Cost of living crisis ‘deepening racial inequality’ with 4 in 10 non-white Londoners in poverty

The cost of living crisis will “deepen racial inequality” as soaring prices disproportionately impact people from ethnic minority groups, research has found.

The annual London Poverty Profile, published this week by Trust for London, revealed 27 per cent of households in the capital are living in poverty. For Black, Asian and minority ethnic groups, the proportion of people living in poverty is far higher at 39 per cent – almost four in 10.

Many Londoners were struggling to afford food before the pandemic, according to the report. In 2019, more than one in five Londoners had “low or very low food security”, meaning they couldn’t afford to eat or didn’t have the resources to buy food. That rate was two times higher for people from Black African, Caribbean and Black British communities. 

And record inflation rates mean that disparity is set to worsen. Research by the New Economics Foundation published in May found Black, Asian and other ethnic minority households are experiencing costs that are 50 per cent higher than white households as a portion of their income. 

White people are seeing an average increase of £2,200 in their cost of living this year, while the increase for ethnic minority households is £2,900. According to the foundation, this “increase to the cost of living will deepen racial inequality”. 

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Jabeer Butt OBE, the chief executive of the Race Equality Foundation said the figures are “shocking, but not surprising”. He said existing racial discrimination was exacerbated by the pandemic, with increased debt and loss of income impacting ethnic minority groups more acutely. 

Sectors such as hospitality came to a halt, leading to a loss of jobs where people from marginalised groups are more likely to work. Butt added: “On top of the lower levels of savings many Black, Asian and minority ethnic people have, the cost of living crisis is going to significantly impact the ability of individuals and families to cope. 

“Serious and immediate action needs to be taken by the government, from increasing payments to those who receive universal credit to re-imposing the moratorium banning evictions, if we are serious about addressing the impending disaster being faced by poor people, including those from black, Asian and minority ethnic communities.”

According to non-profit People Like Us, 34 per cent of professionals from “racially diverse backgrounds” say their salary will not cover their mortgage, rent and energy bills amid the cost of living crisis. Only 27 per cent of white people said the same.

Working professionals from ethnic minority backgrounds are nearly twice as likely to have been told they won’t be getting a promised pay rise this year due to inflation. People Like Us has also revealed two thirds (67 per cent) of racially diverse working professionals have had reason to believe that a white colleague doing the same job as them was on a higher salary.

Sheeraz Gulsher, co-founder of People Like Us, said: “It’s heartbreaking to see the devastating effect the cost of living crisis is having on people from all over the UK. But it isn’t affecting everyone equally. In these tough moments, it is really important not to let equity fall off the priority list, particularly when this data shows that this crisis is affecting those from minority backgrounds significantly more.”

Gulsher is urging the government to introduce mandatory race pay gap reporting, as they have with the gender pay gap. He said: “It will truly create huge strides in making a fairer and more equal society.”

Lindsey Poole, the director of the African Studies Association (ASA UK), said: “The level of poverty across our communities are shockingly high and, in communities experiencing racism and discrimination , the impact ratchets up to multiple problems.”

Research shows young Black people and those from ethnic minority backgrounds are most likely to take advice from others in the community who they trust. “Advice services can help,” Poole said, “but the services need to have targeted funding and delivered sensitively and by people trusted in the community. The advice and support services need to be funded to reflect how young people actually go about seeking help rather than how we think they should do it.”

Manny Hothi, chief executive of Trust for London, said: “The last two years have seen the scale and complexity of London’s challenges worsen. The situation is difficult, but our city is a resilient one, and the community spirit and energy of those fighting for change is what gives many of us hope. We will need to work together and harness this, using every tool available to us to tackle these problems and ensure that nobody has to live a life of poverty.”