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The gap between the rich and the poor has grown thanks to benefits freeze

The ONS’ assessment of income inequality in the UK found that the richest fifth of the population earned almost five per cent more on average while the poorest saw earnings fall by 1.6 per cent

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.

The official stats body explained that the rise in earnings is down to an increase in employment but the loss of value for benefits saw a falling income for the poorest.

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.

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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.

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.”

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.”

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