Poor wage growth and continued cuts to welfare benefits will push a further one million children into poverty by the end of this parliament, according to a damning new report from the Resolution Foundation.
The report warns that many UK families are facing years of stagnating living standards, with the number of households living below the breadline set to hit a new record high by 2024.
Analysis suggests that low-to-middle income working households real disposable incomes in 2023-24 will be no higher than they were in 2003-04, with projections looking particuarly bleak for the very poorest families.
The report, The Living Standards Outlook 2019, shows that ongoing welfare cuts, such as the benefits freeze and highly controversial two-child limit, will lead to a sharp rise in relative child poverty, which has been increasing continuously since 2011.
It finds that by the end of the current parliament the proportion of children living in relative poverty (after housing costs) will hit a record 37%, compared to the previous high of 34% in the early 1990s.
By the end of 2024, the report warns the majority of children in single parent families or in larger families could be living in relative poverty, unless the government reconsider tax and benefit policies.
Adam Corlett, Senior Economic Analyst at the Resolution Foundation, said: “UK households have already taken a £1,500 a year hit to their incomes, compared to pre-referendum expectations.
“There’s now a huge risk that their incomes stagnate over the next few years, as the economy’s pay performance struggles to get out of first gear.
“The outlook for low and middle income families is particularly tough, with ongoing benefit cuts set to drive down income levels and drive up child poverty.
“The UK’s current economic outlook is highly uncertain, and will hopefully surprise on the upside. But whatever direction the economy takes, the government must reassess the continuation of working-age welfare cuts.
“Otherwise, its non-Brexit record risks being stained by a return to record levels of child poverty.”
The Children’s Commissioner for England, Anne Longfield, tweeted: “The number of children in poverty in our country now should shock every politician into action.
“Child poverty has been reduced before and there is no practical reason why it can’t be again. Another rise should not be inevitable.”
Louisa McGeehan, from the Child Poverty Action Group, said: “After years of deep social security cuts we are on the cusp of a child poverty crisis which will damage both the life chances of a generation and the wider economy.”
The news comes as the latest labour market figures show that real wages are still 1.9% lower than a decade ago and 844,000 workers are stuck on zero-hours contracts.
Commenting on these figures, TUC General Secretary Frances O’Grady said: “Workers are facing a triple whammy. Employers are still not giving people the pay rises they deserve, leaving them worse-off than a decade ago.
“Millions don’t have the security of a solid job, because the government won’t crack down on insecure work. And the Prime Minister’s reckless Brexit strategy is causing employers to take flight.
“The government must put its power behind workers’ needs. We need a plan to restore job security and wages, with new laws to outlaw shady employment practices.
“And the prime minister must rule out a no-deal Brexit and ditch her red lines.”
She added: “There are still over 800,000 people stuck on zero-hours contracts.
“Most of them have no guarantees of basic rights like paid leave and sick pay. They want solid jobs and they need the government to get on and help them.”