Child poverty is part of a wider inequality and needs urgent attention
The increasing disconnect between policy-makers and the most disadvantaged must be addressed as childhood poverty continues to regularly make the headlines, thanks to reports from organisations like End Child Poverty whose figures for 2018 reveal that there are now constituencies within the UK where more than half of children are growing up in poverty. What makes matters worse is the fact that future trends look far from encouraging. Another 1.5 million children are expected to be plunged into poverty by 2021 due to further benefit changes. By 2021/22, more than 5 million children will be growing up in poverty.
By all accounts, the UK is not on track to meet its target of eradicating child poverty by 2020, given these latest figures, as more work is urgently required to tackle the underlying causes of poverty.
Firstly, austerity has disproportionately affected those on lower incomes. A recent Equality and Human Rights Commission study showed that by 2021/22, the cumulative impact of all policy introduced since 2010 will have reduced the incomes of the poorest fifth of households by about a tenth. In comparison, the richest fifth remain widely untouched. Most unsettling is that three-quarters of the welfare cuts announced in 2015 have yet to be introduced. The Resolution Foundation estimates that the measures coming into effect from this month alone will leave 11 million families worse off.
Secondly, costs for many families have increased significantly with the housing being a key concern.
The proportion of people in the poorest fifth of the working age population who spend more than a fifth of their income on housing has risen from 39 percent in 1994/95 to 47 percent in 2015/16. A lack of social housing has forced people into renting at a high cost in the private sector. As a result, 90 percent of low-income renters face a shortfall between their housing benefit and their rent. An additional pressure on family budgets comes in the form of the high cost of childcare, resulting in an extra 130,000 children living in poverty.
Finally, almost 70% of children living in poverty actually live in a working household. But the growth of in-work poverty has been one of the key poverty game-changers of the past few years. As real wages fall, the consequence is a rise in poverty. Resolving in-work poverty requires attention not just on wages but also on welfare, housing and on a wider inequality.
Whilst redistribution will always be an important part of tackling poverty and inequality, what is urgently needed is to embed fairer outcomes into the economic system. This means looking at changes to universal credit, meeting the shortfall in affordable housing, improving childcare so that it allows parents, particularly those working on zero-hour contracts where regular hours are not always guaranteed so sometimes childcare payment is required upfront, and finally investment in rebalancing the economy regionally.
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