Poverty to rise and income to fall, says IFS
Middle incomes will fall by 7 per cent and a quarter of Britain's children will be living in poverty by 2013, says a report from the Institute for Fiscal Studies.
The forecast means that the government's target of cutting absolute child poverty levels to 5 per cent by 2020, as set down in the 2010 Child Poverty Act, is unlikely to be fulfilled.
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However, a government spokesman said that the IFS report did not take proposed welfare changes and reforms to the education system into account.
The Government must accept that you cannot fight poverty or improve life chances by making the poor poorer. Alison Garnham, CPAG
The IFS analyses tax and benefit policies, as well as official economic forecasts, to compile its report. James Browne, one of the report authors, said: "Even if there were an immense increase in the resources made available, it is hard to see how child poverty could fall by enough to hit this supposedly legally-binding target in just nine years."
Alison Garnham, chief executive of Child Poverty Action Group, called the report "devastating" and said it leave the government's social mobility strategies in jeopardy.
"Ministers seem to be in denial that, under current policies, their legacy threatens to be the worst poverty record of any government for a generation," she said. "The government must accept that you cannot fight poverty or improve life chances by making the poor poorer."
The IFS report predicts that median incomes will see the biggest three-year fall for 35 years in the period up until 2013, as a result of incomes growing more slowly than inflation over the next few years.
There will also be a rise in absolute and relative poverty, as benefits will not meet levels of inflation, even when the government's universal credit is introduced in 2013, says the report.
The economic think tank predicts that 3.1 million children (23 per cent) will be living in absolute poverty by 2013, up from 2.8 million (21 per cent) now. Absolute poverty is defined as living below 60 per cent of the 2010-11 median income, adjusted for inflation.
UK, Child benefit, Inflation, Spending review (CSR)