Poor get even poorer in Brown's Britain

BRITAIN’s poorest 10% of families are becoming even poorer, according to devastating official figures which reveal that Chancellor Gordon Brown’s tax-and-spend agenda is hurting Middle Britain while failing to help the most vulnerable.

The poorest 5.8 million Britons are the only group whose take-home incomes are falling, according to figures buried in a 357-page Department of Work & Pensions (DWP) document.

Despite Brown’s numerous anti-poverty drives and job-creation schemes, the real income of the poorest - after tax, welfare and housing costs - fell from 91 per week in 2001-02 to 90 the year after, and 88 by April 2004. It was the worst two years for Britain’s poor since the recession of 1991.

The figures are drawn from a poll of 25,000 British families by a team of statisticians from the DWP together with the Office for National Statistics (ONS). The report, Households Below Average Income, shows that the groups most likely to vote, such as pensioners and parents, have been the main winners from Brown’s tax credits and redistributionist policies.

The study shows that the poorest 10% are being pushed further to the fringes of society. Their total income has fallen from 3% of the UK total in 1997-98 to 2.8% in 2003-04.

Welfare is the main source of income for the poorest 11.6 million in Britain, who rely on benefits and tax credits for 53% of their income. In this group, earnings account for only 39% of income. When housing costs are included, post-tax take-home pay of the top 10% rose by 1.4% between 2002-03 and 2003-04; during the same period, the poorest 10% saw their income drop by 2.2%.

The next worst-affected group was the middle earners, who suffered from a massive 12.9% rise in council tax and a 1% rise in national insurance.

The DWP data shows that the poorest 10% have consistently suffered since Labour came to power in 1997, with their income rising in only two of the past seven years for which figures are available.

The figures will come as a blow to Brown, who last week attempted to quash as "misleading" a report by the respected Institute for Fiscal Studies (IFS) suggesting that the average British household had seen a slide in income for the first time since the recession of the early 1990s.

Andrew Shephard, an analyst at the IFS and joint author of its Poverty and Inequality in Britain report released last week, said: "If you look at the policies of this government, they are about helping parents and pensioners.

"The groups most favoured by these policies tend to be in the second-lowest income category. Cutting across the social divide, figures for the year to April 2004 reveal that the hardest-hit group after housing costs was families where one or both adults claimed unemployment benefit.

"Their income plunged 8.2%. A single woman without children - and therefore not eligible for Brown’s vote-seeking child tax credits - suffered a 2.3% drop."