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  • Author or Editor: Tom Sefton x
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While Tony Blair has stated that income redistribution is not an explicit aim of his government, many of the changes it has made to the tax and benefit system have been redistributive. The experience to date highlights the challenge New Labour faces if it is to make further progress in reducing poverty and inequality. All the resources they have directed at low-income households since 1997 – and these have been considerable – have just about reduced child poverty by a quarter, while overall poverty rates and inequality have only fallen marginally or not at all. To reduce poverty further will require substantially more redistribution to the poorest, especially those unable to work. To reduce inequality will almost certainly require something to be done to curb the growth in very high incomes, as well as measures to address the long-term drivers of inequality.

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This chapter looks at public attitudes to inequality, poverty, and redistribution, using quantitative and qualitative sources to ask whether public opinion has become more or less progressive since 1997 and whether New Labour’s attempts to redefine the party have influenced the way people think about these issues. There is a growing body of opinion that more radical measures will be needed to make further progress in reducing poverty and that this in turn will require much stronger public support. This chapter attempts to pull together the evidence on attitudes to social justice and the beliefs and values that underpin them.

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One of the legacies of the Thatcher years was the marked shift towards greater inequality. While average incomes grew rapidly during the 1980s, the benefits were spread very unevenly. Between 1979 and 1996/97, the median income of the richest 10% increased by over 60% in real terms, but that of the poorest 10% rose by just 11% (or fell by 13% if incomes are measured after housing costs). Although inequality did stop rising during the recession of the early 1990s, it started to rise again in the mid-1990s. When Labour came to power in 1997, the distribution of incomes in Britain was more unequal than at any time in recent history. The increase in inequality over the preceding twenty years was also exceptional in international terms.

Previous research suggests a number of factors contributed to rising inequality (Hills, 2004a, ch 4):

  • a dramatic rise in the dispersion of earnings between low- and high-skilled workers, which is widely attributed to technological changes favouring those with greater skills;

  • a large increase in the proportion of workless households, even after individual employment rates returned to the levels they were at in the late 1970s;

  • the increasing importance of other sources of income, such as occupational pensions and income from savings and self-employment, which are even more unequally distributed than earnings; and

  • tax and benefits policies that did not dampen the rising inequality in market incomes: uprating benefits in line with prices, rather than earnings, meant that a growing minority fell gradually further behind the rest of the population, while discretionary changes in taxes during the 1980s favoured the rich.

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Poverty, inequality and policy since 1997

When New Labour came to power in 1997, its leaders asked for it to be judged after ten years on its success in making Britain ‘a more equal society’. As it approaches the end of an unprecedented third term in office, this book asks whether Britain has indeed moved in that direction.

The highly successful earlier volume “A more equal society?” was described by Polly Toynbee as “the LSE’s mighty judgement on inequality”. Now this second volume by the same team of authors provides an independent assessment of the success or otherwise of New Labour’s policies over a longer period. It provides:

· consideration by a range of expert authors of a broad set of indicators and policy areas affecting poverty, inequality and social exclusion;

· analysis of developments up to the third term on areas including income inequality, education, employment, health inequalities, neighbourhoods, minority ethnic groups, children and older people;

· an assessment of outcomes a decade on, asking whether policies stood up to the challenges, and whether successful strategies have been sustained or have run out of steam; chapters on migration, social attitudes, the devolved administrations, the new Equality and Human Rights Commission, and future pressures.

The book is essential reading for academic and student audiences with an interest in contemporary social policy, as well as for all those seeking an objective account of Labour’s achievements in power.

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Soon after it was elected in 1997, Tony Blair’s ‘New Labour’ government became embroiled in a row about the implementation of cuts in benefits for lone parents that had been set in train by the outgoing administration. In the late spring of 2008, another huge row broke out over the treatment of those with low incomes. Huge damage had been done to the government’s and particularly the new Prime Minister, Gordon Brown’s, reputation for being on the side of the poor. These two events bracket the period covered in the book – one of sustained economic growth and low unemployment, which at the time of writing appears to have come to an end. This book brings together evidence on each of these domains with the aim of providing a balanced assessment of more than a decade of New Labour government.

