Mind the gap | 16 May 2019

This week the Institute for Fiscal Studies announced a five-year study into inequality in Britain, to be led by the economist Sir Angus Deaton, a Scottish academic who recently won the Nobel prize for economics. It is to be welcomed, because it will widen the scope of a debate that has been too narrow for too long.

Britain’s problems with inequality stem not from an unfair distribution of income but from patchy provision of public services, which are often far better in wealthier areas than in poorer ones. As the IFS makes clear in a report to launch its initiative, income inequality in Britain is not rising — how-ever much the Labour party would like to tell us it is.

One of the great tragedies of the Blair government was that its policies merged poverty and inequality into a single statistic that could be manipulated by tax credits. Billions were spent moving people from just below this misleading poverty line to just above it.