Poverty in the UK is increasing after two years of heavy welfare cuts have helped to push hundreds of thousands of people below the breadline, according to an independent study of the coalition government’s record.
Although middle-earners saw incomes rise marginally after 2013, policies including the bedroom tax and below-inflation benefits rises have reduced incomes for the poorest, pitching an estimated 760,000 into poverty since the last official figures were produced, according to the New Policy Institute (NPI) thinktank.
Child poverty showed the biggest increase, with 300,000 youngsters moving into hardship, reversing a fall in the headline figure recorded in the coalition’s first year. NPI estimates 29% of UK children are in poverty after housing costs.
The study challenges Tory claims that child poverty has been reduced by 300,000 on the coalition’s watch. While that figure is officially correct, NPI says, the data on which it is based only applies to the three years between 2009 and 2012.
“The clear conclusion is that poverty in the UK is rising among all age groups,” the NPI’s research director, Tom MacInnes, told the Guardian.
“The trajectory over the second half of the coalition’s term has been a bad one. The next government, whoever wins next week, will be dealing with worsening, deepening poverty.”
NPI undertook the study after the government refused to bring forward the publication of official data which would have shown the impact on poverty figures of the major welfare reforms introduced in 2013, and enabled the coalition’s record to be properly scrutinised before the election.
Official poverty data for 2013-14 will not be published until June, while figures showing the coalition’s record in the final year of the parliament will not be available until June 2016.
Alison Garnham, chief executive of the Child Poverty Action Group charity said:
“This important analysis shows the weakness of the claim being put about by ministers that they have got child poverty down despite making wide-ranging and deep cuts to benefits and tax credits.”
Responding to the report, a Conservative spokesman repeated the claim that there were fewer people in poverty compared to 2010.
“The truth is that the best route out of poverty is work, and there are now a record number of people in work – 2m more since the last election and 700,000 fewer workless households.”
Labour’s shadow welfare minister, Helen Goodman, said:
“This report shows that increasing levels of poverty under this Tory-led government are leaving millions of families struggling to make ends meet.”
Child poverty fell in the first year of the coalition, under the tax and benefits framework inherited from Labour, and remained stable for two years as median incomes fell, the study says. It started to rise again after April 2013 when a series of benefit cuts were introduced, alongside increases in tax allowance.
The median weekly income fell from £425 in 2009-10 to £392 in 2012-13, inching up to £395 by the end of the parliament, says NPI, largely as a result of increased tax allowance and rising employment. But the weekly income of the poorest 10%, which was £174 five years ago, has fallen to £160.
The upward trend in relative poverty over the past two years has affected all groups, the study finds, including working families and pensioners, while the numbers of people identified as being in severe poverty also rose.
The Child Poverty Act requires the government to reduce relative child poverty to below 10%. Latest official figures, which differ from the NPI model in that they measure poverty before housing costs are taken into account, show that 17% of children are below the breadline.
Labour says it will keep the target, though admits it is “very unlikely to be met”.
The Conservatives say they will “work to eliminate child poverty”.
The Institute for Fiscal Studies has estimated that child poverty will rise to 23% by 2020.
A person is defined as in poverty if their household income is below 60% of the median, while “deep poverty” refers to people in households where income was less than 50% of the UK median.
The study, using a model developed by NPI, estimates income and poverty levels for 2013-14 and 2014-15 using 2012-13 data adjusted for changes in population, employment, earnings, benefits and prices.
According to NPI, the government said the decisions on publication dates were not political. But a spokesman for NPI said:
“Given the significance of recent policy changes and welfare reform to the poverty landscape, not publishing official statistics before the election is also political”.
Source – The Guardian, 29 Apr 2015