Did the inner party live like the rest of the party? Why this policy?

No, the Inner Party did not live the rest of the Party. The small Inner Party lives luxuriously, with servants and lush, well-furnished apartments. Party members, on the other hand, live in run-down single-room apartments with no amenities and low-quality, tasteless food. The proles live in absolute poverty. The chasm between poverty and wealth in the novel is striking, and is most noticeable during Winston's forays into prole society. The buildings the proles live in are decaying, and the city of London is filled with bombed-out ruins. While the Inner Party comforts itself with luxury, the citizens of Oceania suffer, getting by with the bare minimum in a dying city.

Orwell presents this dichotomy to demonstrate how totalitarian societies promote the wealth of the ruling regime while decreasing the quality of life for all other members of society. Such governments often tout their hopes for establishing an equal society when in reality the separation between their living conditions and those of the citizens is vast. Winston looks out on the city of London and sees a dying world. Meanwhile, O'Brien looks out on the city of London and sees a society trapped in a single moment in time, defined and controlled by the Party.