UK to experience longest fall in living standards for over 60 years
The findings will fuel challenges currently facing Theresa May over failure to improve equality in the UK, after the entire board of her social mobility commission quit over the weekend at the lack of progress towards a “fairer Britain”.
Alan Milburn, the Government’s social mobility tsar, who has chaired the commission since 2012, announced on his resignation after months of “indecision, dysfunctionality and lack of leadership”, adding there was “little hope” of Ms May’s administration delivering a more equal society.
The high-profile resignation also eclipsed the Government’s mental health announcement on Sunday and Justine Greening, the Education Secretary, was forced to defend the Government.
She refused to be drawn on whether she had fought for Mr Milburn’s reappointment, simply saying: “He has done a fantastic job but his term had come to an end. I think it was about getting some fresh blood into the commission.”
Opposition parties branded the move a vote of no confidence in the Government’s policies, with Liberal Democrat leader Sir Vince Cable accusing ministers of being “too preoccupied” by internal infighting and Brexit to tackle social injustice.
The report echoes the concerns of the commission, warning that significant reductions in poverty levels – which researchers measured by the proportion of people in households with an income lower than 60 per cent of the median household income – are at risk of being reversed without immediate action.
It warns that the squeeze on living standards now risks storing up problems for the future, with people being caught in a “standstill generation” – unable to build the foundations for a decent, secure life.
Debbie Abrahams MP, Shadow Work and Pensions Secretary, said the 700,000 increase in the number of children and older people in poverty was “totally unacceptable”, adding: “The past seven years of flat-lining wages and austerity cuts, now combined with sharply rising costs of household essentials, is a truly terrifying prospect for millions trying to make ends meet.
“The cuts to universal credit, which were not addressed in the recent Budget and mean that ‘work does not always pay’, will push even more children and working-age adults into poverty. Even the Government’s own social mobility commission has resigned over their failure to act.”
The report shows that people on low incomes are increasingly struggling to afford a home, with almost half on the lowest incomes – 3.2 million working-age people – now spending more than a third of their income on housing. Falling homeownership also means more elderly people are likely to rent and have higher housing costs in retirement.
Another threat to poor households are rising costs, which have seen people in the poorest fifth of the population experience a higher rate of inflation than the rest of the country in every year since 2003 except 2010, the report states.
Because of this, many are falling behind with bills and unable to put away for a secure retirement. More than two million of the poorest households have “problem debt” and 70 per cent of people in work in the poorest fifth of the population are not contributing to a pension – amounting to around 2.3 million people.
The JRF is now calling on the Government to end the four-year freeze on working-age benefits and tax credits, saying this is the single biggest policy driver behind rising poverty. It is also urging ministers to invest in a more ambitious house-building programme and do more to drive up adult skills.