Poverty; Still an issue

Very disturbing to see the results of the IFS report into poverty that has indicated a rise in relative poverty and an increase in income inequality as measured by the Gini coefficient.

These results provide an interesting backdrop to the debate surrounding the last budget.

Brown and Labour have made great strides towards addressing issues of poverty and equality, but the issues that remain must be acknowledged openly and debated frankly.

Clearly there are structural issues contributing to poverty that have not been sufficiently addressed and which can't be rectified by tax credits alone.

Interestingly a flat tax system is one that is more commonly proposed by right-wing economists because it is 'equitable' to all, irregardless of the circumstances that people face.

So Brown's decision to flatten the tax system by removing the 10% band is strange conceptually, but in reality it also doesn't necessarily contribute to progressive outcomes; for those moving from welfare to work it often creates bigger disincentives through higher marginal tax rates.

As per the earlier post a Labour Government should be trying to empower working people and to assist them achieve their aspirations, not put unnecessary barriers in their way.