The party of inequality
June 27, 2009Posted by on
Britain under Gordon Brown is a more unequal country than at any time since modern records began in the early 1960s, after the incomes of the poor fell and those of the rich rose in the three years after the 2005 general election. So reported The Guardian on Friday 8 May 2009. Fortunately for New Labour and Gordon Brown, The Telegraph had broken the story on MPs expenses. From this point on, any other reports about the systemic failures of the New Labour administration were lost amongst the chaff of the expenses furore.
The Guardian reported that deprivation and inequality in the UK rose for a third successive year in 2007-08, according to data from the Department for Work and Pensions that prompted strong criticism from campaign groups for the government’s backsliding on its anti-poverty goals. The government failed to make a dent in the number of children or pensioners living in poverty after big increases the previous year. Almost 17,000 more children in England are on free school meals this year compared with last, according to government data also published yesterday.
About 15% of pupils in state schools are now entitled to free school meals because their parents receive welfare payments or earn below £15,575 a year, the figures show. Last year, 14.5% of pupils were eligible. Even before the onset of the UK’s deepest recession in a generation, official figures showed that only the better-off families were spared from a squeeze on living standards that saw median income virtually unchanged and fresh cuts in real pay for those on the lowest salaries.
The Guardian report notes that since Tony Blair’s third election victory, the poorest 10% of households have seen weekly incomes fall by £9 a week to £147 once inflation is accounted for, while those in the richest 10% of homes have enjoyed a £45 a week increase to £1,033. The data shows that the second poorest 10% of households has also had to make do with less since 2005. Overall, the poorest 20% saw real income fall by 2.6% in the three years to 2007-08, while those in the top fifth of the income distribution enjoyed a rise of 3.3%. As a result, income inequality at the end of Labour’s 11th year in power was higher than at any time during Margaret Thatcher’s premiership.
Further; the Institute for Fiscal Studies, Britain’s leading think tank on tax and benefits, reported that the increase in poverty in 2007-08 was due to weak income growth for the low paid. Rising inflation had also eroded the real value of state benefits and tax credits. Meanwhile, the number of working adults living below the official breadline rose by 300,000 to 11 million, with childless adults the worst affected. With financial help from the state concentrated on pensioners and the young, one in seven working-age adults without dependent children are now living in poverty – the highest ever level. The IFS said the government had reduced child poverty by 16% and would need to spend £4.2bn a year to hit its 2010 target, but had allocated only £200m in last month’s budget. “Given the state of the public finances, it seems unlikely that the government will find the remaining £4bn needed in the 2009 pre-budget report”.