Labour ‘improved public services but failed to close pay gap’

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Labour’s 13 years in power delivered major improvements in public services and reduced social inequality but failed to tackle the pay gap between the rich and the poor, according to academics.

Researchers found that despite the “myth that Labour spent a lot and achieved nothing”, Tony Blair and Gordon Brown left the Coalition with a legacy of lower poverty and a widely improved public sector.

The London School of Economics and Political Science’s study found that although spending went up by 60 per cent under Labour, the pre-crash levels were “unexceptional” domestically and internationally and national debt levels were lower than when the party took office.

Access and quality in public services improved, according to the LSE’s Centre for Analysis of Social Exclusion (Case) report.

Most of the extra spending went on improving services, including new hospitals, schools, 48,000 extra full-time equivalent teachers, 3,500 new children’s centres, and more doctors and nurses.

Overall, Labour saw results in areas it targeted cash, including reducing rates of child and pensioner poverty, cutting hospital waiting times, improving teacher-pupil ratios and boosting neighbourhood facilities. But there was no real change in overall levels of income inequality, wage inequalities grew at the top and poverty for working age people without children increased.

Case director John Hills said: “In a very different economic climate, Labour set out an agenda to raise outcomes overall, narrow socio-economic gaps and modernise public services. Many services were improved, and it achieved a striking narrowing of inequalities between different age groups.

“Nevertheless, when Labour left power there had been no real change in wider income inequalities and parts of its vision remained unrealised.”

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