Press Release: CPP's levelling up outlook finds lack of intervention to curb cost of living crisis will set levelling up back years

CPP’s cost of living vulnerability index measures the underlying vulnerability of different parts of the country to the spiralling cost of living

12 April 2022

6 minute read

  • New research by the Centre for Progressive Policy (CPP) reveals just over half of the areas most vulnerable to the cost of living crisis are ‘Red Wall’ places
  • Several coastal towns are likely to be pushed into poverty as rising costs hit those on low pay and out of work
  • Less than a quarter of the areas that will receive the most benefit from the Government’s flagship council tax rebate are among the hardest hit by the rising cost of living

6 April 2022: the Red Wall areas that swept Boris Johnson to an eighty seat majority in 2019 are set to be some of the hardest hit by the cost of living crisis, new research by economics think tank the Centre for Progressive Policy reveals today.

CPP’s cost of living vulnerability index measures the underlying vulnerability of different parts of the country to the spiralling cost of living (see notes below for details). More than half (52%) contain Red Wall seats, including constituencies in areas such as Burnley, Sandwell and Hyndburn (Conservative gains in 2019) as well as Hartlepool, the site of last May’s by-election success for the Government.

CPP’s new research also reveals:

  • The places to get hit hardest by the cost of living crisis are urban areas of the North, the Midlands and London
  • Coastal towns – including Hastings, Thanet and Dover – are at risk of being pushed into poverty as rising costs hit those on low pay
  • Less than a quarter of the areas that will receive the most benefit from the Government’s council tax rebate are among those classified by the index as highly vulnerable to cost of living pressures

To better provide financial support to those who need it most, CPP is recommending that the Government deliver an uplift in Universal Credit payments to cover the April rise in the energy price cap. At a cost of £2.4bn, this measure would be £600 million cheaper than the present council tax rebate policy, as well as being far better targeted. The ten local authorities that would see the greatest benefit through a boost to Universal Credit are also some of the most vulnerable on the CPP cost of living vulnerability index.

Ben Franklin, Director at CPP, said:

“Voters on low pay, experiencing food and fuel poverty or pushed out of work altogether, are on the margins of extreme vulnerability - but they are also in many of our most marginal seats. That adds political saliency to the urgent moral case for addressing the cost of living crisis.

“Levelling up slogans will be dead on arrival at the next election unless the Government reconsiders its policy options. Last month’s Spring Statement saw poorly targeted tinkering at the edges of the tax system, whereas our analysis suggests the Chancellor may be forced to reconsider a UC uplift to really help those hit hardest in places like Hartlepool and Hastings.”

Lisa Nandy MP, Shadow Secretary of State for Levelling Up, said:

“This new research reveals the inadequacy of the Government’s response to the cost-of-living crisis facing families. We need to get money back into people’s pockets.

“Many of the places being hit hardest are in the North and Midlands. This is the opposite of levelling up. You can only level up if people have money to spend in their local communities.”

“Labour would have scrapped the National Insurance rise and would use a windfall tax on oil and gas companies to provide up to £600 of support for struggling families.”

Notes to Editor:

For more information please contact: CPP@atlas-partners.co.uk

The cost of living vulnerability index

This index seeks to explore differences in place-based vulnerability to this crisis, at the Lower-Tier Local Authority (LTLA) level in England. Here, vulnerability to the cost of living crisis is characterised as a combination of both:

  • Poverty-based vulnerability – this refers to existing levels of poverty in a place, focussing specifically on indicators that correspond with pressures arising from the cost of living crisis. Where a place has high levels of existing poverty, we assume that they will be more vulnerable to an increase in the severity of poverty experienced locally, as a consequence of the cost of living crisis.
  • Work-based vulnerability – this measurement of vulnerability is based upon rates of participation in the formal labour market alongside the prevalence of low-paying jobs within a place. Where a place has high levels of work-based vulnerability, there is a heightened risk of people on the cusp of the poverty threshold being pulled into a state of poverty as a consequence of this crisis.

Determining the index: CPPs index is comprised of six indicators which CPP judge to be particularly salient in the current crisis: fuel poverty, food insecurity, child poverty, claimant count, economic inactivity and low pay.

Determining poorly targeted council tax rebate: this is calculated by looking at council tax rebate spend per head for all local authorities and then taking the top decile of spend. Only 22% of these places are amongst our top decile of vulnerable places.

The full data from the index is available upon request.

Red Wall seats most vulnerable to cost of living pressures

Sixteen out of the thirty-one (52%) local authority areas set to be worst hit by the cost of living crisis contain Red Wall seats. These are listed below.

CPP identifies local authorities as part of the Red Wall if they contain most of the population of a constituency in the North or Midlands that went from Labour to Tory in or since the 2019 election.

  1. Burnley
  2. Sandwell
  3. Hyndburn
  4. Blackpool
  5. Wolverhampton
  6. Birmingham
  7. Doncaster
  8. Bradford
  9. Rochdale
  10. Rotherham
  11. Bolton
  12. North East Lincolnshire
  13. Kirklees
  14. Hartlepool
  15. Redcar and Cleveland
  16. Stoke-on-Trent

About CPP

The Centre for Progressive Policy is a think tank committed to making inclusive economic growth a reality. By working with national and local partners, our aim is to devise effective, pragmatic policy solutions to drive productivity and shared prosperity in the UK. Inclusive growth is one of the most urgent questions facing advanced economies where stagnant real wages are squeezing living standards and wealth is increasingly concentrated. CPP believes that a new approach to growth is needed, harnessing the best of central and local government to shape the national economic environment and build on the assets and opportunities of place. The Centre for Progressive Policy is funded by Lord Sainsbury and hosts the Inclusive Growth Network which is funded by the Joseph Rowntree Foundation.