Finance In UK Stats

In a further blow, the government failed to make a dent in the number of children or pensioners living in poverty after big increases the previous year. Almost 17,000 more children in England are on free school meals this year compared with last, according to government data also published yesterday.

About 15% of pupils in state schools are now entitled to free school meals because their parents receive welfare payments or earn below £15,575 a year, the figures show. Last year, 14.5% of pupils were eligible.

Even before the onset of the UK's deepest recession in a generation, official figures showed that only the better-off families were spared from a squeeze on living standards that saw median income virtually unchanged and fresh cuts in real pay for those on the lowest salaries.

Since Tony Blair's third election victory, the poorest 10% of households have seen weekly incomes fall by £9 a week to £147 once inflation is accounted for, while those in the richest 10% of homes have enjoyed a £45 a week increase to £1,033.

The data shows that the second poorest 10% of households has also had to make do with less since 2005. Overall, the poorest 20% saw real income fall by 2.6% in the three years to 2007-08, while those in the top fifth of the income distribution enjoyed a rise of 3.3%. As a result, income inequality at the end of Labour's 11th year in power was higher than at any time during Margaret Thatcher's premiership.