Levels of child poverty in the UK are projected to rise from 27.5% in 2014–15 to reach 30.3% in 2021–22, as poor wage growth and drastic cuts to in-work benefits hit low-income households already feeling the pinch after years of austerity.
Daming new research from the Institute for Fiscal Studies (IFS) exposes the looming impact of Tory cuts to welfare benefits on low-income households, which will result in child poverty rising by 1.2 million to reach 5.1 million by 2021-22.
The IFS says slow wage growth, higher inflation, the freeze to working-age benefits, cuts to housing benefit, and reductions to work allowances in Universal Credit, will culminate in average incomes after housing costs falling for the poorest 15% of UK households, as a direct result of Tory austerity measures.
Universal Credit cuts explain around a third of the increase in relative poverty. A £3bn cut to work allowances in Universal Credit alone will see relative poverty among low-income households rise from 21.2% in 2014-15 to 23.3% in 2021-22.
The official rate of absolute poverty is actually projected to fall slightly, from 20.3% to 19.8%, while child poverty continues to rise.
Poverty among working-age adults without children is predicted to fall from 17.6% to 15.6%. But as the figures from IFS suggest, children look set to be hit hardest from the UK Government’s relentless austerity agenda.
These latest figures will be an embarrassment for Theresa May, who promised in her first speech as Prime Minister to govern for the “just about managing”.
Andrew Hood, senior research economist at the IFS, said: “Weak earnings growth combined with planned benefit cuts means that the absolute poverty rate among children is projected to be roughly the same in 2021–22 as it was back in 2007–08. In the decade before that, it fell by a third.
“Tax and benefit changes planned for this parliament explain all of the projected increase in absolute child poverty between 2014–15 and 2021–22.”
Campbell Robb, chief executive of the independent Joseph Rowntree Foundation, said: “These troubling forecasts show millions of families across the country are teetering on a precipice, with 400,000 pensioners and over one million more children likely to fall into poverty and suffer the very real and awful consequences that brings if things do not change.
“One of the biggest drivers of the rise in child poverty is policy choices, which is why it is essential that the Prime Minister and Chancellor use the upcoming Budget to put in place measures to stop this happening.
“An excellent start would be to ensure families can keep more of their earnings under the Universal Credit.”
Peter Dowd MP, Labour’s Shadow Chief Secretary to the Treasury, said: “Today’s damning indictment on the outlook for living standards is yet more evidence of the Tory Government’s economic failure.
“The IFS concludes that ‘we are in the middle of a historically weak period of growth in living standards’, with median income set to be up to 16 percent lower in 2021-22 than it would otherwise be if the Tory Government had continued long-run trend growth.
“With a dreadful record on living standards, and inequality and poverty set to increase, it is clear that after seven years of economic failure the Tory Government will continue to fail working people.
“Only Labour will take the action needed to end the Tories’ economic failure by introducing a Real Living Wage of £10 an hour by 2020.”
A Treasury spokeswoman told Mirror Online: “We are taking action to support families with the costs of living by cutting taxes for millions of working people, doubling free childcare for nearly 400,000 working parents and introducing the National Living Wage – a significant pay rise for the lowest earners.
“More people are now in work than ever before with living standards also forecast to rise over this Parliament.”
Trussell Trust provided more than 500,000 three-day emergency food parcels between April 2016 and September 2016, including over 188,500 to children, with benefit delays and changes accounting for 44% of all referrals.
Low income was the second largest reason, such as low pay and insecure work (zero-hours contract, agency work, etc), accounting for around one in four of all referrals to the Trussell Trust foodbank network.