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UK's poorest pay greater share of tax than in '97

The poorest fifth of the British population would have been 531 pounds ($1,011) a year better off under tax and benefit policies for fiscal 1997 than they were in 2005, while the second-poorest fifth would have had an extra £ 427 annually, the Centre for Policy Studies said on its Web site. The calculations suggest that the Labour Party, which was founded with the aim of improving the life of the UK's lower classes, has actually favoured the middle class and some wealthier residents during its nine years in office. „The poorest households in Britain are now paying a higher share of taxes and getting a lower share of benefits than before Labour came to power,” the research group said. Almost 5 million households have an average income of £ 4,280 a year before taxes and benefits, making them the poorest segment of the population. These people pay an extra £ 56 ($107) in tax annually while having lost £ 475 in benefits since 1997. As a whole, the segment contributed 6.9% of all tax revenue in 2005, up from 6.8% in 1997, while its share of benefits has fallen to 27.1% from 28.1%, the study showed. Meanwhile the middle fifth of households have gained £ 613 annually and the second-richest fifth are better off by £ 847 a year, according to the group's calculations. In contrast, the very richest Britons are also paying more tax. The wealthiest fifth of the population contributed 42.8% of the country's taxes in 2005, up from 41.3% in 1997. The Centre for Policy Studies based its calculations on government figures. (Bloomberg)