Labour’s “Robin Hood” legacy

Green Politics

Today's papers cover in detail the distributional impact of thirteen years of Labour rule. The picture represents a clear progressive redistribution.

Today’s papers cover in detail analysis by the Institute for Fiscal Studies on the distributional impact of thirteen years of Labour rule. The picture is stunning and represents a clear progressive redistribution from rich to poor with those earning over £100,000 paying the most.

Newspaper reaction is unsurprisingly along partisan lines. The Guardian broadly praise the redistribution with a piece titled, “Labour’s tax and benefits strategy has closed the income gap, thinktank says”:

“The poorest 10% of households gained by 13% while at the same time the richest 10% saw their incomes cut by almost 9%. When households earning more than £100,000 were treated as a separate category, the figures showed they faced tax rises that cut their incomes by 15%…

“According to the IFS, middle income groups have neither gained nor lost from tax and benefit changes over the 13 years. Most rightwing commentators described the budget as the last in a long line of attacks on middle income earners. But the IFS figures show that while households in the higher income groups lose out compared with lower income groups, the effects are only marginal.”

Sean O’Grady in The Independent writes:

“The richest households in Britain are about £25,000 a year worse off as a result of changes to the tax and benefits system introduced by Labour since 1997 – while the “working poor” are better off by almost £1,700, or 13 per cent of their income…

“These figures, from the respected Institute for Fiscal Studies (IFS), will bolster the Government’s claims that it has been sharing the burden of adjustment in the economy “fairly”.”

The Financial Times says “Rich hit hard by 13 years of Labour Budgets”:

“Not since 1974, when Dennis Healey was said to have threatened to tax the rich “until the pips squeak”, has a British government sought to redistribute income from the well-off to the poor so aggressively, the IFS analysis showed.”

The Daily Mail, unsurprisingly, have a different angle: “The fleecing of the middle class: How Labour’s punished any family earning over £30,000”. The average annual income is £24,000.

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39 Responses to “Labour’s “Robin Hood” legacy”

  1. Rory Doona

    RT @leftfootfwd: Labour's "Robin Hood" legacy http://bit.ly/9FZeC0

  2. Avatar photo

    Will Straw

    Sevillista – I think you raise an interesting point which is that despite the clear redistribution (by proportion of income), inequalities have continued to rise as a result of exogenous factors such as globalisation. The key for me is how much worse would it have been without these redistributive policies? The OECD last year had good stats on how well Britain had done in relation to other OECD countries. Perhaps the slope should have been even steeper but given other factors, this is a relative success story.

    Silent – No Labour spin here. I published a picture from an independent think tank and a range of commentary from different papers.

    What’s your evidence that the poor have got poorer? Surely what you meant to say is that over 13 years, the poor have got richer and the rich have got even richer.

    Mr. Sensible – Spot on, as ever. We all know the truth about the Tories. Under Thatcher/Major this graph would have been sloped the other way and the same will be true if they get in. There attack on CTF is just the start of it when you consider what they’ll do to child tax credits, the unfairness of the marriage tax break, and everything they’ll do to public services.

  3. Sevillista

    Silent – to be clear, Labour have done a good job at preventing worsening market inequality leading to spiralling inequality. This would be a very different story if the Tories were in!

    However, it is merely treading water. The gains of growth have disproportionately accrued to the very richest.

    Also, tax has not risen as a % of income since 1997 for all the shouting on the right. Hence the structural deficit.

  4. Thomas Williams

    @nickbent Stick this up in the office for when people are on the phones! http://bit.ly/abZuQV

  5. Nick Bent

    RT @tomwilliamsisme: @nickbent Stick this up in office for when people are on the phones! http://bit.ly/abZuQV <good stuff! Labour fairness>

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