Wealth and regional inequality have worsened since 2019, with single parents in the North worst affected

There are 300,000 more families living in poverty now than there were in December 2019, according to new research from the New Economics Foundation

The rich have gotten richer during the pandemic, while the poorest families have seen their disposable income drop, with those in the North of England worst affected, according to a think tank.

Greater Manchester mayor Andy Burnham welcomed the research, saying it shows that the “North-South divide has grown even wider” since the 2019 general election.

At a glance: 5 key points

  • Analysis by the New Economics Foundation (NEF) has found that the top 5% of families have increased their wealth by £3,300 per year since 2019, compared with a drop of £110 among the poorest 50% of families
  • Their research also shows that there are now 300,000 more families living in poverty in December 2021 than there were in 2019
  • Single parent families have been worst impacted, particularly in the North of England, with average losses of more than £200 per year in Yorkshire and the Humber and the north-west and Merseyside, compared with small gains in the south-east and south-west
  • NEF says the income gap across regions has widened since 2019, with incomes in the north-east, north-west, Merseyside and in Yorkshire and Humber all increasing by 0.3% or less, compared with 1.3% in London and 1.1% in the south-east
  • Families in the top 50% of disposable incomes have seen their living standards improve across the board, though fastest in London and the south-east. Meanwhile families in the poorest 50% have seen incomes fall everywhere except for London and eastern England.

What’s been said?

Sharing a graph from the research on Twitter, Greater Manchester mayor Andy Burnham said it showed “the story of the pandemic in one slide”.

He said: “The bottom half have got poorer while the top half have got richer (some a lot).

“And the North-South divide has grown ever wider.”

Alfie Stirling, director of research and chief economist at NEF, said: “These results show that the government’s handling of the pandemic has led to the richest families and regions getting richer, while the poorest families are even poorer. 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.

“In the long run, any agenda to tackle these issues needs to grasp the fundamental drivers of regional inequalities for places, people, and industry. But in the short term, more should be done to help families through the social security system. NEF’s proposal for a Living Income would ensure an income floor that reflects the true cost of living for families.”

Dominic Caddick, assistant researcher at NEF, said: “Far from 'leveling up’, on this prime minister’s watch the families and places that were already poorest have fallen even further behind the rest of the country. This would be an indictment on any government, let alone one where the promise to ​“level up” sits at the heart of its political and policy agenda.

“This analysis exposes the vulnerability of the UK’s current safety net in responding to real world change. We need a bold reimagining of income support: NEF’s argument for a Living Income would help people deal with the challenges and opportunities presented by the fast-changing economy we’re all living in.”