Living standards under Labour

Living standards under Labour

The four years of the new Labour government have seen a rise in living standards across the income distribution. This has been a period of consistent economic growth, during which time average earnings have risen, employment has grown and the generosity of many benefits, for those in and out of work, has risen. Despite the tax increases described in Election Briefing Note 2, net incomes are higher now on average than they were four years ago. The gains in living standards over this Parliament have been unevenly spread across the income distribution – income inequality was higher in 1999–2000 than it was before Labour came to power. But in the final year for which we have data (1999–2000), inequality seems to have stopped rising. Despite the overall increase in inequality, the numbers in poverty, as measured both by absolute and by some relative measures, fell in the two years to 1998–99, although the changes in poverty occurring after this time are not yet known.

This Briefing Note examines the changes in living standards, inequality and poverty that have taken place under the Labour government, putting them in the context of the changes over the last two decades.