I am deeply concerned by findings made by the Resolution Foundation, in their report ‘The Living Standards Audit 2018’, which shows that typical household incomes for working-age families grew by just 1.4% (in real terms) less than the average (2.1%) recorded between 1994 and 2007. This has resulted in inequality being little changed for the last decade and relative child poverty has “risen to its highest rate in at least 15 years, despite high levels of employment.”
The report states that working-age incomes in 2016-17 were just 4% higher than they were in 2006-07. When you focus on those on low to middle incomes, the Resolution Foundation notes, “the picture is even worse: growth of just 0.3% in 2016-17 left median incomes in the group entirely unchanged on the decade.”
The reasons noted within the report for this failure to promote equality and tackle child poverty were two-fold: inflation and the UK Government’s benefits policies. On inflation the report says that 2016-17 marked the end of ultra-low inflation which was accentuated by “the subsequent sharp drop in the value of the pound provoked (by some delay) an increase in the costs of important and a spike in inflation.” The UK Government’s welfare policy to cut people’s benefits is cited as another contributory factor in this lost decade. The report states that under the last Labour Government in-work benefits increased generously, but since then the cuts to housing benefit and the failed roll-out of Universal Credit has dramatically impacted upon those who are low to middle income households.
On poverty the report says that the pattern of growth in poverty is clear and there are now a number of people living in households with incomes below 60% of the median. The Resolution Foundation point to 2017-18 as being a year that “delivered a notable increase” in poverty rates and “relative child poverty may have risen to its highest rate in at least 15 years, despite high levels of employment.”
The Resolution Foundations report into poverty and wages is deeply concerning. It demonstrates that the UK Government has presided over some of the lowest wage rises in decades and more shocking an acceleration in the number of children falling into poverty. We may be witnessing policies being implemented that we produce a lost generation.
The UK Government like to boast about the highest levels of employment seen for generations, but what this report shows when you peer behind the topline figures you can see child poverty increased to its highest levels in at least 15 years and wage growth of just 0.3% for those on low and medium incomes.
We have long been pointing out on the Labour benches that cutting social security to the bone for in-work families would harm people’s incomes. This report concludes that is the case. We have long said that the rise in zero-hours contracts harms people’s ability to earn a decent day’s wage, this report agrees.
It is reckless of this UK Government to ignore the growth in poverty. Delyn has witnessed its largest growth in child poverty in decades, with some wards facing child poverty rates, after housing costs, of over 40%. We need to renew our battle against child poverty so that we give the next generation the best possible start in life.