Living standards for all UK families are set to fall by 2030, with those on the lowest incomes declining twice as fast as middle and high earners, according to new data that raises serious questions about Keir Starmer’s pledge to make working people better off.
The grim economic analysis, produced by the respected Joseph Rowntree Foundation (JRF), comes before the chancellor, Rachel Reeves, makes her spring statement on Wednesday in which she will announce new cuts to public spending rather than increase borrowing or raise taxes, so as to keep within the government’s “iron clad” fiscal rules.
In December, the prime minister announced a series of new “milestones” that he said would be passed before the next general election, which is likely to be held in 2029. The first of these was “putting more money in the pockets of working people”.
But with many Labour MPs already deeply concerned over Reeves’s plan to raise about £5bn by cutting benefits, including for disabled people, evidence that living standards are on course to fall markedly under a Labour government – and to decline most for the least well off – will add to the mood of growing disquiet in party’s ranks.
The JRF analysis rests on a realistic assumption that the Office for Budget Responsibility (OBR) will adjust its forecasts in line with the Bank of England and other main forecasters when it makes them public on Wednesday. The OBR is expected to halve the expected growth rate for this year from 2% to about 1%.
In what it describes as a “dismal reality”, the JRF said its detailed analysis shows that the past year could mark a high point for living standards in this parliament. It concludes that the average family will be £1,400 worse off by 2030, representing a 3% fall in their disposable incomes. The lowest income families will be £900 a year worse off, amounting to a 6% fall in the amount they have to spend.
The JRF also said that if living standards have not recovered by 2030, Starmer will not only have failed to pass his No 1 milestone but will also have presided over the first government since 1955 to have seen a fall in living standards across a full parliament.
…
Alfie Stirling, director of insight and policy at JRF, said further cuts were not the way to reverse the trend of falling living standards. Instead, he argued, Reeves should consider raising tax for the wealthiest.
“There is no doubt the government is facing an unenviable list of economic pressures and uncertainties, ranging from the domestic to the international. But how you manage these risks is a matter of political choice…
“It is wrong, and ultimately counterproductive, to try and rebuild the public finances through cuts to disability benefits. Instead, government should be addressing hardship and raising living standards directly, as part of their strategy for growth.
“Fiscal pressures should be met through tax reform. There are a number of options to raise revenue from those with the broadest shoulders, while also supporting growth by removing perverse incentives in the tax system and staying within the government’s manifesto commitments.”
Earlier last week a group of leading economists wrote to the Financial Times warning that it would be a “profound mistake” for ministers to cut spending or investment, adding that “the UK cannot cut its way to growth”.
Yeah, suffocating the economy with austerity tends to do that.
So people have a choice when voting in the next general election.Red tories,blue tories or overtly racist tories.And i have a funny feeling the racist grifters are going to win.
In a couple of districts the greens have decent chances.
And at this point, the lib dems are actually further left than labour. I mean read their manifesto for last election, it’s far better than labour’s which is indeed basically tory lite.
They’ve seriously screwed the pooch. If the tough choices they are making now don’t pay off by the next General Election then Labour are out after a single term that just saw more austerity. This will result in further lurches to the right and the majority of the population will suffer because of it. Well played.
Well, it is possible that they’re getting all the bad stuff out of the way so they can see the results before the election.
I wonder if this is a bit of an overreaction to the recent cuts
The changes come after concerns that the bill for those on disability and long-term sickness benefits will hit £70bn by 2030, with the number of claimants rising from the current 2.8 million to 4 million.
Same thing happening in Australia
Federal assistance to people with disabilities rose from $61 billion in the 2022 financial year to $69.4 billion the following year and is forecast to rise to $78.3 billion this year.
It’s clear that if you have a disability benefits scheme then people will attempt to get on it, sick or not
And that won’t be possible if you are under 22, disabled or not. Even if estranged from parents.
The changes are about cutting money, not about clamping down on wrongly claimed benefits.
The changes are about cutting money, not about clamping down on wrongly claimed benefits.
Or giving people the help they need to get back into work.
https://www.bbc.co.uk/news/articles/c8j0dgym8w1o.amp
There it is.
Choosing to take from the worst off, to hand it to US based multinationals that already dodge paying their fair share of tax on their UK profits.
The whole established order needs to go, and the fascist “Reform” aren’t the answer either.
Damn, that needed it’s own post.
which tbf makes sense
UK debt projected to almost triple over next 50 years, watchdog warns
Can’t spend money you don’t have and the UK is already at 100% debt to gdp
the UK is already at 100% debt to gdp
That’s an irrelevant figure. Look instead at the cost of debt servicing. If interest rates are low, you’re OK having that level of debt. If they’re going up, you have potential problems in the near future.
And that costs money to train and help people. It doesn’t help that the country let covid run rampant across it, many got long covid and cannot work and the solution is to cut off their income rather than invest in science and treatment and help people get to a state where they can work.
