The National Institute of Economic and Social Research argues, in its latest review, that recent coalition policies are likely to result in “further rise in income inequality”. 

According to the review, the government’s radical proposals are making social mobility difficult for young people.

A government spokesman for the department for work and pensions claimed that the reforms would have a “dynamic impact on some of the poorest families” in the UK, as they would encourage people “into work, many for the first time", which would allegedly improve "the life chances of children at an early age”.

Jonathan Portes, director of the research and former chief economist at the Cabinet Office, however, believes that such policy appears to be moving the UK backwards rather than forwards.

He argues that, rather than reducing the funding for pre-school children, that money for such education should be a “priority to reduce educational underperformance among more disadvantaged groups”.

Mr Portes also sees the abolition of what is known as “education maintenance allowance”, the payment of students to stay on for further education at school or college, as a similarly regressive move.

There was "strong evidence that it significantly increased staying-on rates and attainment", Mr Portes said. "This change is likely to have a negative impact on social mobility”. 

The review compares the coalition's actions to Labour’s term in office, which it sees as being characterised by “a much more progressive tax and benefit system”.