IFS: Brown “mitigated” income inequality

The Institute for Fiscal Studies this morning gave its verdict on Labour’s inequality record. In a spoof of the Conservative party poster depicting a grinning Gordon Brown and the caption, “I increased the gap between rich and poor – vote for me”, the IFS suggested that the former Labour Prime Minister had “mitigated” the rise in income inequality.

Presenting a slide show with key findings on the Labour government’s record including the latest data from 2008/09, Senior Research Economist Ali Muriel outlined that – although inequality was now at its second highest level ever – it would have been “even higher without changes to the tax and benefit system since 1996-97”. Simulations by the IFS for the Mirrlees Review found that the Gini coefficient measure of inequality “would be 0.03 higher if the tax and benefit system had simply been uprated in line with RPI”.

Published today, “Poverty and Inequality in the UK: 2010“, concluded that:

• living standards have surprisingly risen despite the recession due to discretionary increases in the tax and benefits system, and modest rises in earnings;

• Income inequality is largely unchanged although there is some evidence that income growth at the very top of the distribution was low or negative;

• As outlined by Kayte Lawton on Left Foot Forward yesterday, relative poverty fell 100,000 to 2.8 million on the Government’s preferred before housing costs measure while pensioner poverty fell 200,000; and

• Poverty amongst working-age adults without dependent children is at its highest level since the start of our comparable series in 1961.

Mr Muriel concluded by projecting that the interim child poverty target to halve child poverty by 2010 was likely to be missed by 0.6 million. Under current trends it is expected to rise again to 3.1 million by 2020. The report also found that poverty has fallen most under Labour in Scotland and the North East but risen in the Midlands.

32 Responses to “IFS: Brown “mitigated” income inequality”

  1. SadButMadLad

    “would be 0.03 higher if the tax and benefit system had simply been uprated in line with RPI”. Wow, a huge difference considering the Gini scale goes from 0 to 1.

    Another quote from the publication “the net effect … was to leave income inequality effectively unchanged and at historically high levels.”

    The Gini coefficient dipped a bit in 2003/4 but since 2005 has risen. Brown’s fault I suspect.

    Looking at the chart (pg30) it can be seen that Major managed to keep the Gini coefficient pretty stable as well. Only Thatcher caused the coefficient to rise spectacularly.

  2. max lawson

    RT @leftfootfwd: Using spoof poster, IFS conclude that Gordon Brown "mitigated" income inequality http://bit.ly/cr7bHe

  3. Qadri Jilani

    Tory spoof posters lied. Inequality would have been worse under Tories. "IFS: Brown "mitigated" income inequality" http://bit.ly/cr7bHe

  4. Baig

    Reading the newspapers after Brown’s departure, parts of the (more sensible) media are acknowledging that Brown’s economic successes were grossly under reported in the media. In fact his leading and superb handling of the financial crisis was better reported by the media abroad than it was by the British. Remember that many European countries and even the States were timid in how to tackle it and Brown provided the bold and erudite leadership that the rest of the world followed.

    Now this is a remarkable achievement and you are meant to be immensely proud that your Prime Minister helped save the world economy but the media was not too bothered. Anything negative, on the other hand, would make breaking news for a whole day if not a week (especially if you watch Sky News).

    Oh yes, and it is also becoming accepted by all that he did have an emotional concern for the poor. I can tell you that I was no fan of Tony Blair and the overseas projects that he was working on with George Bush. Unlike Blair, I believe Brown was a man of integrity who had a genuine concern for making Britain fairer for all. Sadly, I think it ended a bit soon for him and that for the wrong reasons.

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