The United Nations global poverty expert, Philip Alston, has warned that Britain’s preoccupation with Brexit will leave the country severely diminished whether or not it leaves the EU because too little is being done to alter policies driving people deeper into poverty.

The eminent New York-based human rights lawyer, who is in the final year of his term as the UN rapporteur on extreme poverty, said on Tuesday: “You are really screwing yourselves royally for the future by producing a substandard workforce and children that are malnourished.”

Alston said he had already delivered a detailed 11,000-word report to the UK government about extreme poverty in the UK after a two-week fact-finding mission in November. It will be published this month and he predicted it would make even “less palatable” reading than his initial conclusions that ministers were responsible for inflicting “great misery” with “punitive, mean-spirited, and often callous” austerity policies. It sets up a fresh clash with the Conservative government over their policies towards the poorest millions in society on the eve of the European parliament elections.

Last autumn the work and pensions secretary, Amber Rudd, attacked Alston’s tone as “highly inappropriate”, to which Alston responded she should take action rather than criticise.

Speaking before a speech at a Guardian Live event in central London on Tuesday, Alston said that since he came to study the UK after an invitation from the British government, “the extent of the social problems and their trajectory indicates things are going badly”.

He and his team have been tracking developments in Britain, including the government’s own data that shows absolute poverty among children is rising, inequality has jumped, food bank usage has reached record highs, including a 19% rise in 2018, and knife crime is widespread.

“Brexit has been an almighty distraction and those who are really worried about the future of Britain should be looking more at social policy than Brexit because that’s where the future is being decided,” he said. “It is like a husband and wife arguing furiously and endlessly over what sort of car to buy but meanwhile they are letting the house fall apart, they are losing contact with the people to whose houses they would be driving, the picnic places they would have wanted to go to are being sold up and by the time they make their decision, they are going to have lost so much that either result is going to be hollow – whether leave or remain.”

But he also criticised the opposition, saying he considered it “a missed opportunity for the Labour party not to be pursuing these issues, because clearly behind a lot of the Brexit debate is a concern about economic security and the way the country is going”.

“What is most striking about the UK case is how deliberate it has been,” he said. “This is a test tube case. [In 2010] they went for the ideology of austerity. What they are trying to engineer is the simple message that you wouldn’t want to be on welfare. It is going to be very unpleasant, and you will find yourself wanting to do almost anything else rather than going through it.”

He said comments that austerity had ended, something Theresa May claimed last October, were “inconsistent and incomprehensible”.

“Perhaps they mean the lift on the cap of benefits, but that is not what austerity is about,” he said. “Austerity is this whole range of policies that have comprehensively been put in place and will not be touched by any moves this government will make.”

He concluded: “No one can convince me that all of the stabbings, the suicides, the violence in Northern Ireland is unrelated to austerity. As these things fester and get worse, what you are doing is developing a Britain, post the Brexit decision whichever way it goes, which will be a diminished Britain.”

