Labour and Inequality

An article in the Daily Telegraph (13/5/06) shows the Gini Coefficient has fallen to 0.32. According to an earlier paper by Jonathan Shaw for the Institute of Fiscal Studies the Gini Coefficent increased by 2% during Labour's first term, but has fallen since 2000. The table - from here actually shows less inequality during the Major years than under Blair, but the table only goes as far as 2003. Furthermore, Shaw's projecions show that without changes in tax and benefits introduced by Labour inequality would have substantially increased after 1997. It does seem to be the case that the fall is due to Labour's policies: especially tax credits and benefit increases for pensioners and low-income families. However,the big increases in inequality in the 1980's have not been reversed (the Gini Coefficient was 0.25 in 1979).