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A decade of austerity cuts and welfare reforms instigated by the UK Government have contributed to more children in working households in Wales living in poverty, a new Welsh Government report published today shows.

First published:
10 December 2019
Last updated:

This was published under the 2016 to 2021 administration of the Welsh Government

The report about the Welsh Government’s progress in implementing its Child Poverty Strategy shows Welsh Ministers’ actions to create a strong economy and tackle worklessness, improve skills, tackle inequalities and increase household income are all making a difference in mitigating the impact of poverty.

But it shows the Welsh Government’s ability to prevent a rise in overall levels of child poverty, in the face of actions and policy choices by the UK Government, coupled with the prevalence of insecure and low paid work, has been limited.

The analysis of the Family Resource Survey (2015-16 to 2017-18) shows there are more children living in relative income poverty in working households than there are in workless households – 67% of children living in relative income poverty are in households where at least one person is working. As a result, 29% of children in Wales live in poverty.

The report says this is largely because of UK Government austerity cuts and reforms to tax and welfare policies, such as universal credit, the benefit freeze and the two child cap. Single working parent households are particularly susceptible to poverty.

The Welsh Government continues to take clear and decisive action to tackle poverty, by helping create jobs and economic growth, and helping people deal with the cost of living, by putting more money back into their pockets.

Wales is maintaining an employment rate well above its historical average, with more than 263,000 more people in work since 1999. The number of workless households in Wales has fallen more than 18%, from 223,000 to 182,000, since devolution and the number of children living in workless households has fallen from 100,600 in 2010 (18.8%) to 68,700 in 2018 (12.6%).

Welsh Government policies and initiatives such as free prescriptions, free school meals, the education maintenance allowance (EMA) and a generous childcare offer, means some Welsh families are more than £2,000 a year better off.

Minister for Housing and Local Government, Julie James, who has responsibility for co-ordinating Welsh Government action to tackle child poverty said:

We have always made tackling child poverty a priority and we have made significant resources available to help those children and families most in need.

We have seen a near 20% drop in the number of workless households in Wales – a clear demonstration our economic policies are delivering for the people of Wales. As well as helping tens of thousands into work, we are supporting families with the costs of day to day life, by putting up to £2,000 a year back in people’s pockets, through policies such as free prescriptions, the childcare offer and many other policies, which help people make ends meet in these toughest of times.

But despite the progress we have made, this report shows just how much more there is to do. But it also shows that many of the most important levers to lift children and families out of poverty are not in our hands.

As a UN report recently highlighted, a decade of UK Government-driven austerity, and tax and welfare reforms, have landed most damagingly on those who are least able to manage. In addition, we are already feeling the repercussions of our decision to leave the European Union and expect to see levels of poverty in Wales increase as a result.

For many people work alone is not enough to lift families out of poverty. This is largely due to a combination of the impact of UK Government-driven austerity cuts and tax and welfare reforms combined with the rise in insecure, low paid work in recent years.

We want to see child poverty reducing – not increasing. But these figures are a reflection of the policies of inequality which have been allowed to develop over the last decade by the UK Government. We will continue to do everything we can to tackle poverty and its toxic effects.