Redistribution for the rich – New Labour’s success story

Yes, that’s a sarcastic title.

And it’s the lowest form of wit, I know.

But who can laugh at this?

Report shows the rich getting richer
22/01/2008

A Labour friendly think-tank, the Institute for Fiscal Studies, has produced two damning reports which expose New Labour’s failure to address issues of poverty and inequality.
In Poverty and Inequality in the UK: 2007 the IFS find that the number of people living in relative poverty (living in households with less than 60% of median incomes – that is less than £363 per week disposable income) rose from 12.1 million in 2004/05 to 12.8 million in 2005/06 (the last available figures).

Despite Labour promises, these figures show a rise in child poverty and working adult poverty.

The second report, published last week, called Racing Away: Income Inequality and the Evolution of High Incomes suggests that inequality is higher today than at anytime during the present Labour or proceeding Tory administrations.

Inequality is measured using the “gini coefficient.” It gives a measure as a single number between 0 and 1. The closer to 0 a country scores the greater the levels of equality; the closer to 1 the country scores the greater the inequality.

In 1979 Britain’s score was 0.25. During the 1980s inequality grew sharply, reaching a peak in the early 1990s at 0.34. This was a rise in inequality without historical parallel. There was a slight fall in the inequality measure between the early and mid-1990s, but it rose again during the early New Labour years (reaching a peak in 200/2001 of 0.35). Although there was a slight drop in the inequality score after this, it has now gone back up to 0.35 – a higher level of inequality than when Labour came to office in 1997.

Under New Labour the top 10 per cent of earners now take home 40 per cent of all earned income in Britain, while the top 0.1% have an average pre-tax income of £780,000 (the average pre-tax income for the UK is £25,000).

Since New Labour came to power in 1997 the average income of the top 10 per cent of earners has grown faster than any other group in society. Meanwhile, the average income of the lowest 15 per cent has grown at a slower rate than that of any other group.

So there you have it. Under New Labour the rich get richer and richer, and the poor fall further and further behind.

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