Child poverty in Britain will rise to record levels within the next five years with an extra 1 million children in poverty, claims a thinktank.
According to the Resolution Foundation in its annual Living Standards Outlook, three out of ten children (30%) lived in relative poverty in the UK in 2016-17. By 2023-24, this figure is set to reach 37% exceeding the previous high of 34% in the 1990s and, among some household groups, ‘more than half of children’ are forecast to be in poverty. The figures are based on a combination of the latest household income data, Office for Budget Responsibility projections, other trends and government tax and benefit policies.
‘The continuing failure to get to grips with rising child poverty seriously undermines what we stand for as a country,’ commented Campbell Robb, chief executive of the Joseph Rowntree Foundation. ‘More and more children are going to school hungry, having to go without proper winter coats or living in a family who are unable to afford a decent home. It is within the government’s power to stem the rising tide of child poverty before it reaches a record high.’
The report suggests that a combination of weak economic and income growth and benefit cuts has resulted in an increase in child poverty.
It refers to the past two years of ‘unusual political circumstances’ as the ‘Article 50 period’, and states that following a ‘healthy’ post-financial crisis growth in typical working-age incomes from 2013-14 through to 2016-17, ‘real income growth appears to have stalled in 2017-18 and 2018-19, with zero growth’.
It highlights the increasing effect that the substantial package of benefit cuts announced in 2015 has had over the past two years. In particular, the impact of the continued benefit freeze, the ‘two child limit’ and abolition of the ‘family element’.
Louisa McGeehan, director of policy for the Child Poverty Action Group said that ‘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 think-tank’s projections suggest that significant average income growth is not set to return ‘for several years’ and will remain ‘close to zero’ over the next two years. Adam Corlett, a senior economic analyst for the Resolution Foundation, said that the outlook for low and middle-income families is ‘particularly tough’. The child poverty rates for working households averaged 20 per cent between 1996-97 and 2013-14 but is projected to increase to 29 per cent by 2023-24.
The projected growth is lowest for ‘parents, the out-of-work, low to middle income working households, social renters, mortgagors and single adults’.
The report suggests that income growth for the poorest 40 per cent is expected to ‘remain lower than overall growth rather than exceeding it’, meaning the UK is not expected to meet its Sustainable Development Goal target on inequality. This is despite the Prime Minister stating that the UK government ‘will be at the forefront of delivering [the Goals] in the UK and around the world’. Meanwhile the richest 4 per cent of the population are projected ‘to continue to have a greater share of income than the entire bottom 40 per cent’.
In considering ways to beat its outlook, the think-tank stated that, ‘large improvement’ in the outlook for typical working-age incomes will ‘only come from higher real earnings growth, whilst any hope of preventing child poverty rising must come from a change in welfare policies’. It highlighted that ‘the assumptions underpinning these forecasts are not set in stone, and a large part of the reason for developing such projections is in order to encourage action designed to prove them wrong’.
A government spokesman said: ‘Our priority is to support people to improve their lives. Since 2010 we’ve introduced the National Living Wage, doubled free childcare for three and four-year-olds, and cut taxes for 32 million people to help families meet the everyday cost of living and keep more of what they earn. But we know that some people need more support. That’s why we’re spending £90bn to support families who need it, and by 2022 we will be spending £28bn more on welfare than we do now.’