Tuesday 21 October 2008

Narrowing the gap: policy matters

Listening to the Today programme this morning raised the hope that those oft repeated mistaken points - 'Labour has increased inequality' and 'social mobility has fallen under Labour' might finally be challenged by a more informed and nuanced debate.

The new OECD study finds that the UK had a "remarkable" record in challenging and beginning to reverse widening inequality, with "the largest fall in inequality of any developed country, when inequality is mostly widening internationally".

The gap started to narrow after 2000. Why? Because public spending began to increase after 1999; because there was an active labour market policy to get people into work; and because tax credits increased the income of those in work.

There is a useful and detailed media brief (PDF file) summarising the report.

One big message comes across from comparative evidence and the history of inequality in the UK. It is this: policy matters. What governments do matter..

The inequality gap remains wide, by international standards, in the UK. We were one of the more equal European societies prior to 1975; we became one of the most unequal in the 1980s. The quiet progress made more recently should be used to challenge fatalism. The gap matters. And it can be closed.

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