At Scawthorpe Community Playgroup in Doncaster, a group of toddlers hurl themselves at a formidable collection of plastic toys.
The children have been born in the sixth largest economy on the planet.
Britain is a rich nation, but its wealth is unevenly shared and life on a low income is hard.
“By the time you’ve paid all your bills, you’ve got nothing left,” Gabbi Lumsden said.
Gabbi is sitting with Becky Hall.
The two of them have been friends since primary school.
Between them they have six children, five of whom tumble around the community hall while we chat.Gabbi and Becky are both single mothers and both rely on benefits.
Benefits which don’t always cover the bare essentials.
“As a mum, you eat one meal a day,” reveals Gabbi with a surprising grin. “As long as your kids get fed, you’re alright."
The UK economy has been crawling along for the best part of 15 years and the result is stagnating pay, over-stretched public services and a sharp increase in the number of people who are struggling financially.
Low growth is not a uniquely British problem, but new analysis by the National Institute of Economic and Social Research (NIESR) reveals that the living standards of households in the poorest parts of the UK are lagging behind their counterparts in many other countries.
Wages and benefits in the UK may seem high on paper, but NIESR has compared disposable incomes and made adjustments for purchasing power - which takes into account what people can actually buy for their money.
The conclusion is blunt:
The lowest 10% of earners in the UK - roughly three million households - are more than £3000 a year worse off than the poorest households in Germany and £1500 a year worse off than the lowest earners in France.
They are now also poorer than people in the poorest parts of Slovenia (where average disposable income is almost £900 a year higher), Malta (£1000 higher) and Ireland (£2300 higher).
Britain is being caught up and overtaken
“That’s exactly the evidence that I’m seeing,” Janice Jinks said.
Janice’s playgroup is run by volunteers and charges £1.50 a session but you get the sense she’d never turn anyone away.
She was awarded an MBE in last year’s King’s Birthday Honours for her work supporting families in Doncaster.
“Society should not be in this position where there is so much deprivation,” she tells us. “30 years ago, you never heard of food banks. Now they’re everywhere and many of the people using them have jobs."
According to NIESR, a key factor driving down the living standards of those on the lowest incomes is the changes that have been made to the benefits system since 2010.
The research suggests Universal Credit doesn’t cover basic living costs and that, for many years, there has been a significant gap between the rents private landlords charge and housing benefit.
The government is considering further cuts to a welfare budget that NIESR argues isn’t generous, by European standards, currently.
“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,” Max Mosley, Senior Economist and main author of the report, said.
“The uncomfortable truth our report has uncovered is that economic stagnation over the past decade is now threatening the UK’s position as a place for a high standard of living."
While parts of the UK are among the richest in Europe, living standards in regions outside London and the South of England are falling behind.
The big problem is pay
In the decades running up to the financial crisis, the UK experienced strong and sustained wage growth.
But since 2008, pay packets, adjusted for inflation, have stopped rising.
NIESR calculates that had wage growth continued in line with the pre-2008 trend, the average worker in the UK would be earning £12,000 more per year today.
The analysis concludes that while there was a general slowdown in wage growth across the world 15 years ago, the UK slowdown has been more prolonged.
Last summer, the government was elected on a promise to reverse the decline.
Mosley supports the chancellor’s strategy of seeking to increase investment by government and private companies, and reform of the planning system, but says there is a need for boldness and urgency.
“Over the last eight or ten years, we’ve seen a general slowdown in the investment in the economy and that chimes with weaker productivity, weaker growth and weaker pay packets,” Moseley says.
“The planning system is one of the big constraints that's put on growth. When a company wants to expand, we should let them do so because that means a better standard of living and better wages for people.”
An HM Treasury spokesperson told ITV News: “This Government inherited the worst living standards growth since ONS records began but we are clear that getting more money in people’s pockets is the number one mission in our Plan for Change.
“Since the General Election, there have been three interest rate cuts, we have increased the National Living Wage by a record amount, real wages are rising at the highest level in six months, the Triple Lock on pensions means that millions will see their state pension rise by up to £1,900 this parliament and working people’s payslips have been protected from high taxes.”
The government has backed airport expansion as a means of generating economic activity.
In Doncaster, the city council is using £100m of taxpayer money to reopen the city’s airport.
The Programme Director, Christian Foster, showed me round the terminal building which was mothballed in November 2022 when the airport closed.
At check-in, posters advertising Covid tests sit alongside the logos of TUI and Wizz.
The hope is that both airlines can be lured back.
This is a risk. The council is investing huge sums of taxpayers' money in the project, which the private sector has been unwilling to support.
The airports' former owner, Peel Group, operates Liverpool John Lennon airport. Peel shut down Doncaster because it decided it wasn’t viable.
“This is a valuable asset, in the right place, it will work,” insists Foster, citing a study by Ernst & Young which points out that Munich Airport International group is acting as consultant.
“[Munich is] operating an airport that handles 40 million passengers a year and 400,000 tonnes of freight. They know what they are doing,” he told us.
If the council’s gamble pays off, then this project will create up to 12,000 jobs, in aviation, tourism, retail, engineering and logistics.
In anticipation of the reopening, a private company, Panattoni, has built a 420,000 square foot warehouse opposite the airport and made it available for rent.
Doncaster has experienced economic booms before.
The age of coal and steam is long-gone and the digital age has begun.
Doncaster, like the rest of Britain, is rebuilding and hoping to adapt and prosper.
ITV News
Archive (March 13 2025)
