The gap between the rich and poor has widened in recent years and is greater than at any time in the past 40 years, according to a report published by the Joseph Rowntree Trust yesterday.
Poverty and Wealth Across Britain 1968 to 2005 found that the gap between the rich and poor narrowed in the 1970s. However, in the 1980s and 1990s there was a growing ‘polarisation’, with inequality increasing dramatically.
The ‘Key Points’ in the report were outlined as follows:
‘• Since 1970, area rates of poverty and wealth have changed significantly. Britain is moving back towards levels of inequality in wealth and poverty last seen more than 40 years ago.
‘• Over the last 15 years, more households have become poor, but fewer are very poor.
‘Even though there was less extreme poverty, the overall number of “breadline poor” households increased – households where people live below the standard poverty line. This has consistently been above 17 per cent, peaking at 27 per cent in 2001.
‘• Already wealthy areas have tended to become disproportionately wealthier.
‘There is evidence of increasing polarisation, where rich and poor now live further apart. In areas of some cities over half of all households are now breadline poor.’
It adds: ‘l Urban clustering of poverty has increased, while wealthy households have concentrated in the outskirts and surrounds of major cities, especially those classified as “exclusive wealthy”, which have been steadily concentrating around London . . .
‘• “Average” households (neither poor nor wealthy) have been diminishing in number and gradually disappearing from London and the south east.’
This report reveals the trend, fostered by the Tory government under Prime Minister Margaret Thatcher, where a small group of very rich people became richer, while most people (‘Average’ households – 50 per cent non-poor, non-wealthy) lost out and more people were forced to live on the breadline.
These Thatcherite policies have been expanded by the Labour government of Prime Minister Tony Blair and Chancellor Gordon Brown, the present Prime Minister.
While preaching ‘equality’ and ‘social justice’ as Chancellor, Brown put in place policies of de-regulation and privatisation that provided a cash bonanza for the speculators of the City of London – banks, insurance companies, building societies, financial groups, hedge funds and private equity groups.
Only the most poverty-stricken households get meagre means-tested benefits under the financial regime imposed by Brown.
‘Average’ households, that is working class and middle class people, only have the appearance of being able to live comfortably because they are ‘asset wealthy’; speculation has driven up the prices of homeowners’ houses and flats.
However, these conditions are now turning into their opposite. Homeowners face an ever heavier burden of mortgage repayments, with seven interest rate rises in the last year taking the Bank of England base rate to 5.75 per cent. They confront the prospect of a housing market crash under the impact of the next round of interest rate rises.
‘Average’ households are already being driven out of London and the south-east. The very poor, in the lowest paid jobs, are forced to live in inner city ghettos.
Millions of people voted Labour in 1997 to put an end to Thatcherite Tory governments. Yet Blair and Brown have turned Britain into a speculators’ paradise for the super-rich, that feels like a workhouse for millions of ‘average’ households.
Today, millions of workers, with public sector staff in the vanguard, are showing that they will not stand for pay cuts for workers in the NHS, education, the civil service and local councils.
It is clear that the trade unions representing public sector workers must develop an alliance to take strike action to smash these pay cuts and mobilise the whole trade union movement in a general strike to bring down Brown’s speculators’ government.
It must be replaced with a workers’ government which will carry out socialist policies – nationalise the banks and financial institutions of the City of London, guarantee affordable housing for everyone, expand state-owned public services and end means-testing for pensions and benefits.