1.2 million children could be in poverty by 2030, says new Fabian report

Implementing decent Living Wage and minimum wage policies could lift 900,000 people out of poverty - we need to act now


A report released by The Fabian Society today paints a stark picture of life in Britain in 2030, with inequality getting worse and children at risk of poverty. The report predicts that, unless we act now:

  • An extra 3.6 million people will fall into poverty, including 1.2 million children.
  • The real disposable income of middle income households will rise by 9 per cent over the next 15 years; for low income households the figure will be just two per cent, despite the fact that GDP per capita will rise by 32 per cent.
  • The incomes of high-income households will rise eleven times faster than those of low-income households.
  • High earnings will rise twice as fast as low earnings.

Crucially, the report says that in 2030, ‘living standards and the extent of inequality will be determined by political choices rather than by unstoppable economic forces’, naming social security policies and growing income disparities as the key factor behind this widening gap.

It recommends labour market reforms which it says could directly slow this rising inequality, especially improving support and incentives mothers, disabled people, carers and people in their sixties in order to raise employment levels; the target is that 80 per cent of adults below pension age will be in work by 2030.

The Fabians argue that ‘predistribution’ – tackling inequality and poverty by addressing the Labour market – will ‘generate significant resources for the exchequer’. It estimates that the proceeds of the minimum wage and Living Wage policies alone could double the real value of child benefit over fifteen years, lifting 900,000 people out of poverty.

Among the report’s other recommendations are:

  • The introduction of a ‘prosperity fund’, to redistribute to low and middle income households the proceeds from predistribution.
  • The development of a radical cross-government strategy on pay and productivity, with particular focus on the middle of the labour market.
  • Legislation for all public sector jobs to pay the Living Wage
  • Introduction, by 2020, of a minimum wage that equates to 60 per cent of median earnings.

Although the report emphasises that there is hope, the effects of inaction will be serious, and there is no room for complacency: even with ‘very high levels’ of employment, the Fabians estimate that in 15 years there would still be 3.1 million more people in poverty than today, including 970,000 extra children.

Ruby Stockham is a staff writer at Left Foot Forward. Follow her on Twitter

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