Opposition parties have warned that whoever forms the next Welsh Government will have to urgently grasp the scale of the impact of Covid on household finances across Wales.
Data gathered by YouGov on behalf of the Bevan Foundation showed that the Covid 19 pandemic is deepening existing inequality in Wales.
Nearly a quarter of Welsh households, 328,000 households, have seen their incomes fall since the start of the pandemic income due to a mixture of business shutdowns, furlough pay and redundancies, the report says.
At the same time households have seen a number of key living costs increase including 41% seeing an increase in the cost of heating, electric and/ or water and 38% seeing an increase in the cost of food.
The Bevan foundation warned that there was a “clear need to take significant interventions to assist people from all sections of Welsh society” when the peak of the pandemic is over.
Both the Liberal Democrats and Plaid Cymru said that the repot highlighted the need for the next Welsh Government to take radical action o get to grips with the issue.
Welsh Liberal Democrat leader Jane Dodds said it showed the “real damage done to our economy” and that “Covid isn’t just a health crisis, it’s effecting every aspect of our existence”.
“It should be a stark reminder that many people have lost a significant amount of income over the last twelve months and that when shops and restaurants do eventually reopen, our economy won’t magically return to normal,” she said.
“The Welsh Liberal Democrats are calling for a cross party economy recovery council to be established, made up of representatives of all major political parties, to work alongside business leaders and academics in order to discuss and a agree a sustainable and effective way forward.
“This report needs to act as a wakeup call to whoever forms the next Welsh Government and they need to ensure that their plans are bold and radical and that our recovery from Covid is put first.”
Plaid Cymru meanwhile warned that an “ambitious approach” will be required for post-Covid recovery.
They noted that the report suggests that almost a quarter of Welsh households have seen a fall in their income, whilst more than forty percent have seen an increase in heating and water bills.
Plaid Cymru’s Shadow Minister for the Economy, Helen Mary Jones MS said the Welsh Government must “urgently intervene” and said “bigger steps” would be needed to mitigate the long term financial impact of Covid.
Ms Jones drew attention to Plaid Cymru’s ambitious Covid recovery plan which includes the creation of nearly 60,000 new jobs, describing the need for big ideas to “eradicate the vast inequalities in Wales”.
“This is a stark reminder that we cannot and will not just go back to how things were,” she said. “The future for people in this country’s poorest communities has to change.
“Household finances across Wales have been hit hard by the pandemic, and the end of the furlough scheme will add to current pressures. With a drop of household incomes and a rise in the costs of living, the Welsh Government must urgently intervene in offering short and medium-term support for those struggling, taking bigger steps to mitigate the financial impact of Covid for the longer term.
“A government in Wales has to be ambitious in moving forward – in recovering from the pandemic and addressing the needs of the most in need. Plaid Cymru have ambitions to extend free school meals to all children and have a plan for an economic recovery from the pandemic which would create almost 60,000 new jobs.
“We have reached a point in which big ideas and rapid action is needed in order to eradicate the vast inequalities in Wales, many of which are apparent in the Bevan Foundation’s report.”
The Bevan Foundation’s report showed that across Wales 14% of Welsh households have been forced to cut back on their heating electricity, and/ or water.
This rises 29% of lone parent households, 28% of social renters, 24% of households that include a disabled person and 20% of private renters. A similar picture emerges when looking at food for adults.
Whilst 15% of households have cut back on food for adults, the figure stands at 42% for lone parent household, 24% for private and social renters and 22% for households that include a disabled person.
Dr Steffan Evans of the Bevan Foundation said: “It is extremally concerning to see that so many households in Wales have had to cut back on essential items. Everyone in Wales should be able to live in a warm home and have enough to eat.
“The fact that it is the households that were already at the greatest risk of living in poverty that have been the most likely to have had to cut back demonstrates the devastating impact of inequality.”
The Bevan Foundation’s findings raises real concerns that the impact of the pandemic on inequality could be long term. Over 120,000 households (9%) have fallen behind on a bill since March 2020 whilst 200,000 (15%) have borrowed money. Some groups have been at a far greater risk of falling into debt, however.
Nearly three in 10 lone parent households have fallen behind on at least one bill since March 2020, with the same being true of 22% of households that include a disabled person, 20% of private renters and 19% of social renters. A staggering 4 in 10 lone parent households have borrowed money over the same period, with the same being true for 28% of renters, and nearly a quarter of couple households with children, and 25 to 49 year olds.
Steffan Evans added: “Disabled people, lone parents and renters were already amongst the groups that were at greatest risk of living in poverty before the outbreak of the Covid 19. The fact that we are seeing a higher proportion of such households falling behind on bills or borrowing money than the general population raises grave concerns that any progress that has been made in reducing inequality over recent years has been wiped out and been put into reverse by the pandemic.”
The Bevan Foundation said that the data makes a clear case for the Welsh Government to target support and intervention at households that were already at a greater risk of living in poverty as Wales seeks to recover from Covid 19.
Dr Steffan Evans added: “There is a clear need to take significant interventions to assist people from all sections of Welsh society once attention turns to rebuilding after the pandemic, but there is a clear argument for targeting greater resources at providing support and opportunities to people who were already at greater risk of living in poverty long before the pandemic struck.
“If action is not taken to provide additional support to disabled people, renters, lone parents and people from BAME groups there is a risk that any economic recovery will embed the worsening inequality that has been caused by the pandemic.”