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Sean O'Grady: This exposes Labour's poverty of ambition

That relative poverty – the gap between rich and poor rather than the absolute availability of basic necessities – should be higher than it was when Harold Macmillan was prime minister is a galling discovery. The Institute for Fiscal Studies, a sort of non-partisan unofficial opposition party equipped with massive brainpower, tells us that the distance between our richest and our least fortunate citizens is as high as it has been since their data starts, in 1961. Which leaves open the possibility that Brown's Britain may be more unequal than we were before the creation of the NHS and the modern welfare state. Supermac's misquoted catchphrase was "you've never had it so good"; Gordon Brown's might be that "you've never had it so bad" – if you have the misfortune to be poor.

An extra 200,000 people fell into poverty in Mr Brown's first year in power, bringing the total to 13.5 million. These people are the ones living in homes with incomes below 60 per cent of the typical British household's. They are not starving, but they lack many of the easy luxuries Middle England takes for granted. They are prey for the BNP.

The Government's ambitions to halve child poverty by 2010 and to eradicate it by 2020 looked achievable during the boom. But with the economic downturn the chances of achieving the 2010 goal are nil. And with the mess the public finances are in, the 2020 target also recedes into the realms of "aspiration".

Mr Brown is right to highlight all the schemes he has funded to improve the life chances of today's youngsters. Maybe without them things would be worse. However, the fortunes of the "Blair Generation" are about to take a bad turn. Those who started school in 1997 are 16 now and ready to belly-flop on to the worst jobs market in decades. Low-skilled younger workers usually do badly in recessions; they are the easiest to sack. They soon turn into "Neets" – not in employment, education or training schemes. So it is proving this time round. Youth unemployment is already higher than when John Major left a good luck card on his desk at No 10 for Tony Blair. Given that joblessness is usually the single most important determinant of poverty, the generation who reached adulthood under Blair and Brown will be the people driving the poverty numbers higher over the coming months and years. Mr Brown made his political career passionately railing against the lost generation of unemployed youngsters in the 1980s. Twenty years on, another lost generation – and lost votes – may be his undoing.