Monday, July 22, 2013

UK inequality rising more quickly than under Thatcher – report

The UK government’s welfare cuts and changes to taxation have encouraged economic inequality so intensely that they amount to ‘speeded-up Thatcherism.’ The divide between rich and poor is widening faster than in the 1980s, according to a new report.
The slashing of UK welfare benefits and simultaneous cuts in tax credits means that inequality will have soared twice as fast by 2015 than it did under the 1980s Conservative Prime Minister, Margaret Thatcher, according to a Fabian society report to be published on Monday and previewed in theIndependent on Sunday. 

Working-age families with children will be particularly hard-hit in the coming years, according to the report, written by economist Howard Reed. He laid out the impact of Conservative / Liberal Democrat coalition policies on household income, drawing the conclusion that the poorest families in the UK are on a path to losing some 12 percent of their average income. 

However, the UK’s second wealthiest income bracket are set to lose a mere three percent of their net income, illustrating the backwardness of the set of policies. Council Tax is used as an example in the report, which points out how it charges low-to-middle income families a considerably higher percentage of their disposable income than the richest British households. 

It is quite possible that the impact of the coalition’s tax and benefit measures would be as bad for inequality as the Thatcher government’s record, despite the fact that, by 2015, David Cameron will have been Prime Minister for less than half as long as Margaret Thatcher was, said Reed, comparing it to aspeeded-up action replay of Thatcherism.”