In-work poverty a growing crisis for 14 million struggling to make ends meet

Social Metrics Commission researchers warned that austerity measures continue to drive spiralling child poverty rates

Campaigners have challenged new Prime Minister Boris Johnson to boost living standards and help build “a more hopeful economic future” in the UK – after new data showed more than 14 million trapped in poverty.

An independent report published today by the Social Metrics Commission, a group set up to shape the way poverty is measured, revealed that the number of working people living in poverty has shot up nine per cent since the millennium.

At that time, a little over half (54 per cent) of children in poverty were in households that had at least one working adult. In 2017-2018, that hit 73 per cent.

At the millennium 54% of children in poverty lived in a family where an adult worked. That rose to 73% in 2017-18.

The Commission released its first report last year in which it said all available assets like savings should be taken into account when measuring income, rather than just a family’s income, with consideration given to how childcare, housing and disability costs eat away at earnings.

Nearly half (49 per cent) of the 14.3 million living in poverty have been struggling financially for at least two of the last three years, affecting 2.3 million children.

And more than a third – 4.5 million people, which is 7 per cent of the population – are trapped in deep poverty, meaning they earn at least 50 per cent below the official poverty line.

Helen Barnard, deputy director of policy and partnerships at the Joseph Rowntree Foundation and one of the commissioners behind the report, described the new figures as “unacceptable”.

She said: “We all want to live in communities free from the grip of poverty.

“We need our new Prime Minister to get to work immediately on a bold plan to boost living standards and support our towns and cities in building a more hopeful economic future. 

“We know that low-income voters are restless to see action and are turning out at the ballot box in greater numbers. The party that brings forward policies to unlock opportunities, boost skills and invest in affordable homes to help this group will stand the best chance of earning their support.”

The Commission found that, while the dimensions of UK poverty are changing, the overall rate has stayed largely the same since 2000-01. However analysis shows that children, disabled people, ethnic minorities, pensioners and single adults are all being hit particularly hard by falling living standards. This has been particularly notable since 2013 as a result of austerity measures like the benefits freeze, the commission said.

The government previously said it will produce data on UK poverty levels using its approach. There is not currently an official way of measuring poverty after he Conservative government abolished the existing child poverty indicator in 2015 in England (it was retained in Wales, Scotland and Northern Ireland).

Researchers also revealed that people in poverty are twice as likely to suffer from loneliness than those living above the breadline.

Alison Garnham, chief executive of Child Poverty Action Group, said that child poverty will continue to rise if Boris Johnson does not take action.

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She explained: “This is one area where what governments do – and don’t do – makes a difference. Great progress on child poverty had been made but by cutting £40bn a year from our work-and-pensions budget through cuts and freezes to tax credits and benefits, the government has put progress into reverse.

“As it reaches more families, the two child limit will increase poverty in larger families, compounding the Commission’s findings. By reinvesting in benefits for children – including removing the poverty-producing two child limit and benefit cap, restoring and uprating child benefit and the child element in universal credit and reinstating the higher payment for the first child in universal credit – we can lift 700,000 children out of poverty and increase family income by an average of £1,000 per year.

“Investing in children is an important first step for a government that wants to reunite the country.”

The way poverty varies region to region was mapped, showing that Wales and London are where the most people are struggling (24 and 28 per cent respectively, compared to the 22 per cent national average).

This was lower in the South East (18 per cent) as well as Scotland and Northern Ireland (both 20 per cent).

Anne Longfield, the Children’s Commissioner for England, described the findings as “alarming”.

“Growing up in poverty impacts not only on the day-to-day lives of children, but seriously hampers their chances of doing well at school and their job prospects and health in adulthood,” she added.

Tackling and eliminating child poverty should be an ambition and priority for all governments. The upcoming Spending Review is the chance for the new Prime Minister to show that turning around the lives of these children matters to his government.

“It will not be cheap and it will require strong leadership across government departments, capital investment in institutions that can help our most vulnerable children and targeted long term investment in family and child support. The government can also have an immediate impact looking again at the impact of Universal Credit on those families who are already struggling.

“We know that reducing child poverty can be done, because it has been achieved before. It is time to make it a priority again.”