The poverty crisis in the UK, which has deepened over the past 14 years, has been starkly revealed in two reports detailing the severe impact of low wages and rising prices on the lives of 900,000 children. Both major political parties are proposing strict welfare spending plans, with reports highlighting the connection between increasing child poverty and slow wage growth under five Conservative governments since 2010, marking the slowest growth since World War II.
Research by the Trades Union Congress (TUC) showed that over the past 14 years, an additional 1,350 children per week in households with at least one working parent have been pushed into poverty. Paul Nowak, the TUC’s general secretary, emphasized that no child in Britain should be living below the breadline and called for an economic reset and a government committed to making work pay. The TUC identified wage stagnation as part of a “toxic combination” of insecure work and social security cuts that have severely impacted household budgets, increasing the number of children in poverty with at least one working parent by 900,000 between 2010 and 2023.
The Institute for Fiscal Studies (IFS) reported that 30% of children now live in households below the official poverty line, up from 27% in 2010. It projected that an additional 670,000 children will be affected by the two-child limit on benefits over the next parliament. Labour has pledged to review universal credit and develop a strategy to reduce child poverty but has not announced plans to abolish the two-child limit.
The Resolution Foundation thinktank’s analysis revealed that average wages are only £16 a week, or 2.5%, higher in real terms than in 2010. In contrast, average weekly wages grew by £145 in the 14 years before 2010. If UK wages had kept pace with those in the US and Germany between 2010 and 2022, workers would have seen an annual pay rise of 0.8%, equivalent to £3,600 on average. Even matching Ireland’s 0.4% annual growth would have resulted in an average pay increase of £1,600.
These reports highlight the significant challenges facing the next government as public services compete for limited resources. The IFS predicted that a Labour government would likely raise taxes or relax debt rules rather than cut public service spending, especially under pressure from public sector pay demands. Media reports indicate that families increasingly rely on teachers and GPs for help with feeding and clothing children, with over 1 million children experiencing extreme material hardship last year.
Earlier this month, the TUC reported a nearly 1 million increase in the number of people in insecure, low-paid work during the Conservatives’ time in office, reaching a record 4.1 million. The number of people in precarious employment, including zero-hours contracts, low-paid self-employment, and casual or seasonal work, grew by nearly 1 million between 2011 and 2023. The Resolution Foundation emphasized that while work is the most effective way to escape poverty, this link is weakening as cuts and rising costs force households to take on precarious employment. The number of people on zero-hours contracts is near a record high at 1.03 million, with 13% of workers on some form of flexible contract.
Both main parties aim to boost employment over the next parliament, but this is “challenging,” according to the Resolution Foundation, since 58% of the increase in inactivity among working-age adults since 2019 is due to people who do not expect to return to paid work. To improve the employment rate, parties would need to increase workforce participation among older workers, women with children, and those affected by ill-health and disability.
The Conservatives plan to toughen sanctions for those on unemployment benefits and cut national insurance contributions to incentivize work. Labour’s proposals include local employment and skills support for those with health conditions, along with careers and mental health support for young people. The Resolution Foundation called Labour’s employment rate target of 80% “extremely ambitious” by historical standards. Hannah Slaughter, a senior economist at the Resolution Foundation, noted that the UK’s decade-long jobs boom during the 2010s has ended, with employment yet to return to pre-pandemic levels. Both parties offer different approaches to job growth: the Conservatives focus on tax and benefits adjustments, while Labour emphasizes career, skills, and health support.
