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Sensemaker: Got your back

Sensemaker: Got your back

What just happened

Long stories short

  • Tesla’s market value surpassed $1 trillion on news that Hertz ordered 100,000 of its electric vehicles, putting it in the company of Apple, Amazon and Facebook.
  • Sudanese soldiers reportedly killed 10 people after firing on protesters in Khartoum who were demanding the return of civilian rule.
  • Japan’s Princess Mako gave up her royal status to marry her commoner college boyfriend, a man she called “irreplaceable”.

Got your back

Tomorrow Rishi Sunak will announce his first real post-Covid budget, but he’s leaving few surprises about what’s in store. His policies have already been trailed across the media. The headlines: £5.9 billion to be spent on the NHS in England, a national minimum wage hike, and unfreezing public sector pay. But not everything adds up. 

On Saturday Sunak wrote in the Sun that the Treasury will “continue to do whatever it takes” and “continue to have your [families’] backs”. Yet earlier this month, Sunak ended a £20 weekly Universal Credit uplift that had been going to 4.4 million families. The Joseph Rowntree Foundation called it the biggest overnight cut to social security since the Second World War.

Plan for Jobs. The pandemic job support schemes set up by the chancellor (furlough, government-backed business loans and grants) have kept unemployment levels lower than predicted and seem to be keeping them low even now they’re being wound down.

But… research from conservative think tank the Legatum Institute has found the removal of the £20 uplift in UC – as well as the suspension of the minimum income floor – could still push 840,000 people (including 290,000 children) into poverty. 

Sunak announced a £500 million household support fund to help plug the gap, given to local authorities to distribute, but it’s a small fraction of the £6 billion a year he was spending on the uplift.

The Treasury and Department for Work and Pensions say the uplift was always intended to be temporary – and that the updated Plan for Jobs (an extension of apprenticeships, and the Kickstart and Restart employment schemes) is the solution.

“Un-Conservative”. Not everyone claiming UC can get back into work when a job comes up. Philippa Stroud, a Conservative peer who heads Legatum and advised Sir Iain Duncan Smith on introducing UC in 2013, is breaking constitutional precedent to table a bill in the Lords raising concerns about the uplift removal.

Baroness Stroud said that although there will be people who move back into work, there will also be 450,000 who could fall into poverty because they have disabilities – or children with disabilities. She told the Mirror the uplift removal for these vulnerable groups was “fundamentally un-Conservative”.

It’s a concern raised in a new report published today by youth homeless charity Centrepoint. Speaking to 200 young people with experience of care or homelessness who claim UC, the charity found:

  • Two-thirds said they had gone to bed hungry for lack of money, of whom a third said they did so routinely;
  • 65 per cent have fallen behind on rent or essential bills;
  • Only one in 10 feel benefit levels are enough for a decent quality of life.

“We can already see it’s a downward spiral from here if the government doesn’t do anything” to compensate for the end of the uplift, Morgan, who is 23 and relies on UC and the Disability Living Allowance to get by as his mental health leaves him unable to work, told Sensemaker.“We shouldn’t have to go through a pandemic to get the money that we need to actually survive.”

Back to work. Of course, there are people claiming UC who will benefit from Sunak’s plan and get back into work. But that doesn’t necessarily solve the problem.

Almost half the young people Centrepoint spoke to said they felt they had had to turn down a job or more hours due to the impact this would have on their benefits. That’s in part down to the taper rate, which is currently 63 per cent. For every £1 someone is paid above a work allowance, their benefit is reduced by 63p.

According to the report, someone under 25 in supported accommodation working 11 hours a week would be £16.57 worse off if they started working an extra hour per week, and only £17.46 better off a week than if they were not working at all. 

It’s not a simple calculation for a young person to make. The work and pensions secretary Thérèse Coffey told the BBC last month that for someone to earn back the £20 a week they lost they would need to work two extra hours. The reality is closer to earning £2.24 for an extra hour’s work on the living wage. 

There was high in-work poverty even before the pandemic. Working-age benefit increases were capped at 1 per cent a year between 2013 and 2015 and frozen between 2016 and 2020; inflation averaged 2.3 per cent a year over the whole period. Stephen Crabb, the Conservative MP and former work and pensions secretary, told parliament last month: “Anybody who thinks that we have generous benefits in this country, I’m afraid, is wrong.” 

£6 billion a year is a big outlay – or saving – in any budget. Sunak has nailed his colours to conventional Tory faith in fiscal discipline, and his supporters say keeping the UC uplift would have risked undermining work incentives. But it’s a defence many MPs don’t buy – and not just those across the bench. 

Belonging identity, society, beliefs, countries

Chappelle cancelled
​​Dave Chappelle, the American comedian whose Netflix show angered the transgender community, said he is being “cancelled”. In his show, The Closer, Chappelle said “gender is a fact” and that LGBT people are “too sensitive”. A small protest outside Netflix’s LA headquarters followed, as did online outrage and internal dissent from employees. Netflix apologised for the way the show, which remains available, was handled. Chappelle said he’s more than willing to speak to transgender people and activists at Netflix, but that “this has nothing to do with them”. He said it was about corporate interests and “what I can say and what I cannot say”. 

New things technology, science, engineering

New planet
Here’s a big new thing: astronomers may have discovered the first planet outside our galaxy. The potential planet is the size of Saturn and around 28 million light years away from the Milky Way. The body was seen by Nasa’s Chandra X-ray telescope, which detects dips in brightness from stars – which happens when a planet passes in front of the star and temporarily blocks its light. The “transit” method is the only technique scientists have to find worlds beyond our Sun. If further research supports this finding, we can expect to hear of more and more exoplanets.

The 100-year life health, education, living, public poliCY

Jabs for kids
Moderna said its Covid vaccine induced the desired immune responses in children aged 6 to 11 in a clinical trial. It will now submit the results to health authorities in the US, Europe, and countries where regulators are looking to expand their vaccination programmes to children. Experts say much of the recent spike in new infections in the UK is the product of schools re-opening; besides in many cases being unvaccinated, pupils don’t need to wear masks. While the risk of severe Covid is much lower in children than adults, children can be a vector of transmission.

Our planet environment, natural resources, geopolitics

Stern words
Prof Nicholas Stern, who wrote the landmark 2006 Stern review on the economics of the climate crisis, told the Guardian that economists still “grossly undervalue the lives of young people and future generations”. In his review, Stern found that most economists misunderstood the basic concept of “discounting”, the way in which the value of future assets are modelled compared with their present values. Consequently they underestimated the impact global warming will have over the coming decades, which Stern described as “effectively discrimination by date of birth”. And they’re still doing it. His remarks are a reminder that, apart from anything, the climate crisis is a generational conflict.

Wealth investment, fairness, prosperity

Facebook profit
Frances Haugen, the former Facebook product manager turned whistleblower, told British MPs that the social media giant needs stricter oversight in Europe. She said the company was fully aware of its harmful social effects but prioritised profits. “Until the incentives change,” Haugen has repeatedly said, “Facebook will not change.” The incentives are strong: yesterday, the same day Haugen appeared in parliament, Facebook announced its latest quarterly profits rose 17 per cent to $9.2 billion.

Thanks for reading, and do share this around.

Phoebe Davis

Paul Caruana Galizia

Produced by Phoebe Davis and edited by Xavier Greenwood.

Photographs Getty Images, Shutterstock