Organisation says pace of cuts likely to intensify over next year and urges government to do more to tackle inequality
Poverty will become ever more entrenched in Britain if the government does not maintain social spending to protect the most vulnerable, the Organisation of Economic and Social Development has warned.
The Paris-based organisation said austerity measures and benefits cuts were more likely to hurt the poor in the UK than in most other OECD countries because its benefits system is more strongly targeted at low income groups. The pace of cuts will intensify between now and 2015, the OECD noted in its "society at a glance 2014" report.
A rise in youth unemployment and poverty in recent years also suggested the government needed to do more to help young people leaving education, the organisation said.
"The government has already implemented certain strategies for youth not in employment, education or training (NEET). Such programmes will need to be maintained and developed for the foreseeable future as high NEET rates persist."
All member countries were urged to take action to tackle rising inequality and social divisions. Angel Gurría, OECD secretary general, said: "The economic recovery alone will not be enough to heal the social divisions and help the hardest-hit bounce back. Governments need to put in place more effective social policies to help their citizens deal with future crises. They also need to avoid complacency and persevere in their reform efforts as the recovery takes hold."
There are 48 million people looking for work in OECD countries, 15 million more than in September 2007.
The number of people living in households without any income from work has doubled in Greece, Ireland and Spain since the onset of the crisis, and risen by 20% or more in Estonia, Italy, Latvia, Portugal, Slovenia and the United States. Poorer households have lost greater shares of their incomes than the better-off .
The OECD warned there was risk that as the UK government rolls out its Universal Credit scheme and efforts to "make work pay", policies to stabilise incomes, such as child and working tax credits, should be considered.
It added: "Experience from earlier recessions suggests that there is a risk that many families could remain partly or fully dependent on benefits for extended periods of time.
"Freezing or capping benefit levels and changing the way benefits are adjusted over time means that living standards of people more dependent on benefits will fall relative to the rest of the population. This might entrench poverty for families who depend on income support."
While overall unemployment rates in Britain have been lower in recent years compared with other crisis hit countries, Britain recorded the fourth biggest rise among OECD countries in the proportion of people forced to take part-time work when they would prefer to work more, and wages have fallen faster than in other countries, the OECD said.
Average annual household disposable incomes fell to £19,900 in the UK last year from a pre-crisis level of £20,400. Over the same period average disposable incomes were flat in both the European Union and OECD at $22,900 and $23,100 respectively.
Relative poverty rates have fallen in the UK however to 10% from 11.3%, but rose slightly in the EU and OECD.
AusterityPovertyOECDEconomic recoveryBenefitsEuropean UnionYoung peopleEconomic growth (GDP)Global economyEconomic policyUnemploymentAngela Monaghantheguardian.com © 2014 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds |
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