BRITAIN’S child poverty crisis shows no signs of ending as the country’s wealth gap grows even wider with the poor “bearing the brunt” of benefit cuts, economists warned yesterday.

New research published by the Institute for Fiscal Studies (IFS) and the Joseph Rowntree Foundation (JRF) revealed that poorer households were now facing five years of zero growth in incomes, while Britain’s highest earners will enjoy a wealth growth of 2.3 per cent a year above inflation. 

The report’s author James Browne said: “Following an historically slow recovery in living standards after the recession, stronger growth in household incomes at all income levels over the last two years will have been welcome news. 

“For some, particularly the better off and pensioners, this is likely to continue over the next five years as earnings and state pensions grow more quickly than inflation. 

“But the prospects are not so good for others, including large families with low incomes, who will bear the brunt of planned benefit cuts.”

While the report noted that 400,000 children were lifted above the absolute poverty line in 2014-15, the Tory government’s planned cuts to benefits and tax credits will see 2.6 million children living in absolute poverty by 2020-21 — a rise of three percentage points.

Analysts added that while the increase in the minimum wage will affect some of Britain’s lowest earners, it will “have very little impact on official measures of poverty or household income inequality in 2020-21.”

Labour’s shadow chancellor John McDonnell said the report proved that George Osborne’s lauded recovery was “truly built on sand.”

He said: “When you read through the detail of this report, the alarming figures are that by the end of this Tory government one in four children will be living in relative poverty with a rise to 2.6 million of children in absolute poverty.

“As the report clearly states, the government’s planned tax and benefit changes are a major reason for these rises in relative and absolute poverty over the next five years.

“This report should shame the Chancellor — it’s Tory policies that will drive up child poverty over this parliament.”

Child Poverty Action Group director of policy Imran Hussain said: “The Prime Minister has promised an all-out assault on poverty but we’re facing a full-blown child poverty crisis as a result of government tax and benefit policy  choices which have prioritised tax cuts for richer groups rather than help for low-income families.”