A stronger economy is likely to make little difference to the poorest UK households unless there is targeted support to tackle poverty, a report has warned.
Anti-poverty charity the Joseph Rowntree Foundation (JRF) said it is “deeply unjust” to expect struggling families to wait for wider economic growth, and re-emphasised its plea for the two-child limit on benefits to be scrapped.
Prime Minister Sir Keir Starmer has previously indicated he would like to scrap the limit but that the Government cannot currently afford to do so, and has repeatedly stressed the focus on growing the economy.
According to its analysis of Office for Budget Responsibility and Bank of England forecasts, levels of poverty and deep poverty will remain “broadly” flat for the next four years “without additional action from the Government”.
It warned poverty levels could even rise if economic growth is not accompanied by employment growth.
According to its modelling, the JRF said none of the nine English regions are likely to see a fall in child poverty over the four years to January 2029, with five regions – East Midlands, South West, South East, East of England, and Yorkshire and the Humber – even possibly seeing rises.
The JRF’s report, published on Wednesday, stated: “It is almost certain that economic stability is necessary to sustainably reduce poverty.
“However, economic growth on its own won’t reduce poverty, and it is deeply unjust to force families to wait for economic growth before they feel their situation improve, especially given the picture of deepening poverty.”
The latest official statistics, released last year, showed the estimated total number of people in relative low income in the UK was at 14.35 million in the year to March 2023, with some 4.33 million of those being children.
The figure for children was the highest since comparable records for the UK began in 2002/03.
A household is considered to be in relative poverty if it is below 60% of the median income after housing costs.
The JRF said the figures equate to around two in every 10 adults and three in every 10 children being in poverty.
Child poverty rates are highest in England (30%) and Wales (29%), compared with Scotland (24%) and Northern Ireland (23%).
The JRF analysis suggested the lower level in Scotland is likely to do with the Scottish Child Payment – a benefit paid to low-income families with children in Scotland – and noted the government north of the border had pledged to end the two-child cap on some benefits.
The charity said its analysis showed only child poverty rates in Scotland would likely fall further by 2029.
While lower average housing costs in Scotland and Northern Ireland were previously thought to drive lower poverty rates in the two nations, the JRF said its analysis looked at poverty before housing costs are taken into account and found Scotland still likely to have continued lower levels.
It said this highlights “the effect benefits can have in reducing poverty”.
The charity said while the new Labour Government had, as part of its October Budget, taken some steps around universal credit, boosted the national living wage, and increased investment in social housing, these were “timid” moves and “fall a long way short of what is required to deliver the scale of change needed”.
The JRF said the Government’s child poverty strategy, expected in spring, must abolish the two-child limit on benefits and introduce a protected minimum amount of support to universal credit to ensure households can afford the essentials.
Paul Kissack, JRF chief executive, said for the strategy to be “credible” it must include policies that “rebuild the tattered social security system”.
He said: “Child poverty will only be driven down through focused, deliberate and determined policy action.
“Even very strong economic growth won’t automatically change the picture.
“Policy action must start with the system designed to help people meet their costs of living – social security.
“At the moment, that system is not only failing to do its job but, worse, actively pushing some people into deeper poverty, through cruel limits and caps.”
The report noted levels of poverty in working households, with 71% of children in poverty in a household where at least one adult worked, while just over half (52%) were in a family where at least one adult was working full-time.
The Trades Union Congress (TUC) said: “Every worker deserves to earn a decent living. But many working households are struggling to keep their heads above water.
“This is unacceptable. Working people should be able to put food on the table for their families and keep their children warm during the winter. ”
The union’s general secretary Paul Nowak said: “Better work is crucial for ending child poverty, but decent social security matters too. The Government must remove the two-child benefit cap which is keeping too many children in working households in poverty.”
A Government spokesperson said: “No child should be in poverty – that’s why our ministerial taskforce is exploring all levers available across government to give children across the United Kingdom the best start in life, while our Plan for Change will raise living standards across the country.
“As we fix the foundations of the economy, we’re increasing the Living Wage, uprating benefits and supporting 700,000 of the poorest families with children by introducing a Fair Repayment Rate on Universal Credit deductions to help low-income families and make everyone better off.”
