The study revealed UK regional growth to be among the lowest in Europe (Image: Getty)
Parts of the UK are more poverty-stricken than the poorest parts of Slovenia and , new research has revealed. A report published by the National Institute of Economic and Social Research (NIESR) has documented a worrying decline in the country’s living standards over the last two decades.
Despite remaining the world’s sixth-biggest , the UK has yet to fully recover from the 2008 financial crisis, the report suggested, with a disparity between high and low income areas widening over the 16 years since. Poor neighbourhoods in areas including the West Midlands are now worse off than their counterparts in countries like Slovenia and Malta, the NIESR said, due to nearly two decades of stagnated living standards.
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The West Midlands are among the regions seeing living standards fall below countries like Slovenia (Image: Getty)
The data also showed the UK to be the only G7 nation that hasn’t brought living standards up to pre-pandemic levels, with the average disposable income of a household 1.2% lower in the second quarter of 2023 compared to four years prior.
The study also revealed that UK regional growth is among the slowest in Europe. It also boasts some of the least generous welfare spending in the Organisation for Economic Co-operation and Development (OECD) and loses around £4,300 to weak productivity each year.
Author and senior economist Max Mosley said: “The last 10 years are the first time in over half a century where real incomes did not grow by a meaningful amount. Not only is this arguably an extraordinary trend, but it has deep implications for people’s living standards.
“Little to no real income growth means exacerbating regional inequalities and a weakened ability to withstand economic shocks, the like of which we saw frequently in recent years,” he added. “That the poorest in our country now fare worse than those in nations once considered less affluent is a stark indictment of the UK’s economic social model.”
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Chancellor Rachel Reeves has pledged to boost the country’s productivity by cutting red tape and increasing public investment while tackling a £22 billion “black hole” reportedly passed on by the .
After Reeves announced £40 billion worth of tax rises in her October budget – stoking the ire of everyone from pensioners to farmers – she will return to the dispatch box to unveil plans to “review” UK spending in the Spring Statement on March 26.
The NIESR suggested that the most impactful ways the Government could tackle poverty would be cutting VAT rates, benefitting low-income households who spend a larger percentage of income on essential items, and removing the two-child limit for additional welfare benefits – a policy that has become a totemic issue for Labour, stoking divisions on the backbench.