UK on course for 'record level of child poverty'

The government must reconsider welfare cuts as the country runs the risk of child poverty hitting record levels, according to a report.

The Resolution Foundation - a think-tank which focuses on raising living standards - said that typical working-age household incomes were "not forecast to rise materially over the next two years" following two years of "stagnation".

Its Living Standards Outlook showed that despite current levels of record employment in the UK, weak wage growth by historical standards since the financial crisis had combined with lower benefit payments to hit the poorest the most.

It stated that wages - currently growing by more than 3% - were projected to remain below pre-crisis levels of 4%.

:: Real wage growth climbs to two-year high

The report suggested the wage element was the main factor behind its "bleak" projections that the proportion of children living in relative poverty was on course to hit 37% by the end of the current parliament in 2022, topping the previous record of 34% set in the early 1990s.

In that scenario, it believed a majority of families with more than two children and most children in single parent families would be affected.

The report said ministers must reassess the impact of benefit cuts, including the two-child limit, even if the UK economy surprises to the upside following Brexit which, it said, had already hit people's pockets because of several factors including the collapse in the value of the pound.

:: Soaring rate of child poverty in privately-rented homes

The foundation's senior economic analyst, Adam Corlett, said: "UK households have already taken a £1,500 a year hit to their incomes, compared to pre-referendum expectations.

"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 report was released just months after a United Nations report accused ministers of presiding over "callous" policies that hit the poorest the most.

Responding to the Resolution Foundation report, a spokesperson for the government said: "Our priority is to support people to improve their lives.

"Since 2010 we've introduced the National Living Wage, doubled free childcare for three- and four-year-olds, and cut taxes for 32 million people to help families meet the everyday cost of living and keep more of what they earn.

:: UK child poverty 'hits 4.1 million in 2018'

"Yesterday's figures show the unemployment rate is the joint lowest since 1975 and wages are growing at the fastest rate in over a decade, outpacing inflation for nearly a year.

"But we know that some people need more support. That's why we're spending £90bn to support families who need it, and by 2022 we will be spending £28bn more on welfare than we do now."

Margaret Greenwood, shadow work and pensions secretary, said: "This report is a damning verdict on almost nine years of Conservative austerity.

"Over four million children are growing up in poverty under this government and that figure is set to rise to over five million in the next few years.

"Labour will stop the roll-out of Universal Credit, put an end to zero-hour contracts and introduce a Real Living Wage of £10 an hour."