Noda Says BOJ Should Avoid Ending Credit Policy Early

By Gonzalo Vina

July 30 (Bloomberg) -- U.K. members of Parliament said the government hasn’t done enough to eradicate poverty among the 2 million poorest pensioners, embarrassing Prime Minister Gordon Brown who put the issue at the center of his agenda.

The Work and Pensions Committee including lawmakers from the three main parties said the government should make greater use of charities and voluntary groups and get local authorities to encourage applications for tax relief and public housing.

“There is still a lot to do,” Terry Rooney, a lawmaker from the ruling party who leads the committee, said in a statement in London today. “The government has committed to eradicating child poverty. Now they need to commit to eradicating pensioner poverty.”

Brown’s Labour government has struggled to close the gap between the rich and the poor since it took office pledging to equalize fortunes across social classes. Poor families are paying more tax and receiving fewer benefits today than they were in 1997, according to the Center for Policy Studies, a London-based research group.

The poorest households paid 7 percent of personal taxes in 2008 compare with 6.8 percent in 1997, according to the group created by Keith Joseph, a former Cabinet minister under Conservative Prime Minister Margaret Thatcher. They got 25.9 percent of benefits paid by the government last year compared with 28.1 percent in 1997.

Election Due

Brown, who must call an election no later than June 2010, is positioning his party as a champion of the poor, telling voters that David Cameron’s Conservatives would abandon them during Britain’s worst recession for 60 years.

Government statistics published yesterday showed government programs and the tax system are helping to combat inequality. The National Statistics office said the richest fifth before tax and benefits earned 16 times more than the poorest fifth in the year through March 2008. After tax and benefits, earnings were four times higher.

With voters deserting Labour, Chancellor of the Exchequer Alistair Darling in April said he would tax incomes above 150,000 pounds ($245,000) a year at 50 percent, 10 points more than the top rate when the party took office. The Treasury is struggling to curb a budget deficit that it expects to touch 12.4 percent of gross domestic product this year.

Inequality is moving up the political agenda. Some lawmakers and trade unions are calling for higher taxes on the super-rich and policies to curtail wealth creation. Brown has tried to combat the trend by increasing the minimum wage, using the tax system to lure the poor into work and spending more on education to improve the skills of workers.

To contact the reporter on this story: Gonzalo Vina in London at gvina@bloomberg.net;