Poor families will be £600 worse off by 2020/21
They came in promising to clean up Labour’s economic mess with a cocktail of public spending cuts and gifts for society’s better off.
Now Thatcherite policies are producing Thatcherite results.
Analysis by the Resolution Foundation, an independent think tank, suggests 2016/17 is a bad year to be poor in Britain:
“A particularly tight squeeze on poorer households will actually see their incomes fall and is set to drive the biggest rise in inequality over a parliament since Margaret Thatcher’s time in Downing Street.”
It warns the current parliament is set to be the worst for low and middle income households since records began in the 1960s, especially for poor families with children.
Typical household growth is likely drop to 1.2 per cent in 2016/17 thanks to rising inflation caused by Brexit’s making the pound great again and a jobs lull.
Add in comatose pay growth and £12 billion of welfare cuts, and typical household income will grow half a per cent per year up to 2020/21. This means a typical family with children would have £600 less disposable income (£18,900 – £18,300) in 2020/21 than they do now.
Torsten Bell, Director of the Resolution Foundation, said:
“Britain has enjoyed a welcome mini-boom in living standards in recent years. But that boom is slowing rapidly as inflation rises, productivity flatlines and employment growth slows.
The squeeze in the wake of the financial crisis tended to hit richer households the most. But this time around it’s low and middle income families with kids who are set to be worst affected.
This could leave Britain with the worst of both worlds on living standards – the weak income growth of the last parliament and rising inequality from the time Margaret Thatcher was in Downing Street.“
Hooray for the Tories rescuing us from Labour’s economic mess!
Adam Barnett is staff writer for Left Foot Forward. Follow him on Twitter @AdamBarnett13Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.