Inequality: Income and Wealth

Lord Avebury Excerpts

Monday 11th March 2013 Lords Chamber

[Lord Deighton]

What I can tell the noble Lord about the increase in personal allowances is that it is a highly progressive change in the tax system. It applies to about 24.5 million or 25 million taxpayers, who will enjoy a benefit of about £400 from it in 2013-14, and it takes just over 2 million people out of the tax system.

[Lord Avebury]

Has my noble friend studied the evidence published by the Equality Trust, which shows that across all the OECD countries, and similarly across all the states of the United States, there is a strong correlation between income inequality and indices of social malfunction such as crime, alcoholism, and teenage pregnancies? Considering that we are the second most unequal state in the whole comparison, does he not think that the Government’s policies should be strengthened to deal with those inequalities?

[Lord Deighton]

I thank my noble friend for pointing out that the causes of some of these social challenges are broader than those that will be tackled by our tax policy. It is much more important to get to the root causes and deal with issues such as education challenges, other public services, alcoholism and the breakdown of family life. That is extremely important.