Redistribution of income and wealth

Table 1 shows the effect of cash benefits and taxes on household incomes in the UK in 2020–21.

_{Source: Office for National Statistics}

Which one of the following can be concluded from the data in Table 1 regarding the distribution of income between the top and bottom quintile of households?

Extract F (lines 1–2) states that ‘Charities and think tanks have called for action to reduce job insecurity, lower housing costs and increase earnings for low-paid workers.’

Using the extracts and your knowledge of economics, evaluate policies that could be used to reduce in-work poverty in the UK.

Evaluate whether the best way to reduce inequality in disposable income is to reduce differences in pre-tax incomes rather than through taxes and welfare benefits.

Extract E (lines 3–4) states: ‘significant pay gaps remain, even when education and occupation are taken into account, particularly for those born outside the UK.’

Using the extracts and your knowledge of economics, evaluate possible government policies to reduce the ethnic pay gap.

Evaluate the view that government intervention to reduce inequality will lead to an improvement in economic welfare.

Which one of the following policies is most likely to have an immediate effect in helping to reduce the amount of poverty in the UK?

To what extent can the problem of poverty in the UK be solved through the operation of market forces? Justify your answer.