Friday 11 February 2022 / 3:00 PM Equalities / Taiwo Owatemi

Four in five Black people have less than £1,500 in savings to cope with Tory cost of living crisis

The Conservative Government is leaving people from Black households exposed to the cost of living crisis, Labour has claimed, as new analysis from the Party reveals that almost four in five have less than £1,500 in savings – and a quarter have none at all.

New analysis published to coincide with Race Equality Week (7-13 February) shows that over 1.2 million (78%) adults from households headed by someone from a Black, or African, or Caribbean or Black British background reported having less than £1,500 in savings and investments. Over half a million (24%) reported zero savings.

Adults in households from Pakistani and Bangladeshi backgrounds are also disproportionately at risk of soaring price rises, with 72% and 73% respectively holding less than £1,500 in savings as the crisis bites. In both groups, over a quarter of adults (27% and 28% respectively) don’t have any savings.

The figures for these groups compare poorly with the national average of almost half (48%) of UK adults reporting less than £1,500 in savings and 15% reporting none at all. That still leaves almost 10 million adults from all backgrounds without any savings at a time when rising inflation is pushing up energy, food and fuel prices.

The structural barriers facing Black, Asian and minority ethnic communities in the workplace are likely to be a contributing factor to their low levels of savings. Official government statistics show that eight per cent of Black people are unemployed – double the national average – while people from Pakistani and Bangladeshi backgrounds have the lowest hourly pay. 17 per cent of people living in Asian households also have a persistent low income – the highest of any ethnic group.

Labour’s analysis comes 18 months after the Party published a review by Baroness Doreen Lawrence into the disproportionate impact of Covid-19 on Black, Asian and minority ethnic communities.

It found that Black, Asian and minority ethnic workers were over-represented in shutdown sectors, and Pakistani and Bangladeshi workers also overwhelmingly more likely to be self-employed.

The Lawrence review called on the Government to tackle persistent racial inequalities by:

  • Implementing a Race Equality Strategy, developed with Black, Asian and minority ethnic communities and with the confidence of all those it affects.
  • Implementing a national strategy to tackle health inequalities, with ministerial accountability and targets.
  • Making better use of equality impact assessments to shape and inform policy, with policymakers seeking to tackle structural racism with their decisions.
  • Enacting section 1 of the Equality Act which covers socio-economic disadvantage.
  • Making the publication of ethnicity pay gaps mandatory for firms with more than 250 staff, to mirror gender pay gap reporting.

Labour leader Keir Starmer responded to the Lawrence Review by pledging that the next Labour Government would introduce a new Race Equality Act to tackle structural racial inequality at source.

The Conservatives have yet to implement the review’s recommendations. In the wake of the Black Lives Matter protests in 2020, they created a Commission on Race and Ethnic Disparities led by Dr Tony Sewell that has questioned the existence of structural racism.

Taiwo Owatemi MP, Labour’s Shadow Minister for Equalities, said: 

“This is a damning indictment of over a decade of Conservative failure to tackle deep-seated structural inequalities that the pandemic only made worse. Instead of confronting the racial inequalities in health, housing and the workplace exposed by the Lawrence Review, the Conservatives are questioning whether structural racism even exists.

“Black, Asian and minority ethnic people deserve better than this Conservative Government, and so do the almost 10 million people from all backgrounds who don’t have a penny in savings to fall back on as this crisis bites.

“Labour’s contract with the British people will ensure they are treated with respect, and our fully-costed energy plan would deliver security to those most in need by cutting up to £600 off their energy bills.

“The next Labour Government will also bring in a Race Equality Act to tackle structural racial inequality at source and start tackling the problems that the Conservatives have either ignored or exacerbated since 2010.”