Poor worse, rich better off since Boris Johnson became prime minister – study
The poorest 50% of UK families are an average of £110 worse off a year since the general election in 2019, while the richest 5% have gotten richer by £3,300 a year, according to a new analysis from the New Economics Foundation (NEF).
There are 300,000 more families living in poverty in December 2021 compared with 2019.
NEF has called the government's "levelling up" agenda into doubt as incomes in London and the south east of England have risen six times faster since 2019 than in "red wall" regions — constituencies mainly in the Midlands, northern England and north east Wales which historically tended to support the Labour party.
The income gap across UK regions has widened, with areas along the red wall worst affected.
Single parents were the worst hit, with single parent families in Yorkshire and the Humber and the north-west and Merseyside seeing their incomes drop by around 15 times as much as in London.
Single pensioners were the next hardest hit, seeing a fall in average real income across eight of the UK’s 12 regions and nations. Pensioners in Wales were the worst off, experiencing a drop in disposable income of around £170 per year in real terms.
Families in the poorest 50% have seen incomes fall everywhere except for London and eastern England.
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Meanwhile, families in the top 50% of disposable incomes have seen their living standards improve across the country, though the fastest improvement have been seen in London and the south east.
Incomes in the north-east have risen by less than £20 a year, a rise of just 0.1%.
In the north-west and Merseyside incomes have increased by just 0.2% in the last two years — an average of £80 a year.
Yorkshire and the Humber and Northern Ireland have both experienced a 0.3% rise of £90 a year.
This is compared to income gains of more than £600 a year in London, a 1.3% rise, and £550 in the south east of England.
The NEF said this "sharp increase in inequality has been driven by the government’s pandemic response, which has more recently left poorer families exposed to global price rises and inflation".
The think tank pointed to the design of emergency COVID-19 measures which resulted in less support, on average, for the poorest.
While the furlough scheme protected millions of jobs, those with less secure employment were less likely to receive any support and the universal credit uplift was much less generous than top-ups seen in other in other countries, while people on legacy benefits saw no increase at all, according to the NEF.
"Insufficient support for those relying on these systems during the pandemic, and particularly since the withdrawal of the £20 uplift, has left the poorest families in the UK almost uniquely exposed to global price rises — particularly fuel and energy — this winter," the report said.
"With prices expected to continue increasing, the threat of a rise in interest rates and ongoing effects of Brexit, things could get a lot tougher for families that have already suffered most," said Alfie Stirling, director of research and chief economist at the NEF.
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The NEF is calling on the government to do more to help families in the short-term, such as introducing a minimum income floor which better reflects the true cost of living.
The cost of living in the UK has been rising steadily this year, with inflation increasing from 0.4% to a 10-year high of 4.2% in October.
There have been mounting concerns about increasing prices in the UK during the past month, due to rising inflation.
Prices in shops rose by 0.3% in November 2021 for the first time since May 2019, according to figures from the British Retail Consortium (BRC) and data provider Nielsen.
A Department for Levelling Up, Housing and Communities spokesperson told Yahoo Finance: “This government’s central mission is to level up every part of the United Kingdom by spreading opportunity, empowering local leaders and improving public services."
In the long run, the NEF is calling for more green jobs across the country, the diversification of company ownership models and a fairer distribution of the spread of wealth, including via a more progressive tax system.
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“In addition to the £4.8bn Levelling Up Fund, we’re providing record investment in infrastructure worth over £96 billion, £12bn in affordable housing and a £2.6bn Shared Prosperity Fund to help rebalance opportunity across the UK.
“We are widening access to new jobs — 56,000 just this year — and we’re building on that through a £200 million boost to communities to help build skills. The forthcoming Levelling Up White Paper will set out how we will further improve opportunity and livelihoods across the country as we recover from the pandemic.”