Gap between rich and poor widened under Labour: Study |
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Published
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Thu, 18 May 2006 09:55
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LONDON - The nine years of Labour rule in the country has seen a widening of the gap between the rich and the poor, says a new study released by the Institute for Fiscal Studies on Wednesday.
Traditionally the rate of poverty is measured by the proportion of households with income is less than at least 60 percent of the prevailing median household income. If this parameter is applied, poverty rate fell from 25 percent to 22 percent between 1997/98 to 2002/03. But the IFS applied the parameter of household spending instead and found poverty increased from 20 percent to 22 percent of households during the same period of time.
Using the same measure, IFS said that the rate of poverty actually rose by 11 percent in this time as opposed to the government's claims that it fell 15 percent. IFS says in the report that "while the government has made some inroads into reducing income inequality, it is yet to reduce spending inequalities, which arguably better reflect longer term differences in society."
The results of the study are a blow to the Labour Party since one of the main plans of, Mr Blair's reelection all these years had been the reduction of relative poverty. The government has made some policy changes in an attempt to narrow the rich-poor gap. The main architect of some of these measures is Chancellor Gordon Brown whose means-tested tax credits and pension credits have succeeded to some extent.
The IFS is not disputing the success of the schemes. Rather it says that poverty should be measured by spending rather than income. "Spending provides a more direct measure of people's material well being, since it more directly captures the consumption of goods and services," it said.
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