George Osborne holds freshly minted coins during a visit to the Royal Mint in Llantrisant, Wales on March 25, 2014. Photograph: Getty Images.
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Labour's new earnings data undermines Osborne's boast on inequality

The share of post-tax income received by the top 1 per cent has risen, while falling for the bottom 90 per cent.

One of the most surprising boasts in George Osborne's last Budget was his declaration that "under this government income inequality is at its lowest level for 28 years" (indeed, it prompted cries of disbelief from the Labour benches). Surprising because it's rare for Conservatives to be preoccupied with the gap between the rich and the poor and because austerity is generally held to have widened it. 

But the trend isn't as unusual as some suggest; it's normal in times of economic stagnation for inequality to fall as middle class earnings decline and the automatic stabilisers protect the incomes of the poorest. What Osborne didn't mention, however, is that the figures he cited date from 2011-12 and inequality is thought to have risen since as the government's welfare cuts take full effect and high-earners reap the benefits of the abolition of the 50p tax rate. 

New data released by Labour today suggests that is precisely what has happened. Over the last year, the share of post-tax income received by the top one per cent of earners – 300,000 people – has risen from 8.2 per cent (in 2012/13) to 9.8 per cent (in 2013/14), while the share taken by the bottom 90 per cent has fallen from 71.3 per cent to 70.4 per cent. 

In Labour's economic battle with the Tories, this is potent ammunition. It is empirical proof of the party's assertion that the recovery is benefiting a few at the expense of the many (one David Axelrod will hone when he holds his first meeting with Ed Miliband and other senior Labour figures today). As the coalition prepares to hail new figures showing average wages (inflated by high pay at the top) outstripping inflation, expect Labour to put this message centre stage. 

The challenge for Ed Miliband, who rightly regards inequality as the defining issue in politics today, will be convincing voters that he has both the will and the means to halt the widening chasm between rich and poor.

George Eaton is political editor of the New Statesman.

Photo: Getty
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PMQs review: Jeremy Corbyn prompts Tory outrage as he blames Grenfell Tower fire on austerity

To Conservative cries of "shame on you!", the Labour leader warned that "we all pay a price in public safety" for spending cuts.

A fortnight after the Grenfell Tower fire erupted, the tragedy continues to cast a shadow over British politics. Rather than probing Theresa May on the DUP deal, Jeremy Corbyn asked a series of forensic questions on the incident, in which at least 79 people are confirmed to have died.

In the first PMQs of the new parliament, May revealed that the number of buildings that had failed fire safety tests had risen to 120 (a 100 per cent failure rate) and that the cladding used on Grenfell Tower was "non-compliant" with building regulations (Corbyn had asked whether it was "legal").

After several factual questions, the Labour leader rose to his political argument. To cries of "shame on you!" from Tory MPs, he warned that local authority cuts of 40 per cent meant "we all pay a price in public safety". Corbyn added: “What the tragedy of Grenfell Tower has exposed is the disastrous effects of austerity. The disregard for working-class communities, the terrible consequences of deregulation and cutting corners." Corbyn noted that 11,000 firefighters had been cut and that the public sector pay cap (which Labour has tabled a Queen's Speech amendment against) was hindering recruitment. "This disaster must be a wake-up call," he concluded.

But May, who fared better than many expected, had a ready retort. "The cladding of tower blocks did not start under this government, it did not start under the previous coalition governments, the cladding of tower blocks began under the Blair government," she said. “In 2005 it was a Labour government that introduced the regulatory reform fire safety order which changed the requirements to inspect a building on fire safety from the local fire authority to a 'responsible person'." In this regard, however, Corbyn's lack of frontbench experience is a virtue – no action by the last Labour government can be pinned on him. 

Whether or not the Conservatives accept the link between Grenfell and austerity, their reluctance to defend continued cuts shows an awareness of how politically vulnerable they have become (No10 has announced that the public sector pay cap is under review).

Though Tory MP Philip Davies accused May of having an "aversion" to policies "that might be popular with the public" (he demanded the abolition of the 0.7 per cent foreign aid target), there was little dissent from the backbenches – reflecting the new consensus that the Prime Minister is safe (in the absence of an attractive alternative).

And May, whose jokes sometimes fall painfully flat, was able to accuse Corbyn of saying "one thing to the many and another thing to the few" in reference to his alleged Trident comments to Glastonbury festival founder Michael Eavis. But the Labour leader, no longer looking fearfully over his shoulder, displayed his increased authority today. Though the Conservatives may jeer him, the lingering fear in Tory minds is that they and the country are on divergent paths. 

George Eaton is political editor of the New Statesman.

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