ROOF Blog

Labour’s strategy for tackling poverty has reached the end of the road and Britain risks a return to Victorian levels of inequality, according to a major two-year study by the Labour-affiliated Fabian Society and Webb Memorial Trust.

With 20 per cent of the population still stuck in poverty, the report calls for sweeping reform of the tax and welfare systems under which higher earners would finance more generous, universal benefits.

With all three main parties committed to cut spending to reduce the huge deficit in the public finances, the authors are worried that the battle against poverty will suffer.

They urge the parties to sign up to a new ‘poverty prevention strategy’ – not for the next Budget, but for the next 30 years.

Tim Horton, the Fabian Society’s research director, said: ‘We could be at a tipping point that sends Britain back towards Victorian levels of inequality and social segregation, and makes the solidarity which could challenge that social segregation ever more difficult to recover.’

Opinion is divided over whether buying or renting is the better housing policy.

Centre for Social Justice Executive director Philippa Stroud argues that property ownership is still one of the best defences against poverty.

Royal Society for the Arts chief executive Matthew Taylor counters that home ownership has increased social inequality in terms of the life chances and assets of people who own their own homes, arguing instead that we should foster a massive expansion in the private rental sector and improve the quality of the houses on offer.

In the three years since the 2005 general election, inequality in Britain grew at a faster rate than at any time since records began in the 1960s, figures from the Institute of Fiscal Studies reveal. The poorest 20 per cent of households saw real income fall by 2.6 per cent in the three years to 2007/08, while those in the top fifth enjoyed a rise of 3.3 per cent. The number of working adults below the poverty line rose by 300,000 to 11 million, the highest level ever. A spokesperson from the IFS said that the recession may see poorer households ‘regain some ground’ if benefits grow more quickly than wages, salaries and bonuses of the better off.