey Sweeney, spokeswoman for Give Us A Chance (GUAC), a charity that supports people returning to work, said the failure to replace the European Social Fund puts at risk existing expertise, infrastructure and frontline organisations who are delivering employment. Disadvantaged jobseekers will be hit hardest.
UK employment is up but three years after the EU membership referendum, productivity has reduced between two to five percent, according to a Bank of England research paper.
The Chartered Institute for Personnel Development (CIPD) says productivity is the crucial engine that drives the economy forward. Efficiently run businesses pay more and drive better living standards.
The absence of a Brexit deal, Jeffwitz warns, will intensify an already severe skills shortage and weak access to building materials, making it even harder to construct new homes.
Even in a relatively stable economic climate – before a no-deal Brexit seemed likely – one in three working-age social housing tenants were struggling to pay their rent.
Before Britain voted to leave the EU, 3.57 million pounds ($4.4m) of funding was allocated to the UK for alleviating child poverty, food poverty and homelessness between 2014 and 2020 by the Fund for European Aid to the Most Deprived (FEAD).
Some 930,000 pounds ($1.15m) of this was forfeited due to failed initiatives and missed deadlines.
The FEAD was designed to tackle poverty under its “Europe 2020 strategy”, but the UK government failed to distribute the funds and blamed EU bureaucracy for the failure of FEAD.
“We still think we are one of the superpowers. For them to have given money back, money that could have helped a lot of people, is a serious disregard for British people,” said Wilson.
As Britain prepares for Brexit, 14 million people are locked in poverty according to the Joseph Rowntree Trust.
Areas exposed to changes in trade with the EU could be worst hit with the loss of regional funding.
Almost a third of children in the UK, four million, live in poverty – in the average classroom, about nine are from severely financially disadvantaged families. The Children’s Society, a UK based charity, predicts that the number will rise to five million by 2020.
Jonathan Portes, economics professor at Kings College London, is wary of drawing any strong conclusions.
“Whether the poorest are worse hurt will, therefore, depend primarily on how the government responds. If it responds by increasing benefits and providing targeted support, the poor will be cushioned. If it responds by corporate tax cuts and income tax cuts for top earners while allowing public services to deteriorate the opposite will be the case.”
Sterling’s worst decline was in June-July 2019, and The National Institute for Economic and Social Research’s (NIESR) latest forecasts said the collapse in the pound, even in the event of an “orderly” no-deal exit from the EU, would slow economic growth and increase inflation by four percent.
These factors will in turn trigger a drop in real wages, lower employment and lower tax revenues.
The future looks bleak for Lucas Wilson.
“I never in my wildest dreams thought I’d end up where I am, homeless on the street with the type of upbringing and education I have received.
“I don’t bother with Brexit, it does not matter who is in. They are all out for power and themselves. For me to be on the street and to be unable to access help, that is outrageous.”