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Around 500,000 more people will be plunged into poverty by the end of the decade unless the Tory Government ends the benefits freeze.

The independent Joseph Rowntree Foundation has measured the impact of the four-year freeze and says the rising cost of essentials is hitting low-income family budgets hardest.

Poverty among working people has risen by 600,000 over the past decade to 3.7 million – almost one in eight workers.

As an increasing number of working families are using foodbanks to get by, Government policies will make the situation worse.

(Image: PA)

In 2020, a couple with two children getting Universal Credit will be £16 per week (£832 per year) worse off than if benefits had kept up with prices since 2010.

The foundation is also calling on the Government to tackle Britain’s productivity problem as higher productivity drives higher pay.

But in the UK productivity in low-wage sectors – such as retail and hospitality – lags behind the US, Germany, France and the Netherlands.

The research shows the economy is “highly uneven”, with as many as one in five workers reporting a lack of jobs or not being able to find a job with enough hours in areas such as Birmingham and Liverpool.

A prevalence of low-paid and insecure jobs is notable in Cumbria, the Humber and Lincolnshire.

Campbell Robb, chief executive of JRF, said: “The Government risks overseeing a living standards crisis.

"There is still time to fix this. Lift the freeze on benefits and tax credits to ease the strain on family budgets.”

He said the move should be given priority over raising the income tax personal allowance and he called for 80,000 affordable new homes a year.