Remember, the upturn in benefits came post covid and the budget tripling is a prediction based on them having no idea why it’s increasing and trying to graph a pattern. It won’t triple, that’s guess work. But they can use guess work to pull the wool over people’s eyes.
You’re an Aussie, why are you talking about UK tax. Are you Rupert Murdoch?!
many got long covid and cannot work and the solution is to cut off their income rather than invest in science and treatment and help people get to a state where they can work
But you’re broke and going broker, you can’t afford science and treatment, I’ve heard about the NHS being in a bad state for over a decade now, now if you were the worlds reserve currency like the USA then sure, turn on the money printer! but you’re not so… bit of a crappy situation to me!
If GDP and growth rises (by having more people working) then the budget can balance better and welfare can be increased
Maybe kicking everyone who thinks Brexit was a good idea in the shins might help move things along, wonder how many billions that has cost the UK
From my perspective it’s not about people or their disabilities, it’s simple economics, if you don’t have the money to provide the welfare but keep paying it out you can end up in a debt spiral or Argentina with 5000% inflation as the money printers are turned on to fund things when credit ratings are downgraded, is it really that surprising they are cutting back on spending?
Remember, the upturn in benefits came post covid
Can Labour Fix the Welfare System? - TLDR News https://www.youtube.com/watch?v=8n1aQph1UMo
My understanding is there is no real link between COVID and welfare payments with young people for example least impacted by COVID but the biggest increase is payments to them for anxiety:
Which Starmer is directly tackling:
Starmer’s welfare reforms will make it harder to claim payments for conditions such as anxiety https://www.telegraph.co.uk/news/2025/03/14/benefits-claims-minor-mental-health-problems/
More than half of the rise in working-age disability claims since the pandemic is related to mental health or behavioural conditions, according to official figures. Such conditions now account for almost 45 per cent of total claims.
I don’t think there’s a popular way out of this, you can’t increase payments or keep them going because you’ll go broke, every time you move something budget wise somebody is going to get upset
You’re an Aussie, why are you talking about UK tax. Are you Rupert Murdoch?!
A stinging rebuke to a guy that watched the NRL today on an illegal streaming website rather than paying a Murdoch owned streaming service 1 cent :\
To be honest there’s not enough content on Lemmy so I browse ‘all’ a lot and this came up
First point, Long Covid can cause mental health issues including anxiety and depression.
Secondly, there is money. The tax burden on the richest has dropped massively since the 50s and their effective tax rate is a lot lower. We could reverse that, but Starmer is a red Tory so wouldn’t consider it.
You never hear a government say "can we really afford these fighter jets or nuclear subs? Do they say there is no money left?Nope. They print money. To quote Tony Benn, if you can afford to kill people, you can afford to help people.
Finally, the NHS functioned well before the Tories took over. One of the most effective and cost efficient health systems in the world but as demand has increased due to an aging population the money available has frozen for it. We wasted a lot of money on covid for Tory business friends. Mismanagement doesn’t mean something doesn’t work.
Apologies on the Murdoch dig. Couldn’t resist it as it amused me. In reality, he’s spent a lot of money to persuade people to think just like you, so he would be proud. I can imagine that isn’t a nice thing.
In the post war years, Clement Atlee’s Labour spent massively with a higher debt to GDP and debt to GDP came down. Building homes and founding the NHS. It isn’t just the USA that can print money. I appreciate without this historical context and the media brainwashing that something with empirical evidence can seem impossible.
now if you were the worlds reserve currency like the USA
Could you quantify the economic benefit of that? Otherwise you’re just blowing smoke.
the economic benefit of being the worlds reserve currency?
Easier Borrowing: The United States can borrow money more easily and at lower interest rates due to the high global demand for dollars. This allows the U.S. government to issue bonds at a lower cost, reducing the expense of its substantial external debt 123.
https://chat.mistral.ai/chat/41b78032-5b3e-463c-9a65-8aa9fbba4e79
I wonder if this is a bit of an overreaction to the recent cuts
No, it’s a response to Labour imposing a financial straitjacket on themselves which means they can’t get money by raising taxes (on online gambling, on wealth, on Big Tech firms, etc, etc), so they have to scarpe some cash together by slashing spending. As the quote says at the end: “the UK cannot cut its way to growth”.
Btw, those three tax examples would not be stopped by the manifesto commitments on not raising income tax, national insurance, or VAT.
I think they also ruled out a wealth tax, but the other two for sure could be done. Now is the prefect time to raise a tax as well with the argument that we need to raise more money for defence as it turns out the USA is selling the rest of NATO down the river.
Labour imposing a financial straitjacket on themselves
I can see why they did this running up to the election, but it seems they have essentially sealed their fate by doing so.
Tory lite. The more people are poor, more people vote reform.
Sometimes it feels like the government is in charge of the MPs who are just pawns in their game. The MPs we voted in might finally be on our side now, but they still seem to have had no power to stop the government’s austerity.
Yeah I don’t get it.
The current government doesn’t even seem popular among the MPs that elected it.
