Child poverty increasingly among working families

Nearly two-thirds of poverty-stricken children now live in a working family, new research by the Institute of Fiscal Studies has revealed.

In years where employment has risen earnings have also fallen, leading to a situation where while absolute child poverty has remained largely unchanged, the proportion of children in poverty living in a working family has risen from 54 per cent in 2010 to 63 per cent in 2014, the study found.

The report also highlights the impact of welfare reform on families, leading to arrears in council tax and social rents, and warns benefits cuts outlined in the recent budget will “put upward pressure on absolute poverty”.

One of the report’s authors Chris Belfield, a Research Economist at the IFS, said: “The recent stability in absolute income poverty among children has masked important and offsetting trends.”

He said the nature of labour market since the recession had been “robust employment and weak earnings”.

Julia Unwin, Chief Executive of the Joseph Rowntree Foundation, who commissioned the report, said: “A strong economy and rising employment have masked the growing problem of in-work poverty, as years of below-inflation wage rises have taken their toll on people’s incomes.

“The upcoming minimum wage rise will help, but many low-income working families will still find themselves worse off due to tax credit changes. Boosting productivity and creating more jobs which offer progression at work is vital to make work a reliable route out of poverty.”

SNP MSP Joan McAlpine said the figures were evidence of the Conservative Government’s “relentless attack on the poor”, and said it made a case for why more powers over social security should be transferred to Scotland.

Labour’s Shadow Scottish Secretary, Ian Murray said the report should be a “wakeup call” to both the UK and Scottish Governments.

“The UK Government must tackle low pay rather than attacking the low paid with tax credit cuts, and accept Labour's amendment to the Scotland Bill which would allow the Scottish Parliament to design its own welfare system.

 “The SNP government need to use the extensive powers they have and that are coming to help families rather than waxing lyrical about the powers they don't have.

The report also found while inequality among the majority of the population has fallen since 1990, the top one per sent have seen their share of household income rise from 5.7 per cent in 1990 to 8.4 per cent in 2013-14.