Britain’s poorest households continue to see their life-line incomes slashed despite the government claiming that austerity is coming to an end, a new report from the Office for National Statistics (ONS) reveals.
Data reveals how low-income households have borne the brunt of tax and benefit changes, as the ONS warns that plummeting incomes among the poorest one-fifth of households have been “driven mainly by a fall in the value of cash benefits they received”.
The fall in the average real value of benefits (excluding state pensions) received by households in the bottom income quintile contributed negative 4.6 percentage points to the 3.9% decline in average unequivalised household disposable income.
Overall, there was a 10.4% decline in the average real value of benefits (excluding state pensions) households received.
Meanwhile, the very richest households continue to see their disposable income increase under the current government.
Income from employment (wages and salaries, and self-employment) increased by 6.7% in real terms, providing an income boost for the second, third, and top income quintiles.
But as the above diagram shows, the poorest households have been hit by a relentless fall in average income due to benefit cuts and changes.
As the ONS points out in its report, many working age benefits have been frozen at 2016 levels, meaning there has been a real terms fall in the value of benefits paid to struggling households.
This has been further compounded by the Benefit Cap, which restricts the amount of certain benefits that most working-age households can claim.
Responding to the findings, Labour’s Shadow Chancellor John McDonnell said: “This is yet more worrying evidence of rampant inequality in the Conservatives’ Britain.
“With the incomes of the poorest falling and those of the richest rising fastest, it’s clear the Government has learned nothing.
“And as if things weren’t bad already, the Conservatives are talking about making the situation worse with yet more cuts to taxes and benefits.”