Gap between rich and poor has widened under Labour government

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THE GAP between the richest and poorest in Britain widened in the first year of the Labour Government, with a million more people earning less than two fifths of the national average income.

A picture of persistent inequalities has emerged from the first independent assessment of the Government's poverty record, commissioned by the Joseph Rowntree Foundation (JRF) and conducted by the New Policy Institute(NPI).

The number of families and individuals living on low incomes has risen to 8 million, close to record levels reached earlier in the decade. The timing of the study is embarrassing for the Government, coming just days after it launched a report dismissing the existence of the North-South divide and head off criticisms that Labour has done little to reduce the poverty gap.

The JFR report shows that there are large regional variations with twice the proportion of people living on benefits in the North-east compared with the South-east.

The researchers from the NPI looked at 48 key poverty indicators, including numbers of people on benefits, children living in workless households, adult job insecurity and low rates of pay, and found that only 15 showed any improvement. On 13 indicators, the situation had got worse.

"This report is the most important assessment yet published of the extent of poverty in the late 1990s, and of Labour's early record in fighting it," said Peter Kenway, co-director of the NPI.

"Time will tell if the measures announced in recent budgets can succeed in turning the tide of poverty and social exclusion.

"But these figures show that an improving economy and falling unemployment are not enough on their own." Ministers welcomed the report but they said the findings were not an indication of failing anti-poverty policies.

"We are dealing with problems that have built up over the last 20 years," said Alistair Darling, Secretary of State for Social Security.

"This report covers the period before our reforms were introduced. It vindicates the need for those reforms. We are determined to tackle poverty and its causes to ensure that everyone has the best possible chance in life," he said.

However, critics said that the Government's reliance on blaming the Tory inheritance could not last much longer.