04 March 2011 - Naomi Hossain

As public sector cuts begin to bite, new research by IDS for the Joseph Rowntree Foundation shows that people living in poverty in the UK felt the adverse effects of the global recession in some unexpected ways. The report on the impact of the global economic downturn on poor communities in the UK, signals the need to rethink the welfare state to take better account of how globalisation is affecting work, the cost of living, and the wider experience of poverty in the UK.

The UK was hit harder than most countries by the global recession, but relatively little is known of how it has affected people on low incomes. Researchers at IDS and the Universities of Sussex and Manchester worked with community groups in Northern Ireland and the northeast of England to explore how people living in poverty had experienced the global recession and food and fuel price rises since 2008.

Working in Newhaven, in East Sussex, Oldham in Lancashire, and the rural community of Kildress in Co. Tyrone in Northern Ireland, the research found that low income communities were less likely to have benefited from the boom that came before the bust. Even then, many businesses were hit by the downturn, with job losses and shorter and more ‘flexible' working hours resulting for many.

Commodity price rises affect the poor wherever they are in the world

A striking finding was how global commodity price rises were affecting everyday life. There were surprisingly close parallels with the ways in which people in developing countries had experienced the global economic shocks since 2008. Some families were struggling to eat well, spending more money, time and effort on providing food than they had a few years before.

One woman in Newhaven explained that her inability to afford fruit and other nutritious food was affecting the health of her infant daughter: "She's always a bit run-down ... nothing too serious but always a constant cold or cough, or things like that. And I'd say that was her diet."

The social support of families, neighbours and community networks and groups was reported to be invaluable in helping cope with the effects of the recession. But in all three areas, the numbers of people on out-of-work benefits and other welfare state support services also increased sharply.

The research is one of few sources of evidence of what globalisation means for poverty in the UK. It indicates clearly that global economic volatility is not only a concern for poverty in the developing world, but also matters to poverty in developed countries. For people living in poverty in these communities, the welfare state was relatively unresponsive to the risks they were facing from the global economy.

The report highlights the need for a redesigned welfare state that is more responsive to the impact of commodity price volatility on purchasing power, the increasing instability and 'flexibility' of low paid work, and the social costs of coping with the recession and rising living costs.

Naomi Hossain is a Research Fellow with the Participation, Power and Social Change Research Team

Image credit: Karen Robinson / Panos