Poorest families worse off under Boris Johnson while incomes of richest soar, new analysis finds

‘Far from ​‘levelling up’, the families and places that were already poorest have fallen even further behind’

Rob Merrick
Deputy Political Editor
Monday 13 December 2021 14:34
Boris Johnson admits he has only ‘skeleton’ of a plan to level-up country

The poorest half of families are worse off since Boris Johnson came to power while the richest have seen their incomes boom, says a damning report on his “levelling up” pledge.

Half of UK households have lost £110 since his December 2019 election win, it finds, yet the top 5 per cent have enjoyed gains of more than £3,300 – sending poverty soaring by 300,000.

The New Economics Foundation blames government policy for that gulf, because the failure to lock down when Covid struck meant the UK economy suffered a bigger hit than other major countries.

The mistakes were fuelled by a lack of support for self-employed workers and those on insecure fixed-term contracts, who were allowed to “fall through the cracks”.

“Far from ​‘levelling up’, on this prime minister’s watch the families and places that were already poorest have fallen even further behind the rest of the country,” the left-of-centre think-tank concludes.

“The poorest families are even poorer now in real terms than the month of Johnson’s election victory,” it says, adding: “Worse still, the immediate outlook looks certain to deteriorate further.

“With prices expected to continue increasing, combined with the threat of a rise in interest rates and the continued effects of Brexit, things may well be about to get a lot tougher for those families that have already suffered most.”

The analysis – based on government data and forecasts from the Bank of England and the Office for Budget Responsibility – comes after the flagship levelling up hit fresh trouble.

A long-promised strategy document was delayed until the New Year, as it has hastily rewritten, and amid a likely Treasury refusal to stump up more cash.

Worryingly, for the government, the report highlights how the past two years have hit the wallets and purses of people in so-called ‘Red Wall’ areas the Tories won and must defend.

Disposable real incomes have risen by only £20 in the north-east at all since December 2019 and by small amounts in the north-west (£80) and Yorkshire (£90).

But, in London, they have gone up by more than £600 per year and by more than £550 in the south-east, the New Economic Foundations found.

Overall, the number of families living in poverty – defined as those with income below 60 per cent of the UK median before housing costs – has risen by 300,000 in two years.

Low-earners in sectors forced to shut down, such as hospitality, were hit hard – while white-collar high-earners in London and the south east were able to work from home, and save money on commuting.

The Office for Budget Responsibility, the independent forecaster, has warned the cost of living could rise at its fastest rate in 30 years, in 2022.

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