State fails to narrow poverty gap

Government spending on the welfare state has done little to offset the growing divide between rich and poor. Only just over half of all expenditure, on health, education, housing subsidies and social services, benefits the poorer half of the population, according to a study published today by the Joseph Rowntree Foundation.

The research into spending since 1979 finds that the value of the "social wage" - the income in kind received from welfare services - was only 20 per cent higher for the poorest fifth of the population than the richest fifth, when differences in age and sex are taken into account.

The limited degree of redistribution achieved by the welfare state is explained by the fact that although expenditure on housing and social services is heavily weighted towards the poor, spending on higher education benefits the most prosperous.

Even allowing for the social wage, the gap between the richest and poorest households grew markedly wider between 1979 and 1993. The income of the poorest fifth, in cash and kind, grew by up to 13 per cent, compared with a 60 per cent increase for the richest households.

The Changing Distribution of the Social Wage. Summary available from the Joseph Rowntree Foundation, 01904 629241 or www.jrf.org.uk. Consumers' top 10

1. Housing

2. Leisure services

3. Food (household)

4. Motoring

5. Household goods

6. Alcohol

7. Clothing and footwear

8. Leisure goods

9. Financial services

10. Personal goods and services