Economic and Social Inequality

Lord Howarth of Newport Excerpts

Thursday 18th June 2015 Lords Chamber

Asked by

[Lord Howarth of Newport]

To ask Her Majesty’s Government what measures they will prioritise to reduce economic and social inequality in a One Nation Britain.

[Lord Ashton of Hyde (Con)]

My Lords, the Government believe that the best way to reduce inequality is by delivering full employment and reducing the number of workless households. By restoring growth to the economy, low-income households will become more likely to enter work, and households will reap the benefits of a growing economy. More people are in work now than ever before, and since 2010 the number of children in workless households has fallen by around 390,000.

[Lord Howarth of Newport (Lab)]

My Lords, while the Prime Minister sloganises about the Government’s one-nation approach and as the Chancellor forswears any tax increases on the well off and remains bent on hitting the poorest again with a further £12 billion of cuts in social security, is it not inevitable that inequality will worsen, with its associated pathologies of ill health, underperforming education, poor productivity, slow economic growth—as the IMF pointed out this week—and, whatever tokenistic legislation they pass, a budget surplus continuing to recede beyond the horizon?

[Lord Ashton of Hyde]

My Lords, I do not agree with the noble Lord. Income inequality in the UK has actually come down, and this is reflected in household incomes since 2007-08. The annual average disposable income of the poorest fifth of households has risen by £100 in real terms, while over the same period the largest fall has been in income for the richest fifth of households, which has reduced by £3,000 per year. The way to address inequalities, both social and economic, is to get people into work so that they can reap the benefits of full employment.