Poverty and inequality in London worsen in 2000s

Poverty and inequality in London worsened during the course of the 2000s, particularly during the global recession from 2008 onwards, according to a new report from the London School of Economics.  

The study forms part of the 'Social Policy in a Cold Climate' research project charting developments in a wide range of social issues since 2007.

Key points

  • London coped relatively well with the economic pressures caused by the global crash. Economic output dipped less and recovered more strongly than in the rest of the country.
  • But inequalities in Londoners' earnings and incomes increased between 2006–2008 and 2010.
  • Those living on the lowest incomes were hit hardest, seeing their incomes after housing costs fall by 24 per cent in real terms – compared with 3.5 per cent nationally.
  • Changes in the geography of poverty were accelerated by the recession, with poverty tending to increase more in outer London boroughs than in inner London. By 2011, a slight majority (53 per cent) of those claiming means-tested benefits were in outer London, which also accounted for almost half the very poorest neighbourhoods.
  • Wealth inequalities also widened faster in London than in other regions. The wealthiest Londoners increased their financial, physical and property wealth by 8 per cent between 2006–2008 and 2010, compared with 0.4 per cent among their counterparts elsewhere.

London's economic success does not seem to have translated into lower poverty or reduced inequality for most of its inhabitants, it is concluded. The recession, despite its origins in the financial sector, seems to have worsened economic outcomes for Londoners who were already worst off, whereas better-off groups have been less affected. The return to growth in London raises questions, the authors say, about how this situation can be ameliorated.

: Ruth Lupton, Polly Vizard, Amanda Fitzgerald, Alex Fenton, Ludovica Gambaro and Jack Cunliffe, Prosperity, Poverty and Inequality in London 2000/01–2010/11, Social Policy in a Cold Climate Research Report 3, Centre for Analysis of Social Exclusion (London School of Economics)


Publication date: 
Jun 30 2013