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Page last updated at 08:28 GMT, Tuesday, 11 October 2011 09:28 UK

Families 'will see biggest fall in living standards since 1970s'


Middle-income families are set to see the biggest fall in their living standards since the 1970s, according to a new report. The Institute for Fiscal Studies estimates the stagnating economy will also push a further 600,000 children into poverty.

Speaking on the programme the business minister David Willetts said the government is trying its best to improve the situation.

"We've tried to hold down fuel duty, six pence. We're freezing council tax. We've increased the income tax allowance. We've tried to do the things that help. But you can't ignore the basic rules of economics that when you inherit a situation where an economy has shrunk by 7%, the money isn't there," he told presenter John Humphrys.

But Labour peer Maurice Glasman said the reason for increasing poverty in the UK goes back beyond the recession. "There's real evidence that the median income has been squeezed, certainly outside the south-east since 2003. There's a lack of robust private sector growth in the regions of the country," he explained.

"I think that's a real problem. And there's been a lack of attention to vocational training; there's been a real lack of attention to regional growth."

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