Inequality and Poverty in the UK

This House of Lords Library Briefing has been prepared in advance of the debate due to take place on 13 June 2019. Lord Dubs (Labour) is to move that “this House takes note of inequalities in income, wealth and living standards in the UK since the 2008 financial crisis; and further takes note of the Institute for Fiscal Studies Deaton Review of inequalities in the 21st century in the UK and the final report of the UN special rapporteur on extreme poverty and human rights”.

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On 14 May 2019, the Institute for Fiscal Studies (IFS) announced a new review of inequality, the ‘IFS Deaton Review’. The IFS said it would be “the most comprehensive scientific analysis of inequalities yet attempted”. It is expected to take five years.

The IFS’ introductory report contained a summary of recent statistics on inequality. These included comparisons suggesting that the UK was the third most unequal country out of 32 based on incomes. The statistics also suggested that income inequality has fallen since 2008. Official government statistics also indicate that income inequality has been falling since 1999/2000. The IFS Deaton report will also consider wider definitions of inequality, including in relation to health, gender, region and age.

On 22 May 2019, the UN’s special rapporteur on extreme poverty and human rights published a report on the UK. The report said that 14 million people, one fifth of the UK population, live in poverty. It stated that “the UK Government’s policies have led to the systematic immiseration of millions across Great Britain”. The Government rejected the report, describing it as “barely believable” and “completely inaccurate”.

Official poverty statistics suggested that the percentage of individuals living in poverty ranged from 15% to 22% in 2017/18, depending on the measure used. Looking at trends over time, the percentage of the population in absolute poverty has fallen since 2002/03. The percentage in relative poverty has stayed broadly stable.

Commentators have noted that too much weight should not be placed on any single measure of poverty. The Office for National Statistics has recently announced that it will produce experimental poverty statistics on a new basis from 2020.

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