Incomes are not keeping up with prices, and the living standards of ordinary working families are being eroded.
This is according to an October 2017 briefing (pdf) on the November budget from the Joseph Rowntree Foundation (JRF).
The briefing finds:
- Almost half a million more people are likely to be in poverty by 2020-21 because of the four year freeze on benefits that began in 2016-17. It is the biggest policy driver behind the expected rise in poverty
- Higher than forecast inflation means the hit to low-income families – and gain to the Treasury – will be an estimated £0.9bn more than the £4bn originally expected from this cut in 2020-21
- JRF recommends removing the freeze on income-related benefits and uprating them with CPI inflation from 2018-19. This would result in 380,000 fewer people in poverty in 2020-21; some 9 in 10 would be in families with children and 17 in 20 would be working families. It would cost an estimated £2.8bn in 2020-21
- Uprating just the child related elements of Universal Credit from 2018-9 would cost around £1bn in 2020/21 and result in 100,000 fewer people in poverty that year
- Uprating the Local Housing Allowance with local rents would help the 4.7million people living in the private rented sector who experience poverty after paying housing costs
- Unfreezing benefits is a more effective way to help low-income families than increasing the personal tax allowance (PTA). The planned PTA should be delayed or cancelled – only £1 in every £6 spent on this policy goes to the bottom half of the income distribution.