A story missed by most of the media ...

 http://news.independent.co.uk/uk/politics/story.jsp?story=405436

Poverty levels have grown under Labour
By Paul Waugh, Deputy Political Editor

12 May 2003

The gap between rich and poor in Britain is at its largest in 13 years and poverty levels under Tony Blair exceed those under Margaret Thatcher, government statistics reveal.

Figures from the Office for National Statistics for income inequality show that differences in disposable, post-tax income at the top and bottom of society have returned to levels last seen in 1990.

The Tories and Liberal Democrats seized on the figures in a report from the department, claiming they exposed the emptiness of the Government's rhetoric on tackling so-called high-earning "fat cats".

The report shows that the "Gini coefficient", an international measure of inequality, has increased from an average of 29 points under Baroness Thatcher to 35 points under Mr Blair. The figure for 2001-02 was 36 points.

The gap between rich and poor, which was relatively static in the early Tory years, soared in the late 1980s and then declined slightly through the early 1990s. It began an upward trend in 1995 and continued to rise under Labour, which came to power in 1997.

The latest figures show that inequality under Labour is, on average, a sixth higher than the equivalent average under the 11-year Thatcher government and 10 per cent higher than the Conservatives' 18-year rule as a whole.

The Office for National Statistics said that fast-rising wages, in contrast with slow-rising state benefits, were one of the reasons behind the widening gap. Gordon Brown, the Chancellor, announced in the Budget on 9 April that he was commissioning a review of policies aimed at cutting child poverty amid indications that important targets were in danger of being missed.

Labour has set a target of cutting the number of children in poor households, defined as 60 per cent of median income, by a quarter by 2004-05. The party wants to eradicate the problem by 2020. Despite promising to take one million children out of poverty in its first term, the Government managed to reduce the number by 500,000.

The National Council for One Parent Families has also warned that the targets will continue to be missed unless the national minimum wage is substantially increased and the child tax credit increased by £13 a week.

Critics claim that the Prime Minister has consistently shied away from expressing unease about the gap between rich and poor because he does not want to be seen as attacking high earners.

David Willetts, the shadow Work and Pensions Secretary, said that the figures from the Office for National Statistics exposed the deep problems the Government was having in tackling poverty overall.

"This devastating evidence shows that Labour are not making progress in cutting poverty. It cannot help that Gordon Brown's complicated tax credits are putting people off claiming benefits due to them," he said.

Maurice Fitzpatrick, head of economics at Numerica, a business services group, said it was clear that under the Labour Government, inequality of disposable income had increased. "It has gone up both in absolute terms and in terms of average inequality as compared to the situation under the Conservatives," he said. "Many people might find this surprising, given Labour's commitment to redistributing income via the tax and benefits system. These figures may not make welcome reading for Gordon Brown."

Steve Webb, the Liberal Democrat spokesman on work and pensions, said that the figures proved the need for a "super-tax" on higher earners. A tax rate of 50 per cent on those with incomes over £100,000 could raise billions to combat poverty, he said.

"This just shows how empty the Government's rhetoric is. Of course, under Margaret Thatcher's first nine years, there was a top tax rate of 60 per cent," he said. "Tackling poverty takes serious money and serious money is needed."