There are 4.5 million children already living in poverty in the UK.
And according a new study by the Resolution Foundation — a thinktank focused on improving the lives of people on low to middle incomes — things may be about to get a whole lot worse.
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The report warns that the number of British children living in relative poverty could soon hit an all-time high. Relative poverty — different to extreme poverty — is a term that actually means different things depending on your politics. But we’ll talk a bit more about that later on.
Child poverty has already increased every single year since 2011, according to the Guardian. Now, the Resolution Foundation believes that it could peak at 37% by 2023-24 — overtaking the previous highest level of 34% from nearly 30 years ago.
In real terms, it means an extra million children who could fall into poverty in the next five years — even without contemplating the potential negative effects of leaving the European Union without a deal.
There's a lot of politics going on right now, but we mustn't take our eye off the ball on this stuff. Kids only get one chance at their childhood, and the damage can last a long time. See the full report for lots of sobering analysis, along with some hopehttps://t.co/VEiMwLkjZ5— Matt Whittaker (@MattWhittakerRF) February 20, 2019
Overall, Britain’s poorest families could find themselves £4.4 billion worse off — for a host of reasons outlined in the report.
Firstly, income growth has slowed, particularly for poorer families: mainly due to high inflation since the Brexit referendum result — meaning an increase in general prices — and benefits freezes.
Although household incomes are predicted to rise annually by an average of 0.7% over the next three years, the report identifies worrying trends predicted for mortgage cost increases; an end to the employment boom; and more hits to welfare.
Those welfare issues, according to the report, include a longstanding benefits freeze that’s been in place since 2015; the continued consequences of the “two child limit” — a policy that restricts families from claiming additional benefits for having more than two kids; and the rollout of universal credit, a controversial benefits system that critics have labelled “messy” as payments have been slow to reach beneficiaries.
The report also raises concern about the situation for single-parent families. As more children fall into poverty, more parents will do the same, it says. Working families, single or otherwise, aren’t protected either: according to the report, the poverty rate will rise for them too.
“UK households have already taken a £1,500-a-year hit to their incomes,” said Adam Corlett, the Resolution Foundation’s senior economic analyst. “There’s now a huge risk that their incomes stagnate over the next few years as the economy’s pay performance struggles to get out of first gear.”
“The UK’s current economic outlook is highly uncertain, and will hopefully surprise on the upside,” he added. “But whatever direction the economy takes, the government must reassess the continuation of working-age welfare cuts. Otherwise, its non-Brexit record risks being stained by a return to record levels of child poverty.”
However, the report also gives some indication about how to fix the problem: accelerate wage growth — which could treble income growth — and maintain the high employment rates that are otherwise expected to take a tumble.
From the Living Standards Outlook 2019 - relative child poverty has been rising steadily 2011, and sharply since 2017. By the end of the parliament it risks hitting record levels - even higher than previous peak in the early 1990s https://t.co/OiCvdBqxiXpic.twitter.com/37Quq8LNLs— ResolutionFoundation (@resfoundation) February 20, 2019
So: back to the phrase relative poverty.
It’s very different to extreme poverty, defined as living on less than $1.90 (about £1.50) a day. Between 1990 and 2013, the number of people living in extreme poverty around the world has fallen by 1 billion — over half — to 769 million.
Under Tony Blair’s Labour government of 1997 to 2010, “relative poverty” was unofficially described as living on less than 60% of the country’s median average household income. But that definition then shifted to include unemployment, family circumstances, and substance abuse when the Conservatives took power in coalition with the Liberal Democrats in 2010.
However the Social Metrics Commission — the poverty measurement group that revealed 4.5 million children are living in poverty in the UK — wants to now make the definition more consistent: to examine all assets, including savings; ensure all costs are accounted for (like rent and childcare); and include people who sleep rough too. Essentially, it wants us all to be talking about poverty in the same terms.
“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,” said Louisa McGeehan, director of policy at Child Poverty Action Group. “In the UK we have been very successful at reducing poverty among pensioners but we have allowed child poverty to rise. That is unjustifiable in a country that is compassionate and believes that every child matters.”