Sunday, September 23, 2012

Britons living standards set to deteriorate in future

Source: Press TV

A new analysis of deepening income inequality in Britain has found that rich will become richer and the poor become poorer amid plans to enforce £10 billion welfare cuts.

The study, commissioned by the Institute for Fiscal Studies (IFS) and the Institute for Employment Research, for the Resolution Foundation found that low- and middle-income families will have their living standards slashed until 2020, even if the country faces a constant economic growth.

According to the findings, even a boom in future of the UK’s economy will not be able to cover the widening gap in the British society although the government is urged to drop its austerity policy.

Meanwhile, a plan by the chancellor, George Osborne, to slash a further £10 billion from the welfare budget by 2016 is being viewed as a declaration of war against the poor.

The results show net income of low-income households will fall by 15 percent by 2020, which is down from £10,600 (at 2009 prices) to just £9,000 at the end of the decade (again at 2009 prices).

This is while middle income families will also have their income slashed by three percent from £22,900 in 2009 to £22,100 in 2020.

On the contrary, rich and affluent families will have their living standards of living grow by 0.2 percent a year to 2020. This growth would be faster for the most affluent.

Professor Mike Brewer, research fellow at the IFS, said all the signs were that with current government policies the trend would be strongly against income growth for the bottom half of households.

"This analysis confirms the strong currents that will be pushing against income growth in the next 10 years, even once a recovery in GDP takes hold," he said.

"Britain looks likely to see continuing polarisation in our labour market as more high-and low-paid jobs are created, skewing the distribution of income growth towards higher income households,” he said.

"Meanwhile, support through the tax and benefit system is set to fall over the long-term, meaning that lower income households will tend to fall behind,” Professor Brewer added


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