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This chapter sets the scene for the rest of the book by examining the evidence on income poverty and income inequality. The assessment includes the results of micro-simulation, which allows one to separate the effects of tax-benefit policy from the effects of demographic and labour-market changes, addressing the tricky question of the counterfactual: what would have happened in the absence of policy changes? The chapter also looks at the distributional impact of public expenditure on benefits in kind such as health and education. Inequality measures generally exclude benefits in kind, but as public spending tends to be higher on poorer households, increases in spending can make a significant difference to the state’s overall redistributive impact.

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This chapter pulls together the threads of the book with the aim of reaching an overall assessment of the government’s record since it came to power in 1997. It examines whether the evidence of the previous chapters adds up to a picture of substantial change, a serious assault on inherited levels of poverty, inequality, and social exclusion. The chapter examines how much of a difference New Labour, after more than a decade in government, can be said to have made and whether Britain is a ‘more equal society’ than it was in 1997. In several key respects, the UK was a somewhat more equal society after 10 years of New Labour government.

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When New Labour came to power in 1997, its leaders asked for it to be judged after ten years on its success in making Britain ‘a more equal society’. This book asks whether Britain did indeed move in that direction by the time New Labour had achieved a third term in office. The earlier volume A more equal society? was described by Polly Toynbee as ‘the LSE’s mighty judgement on inequality’. This second volume by the same team of authors provides an independent assessment of the success or otherwise of New Labour’s policies over a longer period. It provides: a consideration by a range of expert authors of a broad set of indicators and policy areas affecting poverty, inequality, and social exclusion; analysis of developments up to the third term on areas including income inequality, education, employment, health inequalities, neighbourhoods, minority ethnic groups, children, and older people; an assessment of outcomes a decade on, asking whether policies stood up to the challenges, and whether successful strategies have been sustained or have run out of steam; and chapters on migration, social attitudes, the devolved administrations, the Equality and Human Rights Commission (EHRC), and future pressures.

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When New Labour came to power in 1997, its leaders asked for it to be judged after ten years on its success in making Britain ‘a more equal society’. This book asks whether Britain did indeed move in that direction by the time New Labour had achieved a third term in office. The earlier volume A more equal society? was described by Polly Toynbee as ‘the LSE’s mighty judgement on inequality’. This second volume by the same team of authors provides an independent assessment of the success or otherwise of New Labour’s policies over a longer period. It provides: a consideration by a range of expert authors of a broad set of indicators and policy areas affecting poverty, inequality, and social exclusion; analysis of developments up to the third term on areas including income inequality, education, employment, health inequalities, neighbourhoods, minority ethnic groups, children, and older people; an assessment of outcomes a decade on, asking whether policies stood up to the challenges, and whether successful strategies have been sustained or have run out of steam; and chapters on migration, social attitudes, the devolved administrations, the Equality and Human Rights Commission (EHRC), and future pressures.

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When New Labour came to power in 1997, its leaders asked for it to be judged after ten years on its success in making Britain ‘a more equal society’. This book asks whether Britain did indeed move in that direction by the time New Labour had achieved a third term in office. The earlier volume A more equal society? was described by Polly Toynbee as ‘the LSE’s mighty judgement on inequality’. This second volume by the same team of authors provides an independent assessment of the success or otherwise of New Labour’s policies over a longer period. It provides: a consideration by a range of expert authors of a broad set of indicators and policy areas affecting poverty, inequality, and social exclusion; analysis of developments up to the third term on areas including income inequality, education, employment, health inequalities, neighbourhoods, minority ethnic groups, children, and older people; an assessment of outcomes a decade on, asking whether policies stood up to the challenges, and whether successful strategies have been sustained or have run out of steam; and chapters on migration, social attitudes, the devolved administrations, the Equality and Human Rights Commission (EHRC), and future pressures.

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