The Great Debate UK

Inequality in the UK: the paradox under Labour

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Alastair Murid B0133P 0248-Ali Muriel is a Senior Research Economist at the Institute for Fiscal Studies. The views expressed are his own.-

Start with two (apparently contradictory) facts about income inequality in the UK:

1. Since coming to power in 1997, Labour has changed the tax and benefit system to make poor people better off, and rich people worse off.

2. The gap between rich and poor is now larger than when Labour came to power.

So Labour has acted to reduce inequality – and yet inequality has gone up. This presents us with something of a puzzle. Your first thought might be that one of the facts above simply isn’t true – that either Labour hasn’t redistributed as much as they claim, or the gap between rich and poor has been exaggerated – but we can illustrate both facts with simple charts.

Mandelson spares Byers’ blushes over Rover

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REUTERS– Neil Collins is a Reuters columnist. The views expressed are his own –

At the very least, it’s frightfully convenient for the British government to call in the Serious Fraud Office to look into MG Rover, a former carmaker. Whether there’s a shocking crime or not, it suits Peter Mandelson, the Business Secretary, to organise a further delay before this gory case is finally closed.

How pensions got lost in the post

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REUTERS

– Neil Collins is a Reuters columnist. The views expressed are his own –

Business Secretary Peter Mandelson has finally abandoned the idea of selling slices of the Royal Mail. It’s less than three weeks since his hapless Business Minister, Pat McFadden, had to defend the policy in the House of Commons but political reality necessitated this mercy killing.

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