Inequality is on the rise in the UK after the gap between the richest and the poorest widened, according to the Office for National Statistics, and the benefits freeze is to blame.
The richest fifth of the population saw average income increase by 4.7 per cent for the financial year ending in 2018 while it contracted by 1.6 per cent for the poorest.
— ResolutionFoundation (@resfoundation) February 26, 2019
This means that the freeze on household benefits means that inflation has devalued how much each family receives in real terms.
Brought in back in 2015 by then-chancellor of the exchequer George Osborne, the freeze is due to last until 2020.
As for the richest one per cent of the population, experimental statistics show that their share of total household disposable income was 7.1 per cent – which has largely been unchanged for the last seven years.
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Both of the above measurements for the UK’s richest are below the level seen at the end of the 2008 financial year when the country was in the grip of the economic downturn.
“While our report highlights a contraction in average income for the poorest fifth of the population, the longer-term trend has seen this group’s income rise the most,” said Dominic Webber, the head of household income and expenditure analysis at the ONS. “As such it may be too early to draw definite conclusions from this specific downtick.
“Those in the richest fifth have seen a greater change, as well as a sustained rise over a number of years, which has helped to drive an increase in inequality.”
The average income of the richest fifth of the population increased by 4.7%, part of a sustained rise over time. The average income of the poorest fifth contracted by 1.6% https://t.co/m2gBGIRWdl pic.twitter.com/2Qd7sFvjGP
— ONS (@ONS) February 26, 2019
But Shadow Chancellor John McDonnell responding the figures by claiming that the “economy is in tatters”.
“Today’s evidence of surging income inequality shows that this Tory government is not creating an economy that works for the many,” the Labour MP said.
“With falling business investment, downgraded forecasts of growth, and a manufacturing recession, we have an economy in tatters.”