Income Inequality

Baroness Lister of Burtersett Excerpts

Wednesday 31st January 2018 Lords Chamber

Asked by

[Baroness Lister of Burtersett]

To ask Her Majesty’s Government whether they have a policy goal to reduce income inequality; and if so, what is their strategy for achieving that goal.

[Lord Taylor of Holbeach (Con)]

My Lords, income inequality is lower than it was in 2010. The best way to reduce inequality is by getting people into work, and since 2010 we have seen 3 million more people find work as a result. The national living wage has helped to reduce the proportion of full-time jobs that are low paid to the lowest level in at least 20 years. In the long term, this is the best way to improve living standards and reduce inequality, as well as to boost our productivity as a nation.

[Baroness Lister of Burtersett (Lab)]

My Lords, if the Minister had used the measure of income inequality recommended by the ONS rather than the ONS’s own less accurate measure, he would not have been able to paint nearly such a rosy picture, especially if housing costs were taken into account. As it is, inequality is starting to rise again and is predicted to increase massively by 2020 as a result of government policy. Could the Minister explain how a policy of freezing benefits for the worst-off in work, as well as out of work, to their disadvantage, while cutting taxes to the advantage of the better-off, will help to reduce inequality?

[Lord Taylor of Holbeach]

My Lords, to improve the living standards of squeezed households in the short term, the Government will boost incomes for the low-paid, increasing the national living wage and the personal allowance. To help to reduce the cost of living, we are freezing fuel duty and childcare and tackling housing costs. The core of the problem lies in our low productivity as a country, and we have to try to tackle this problem in both ways.