Truth about austerity: Rich-poor gap ‘smaller than it was 10 years ago’

THE gap between rich and poor across the UK is smaller now than a decade ago despite Leftwing claims that inequality has got worse under the Tories, a major report reveals today.

According to the Institute for Fiscal Studies, income inequality fell sharply after the recession at the end of the 2000s and has barely changed since.

Researchers found the net incomes of the top 1 per cent of earners are around 10 per cent below pre-recession levels, compared with a 5 per cent fall among average earners.

The sharpest reductions in the income gap were in London, the IFS found. Since the end of the last decade, the incomes of the poorest 10 per cent of earn-

ers in the capital have risen by more than 10 per cent, while those of the top 10 per cent of households have fallen by more than 10 per cent.

The IFS said the shift could be explained by ‘strong growth in employment’ in the capital – up 5 per cent since 2007 – and falls in overall earnings.

Household incomes have also been ‘supported’ by Tory tax cuts. In 2010 single workers started paying income tax after earning £6,475 but that now stands at £11,500.

Across the country, incomes of the bottom 10 per cent have grown by nearly per cent and average earnings by 4 per cent since 2007. The incomes of the top 10 per cent fell slightly.

Robert Joyce, of the IFS, said: ‘Fluctuating incomes mean that many fewer people are classed as persistently poor than have a low income at any point in time.’

‘Fewer classed as persistently poor’