The Office of National Statistics has released information showing that income inequality is at its lowest rate since 1986.
From the BBC:
The largest fall during this period was a 6.8% drop for the richest fifth of households. They still had an average income, before tax and benefits, of £78,000 in 2011-12.
This was 14 times greater than the poorest fifth of households, who had an average income of £5,400. However, this group has seen their average income rise by 6.9% since the economic downturn.
After all taxes and benefits were taken into account, the top fifth of households had an income of £57,300, compared with £15,800 for the poorest fifth – a ratio of four-to-one.
The ONS has produced a nifty infographic to show the current situation:
The biggest fall in income inequality in 27 years is certainly progress and would not have happened without the Liberal Democrats ensuring that tax cuts were aimed at people on low incomes, not rich dead people as the Conservatives wanted with their desire to cut Inheritance Tax. To have achieved a fall in a time of economic turmoil is also worthy of credit. You don’t expect the Tories to give two hoots about equality, but Labour, which is supposed to believe in social justice, should have done better in their 13 years in power. This infographic shows that it’s in fact the Liberal Democrats who are starting to turn things around:
However, this is a baby step or two down a very long road. How on earth do households cope on an income of £5,400 as the poorest fifth must? Our dream of a “fair, free and open society where no-one is enslaved by poverty, ignorance or conformity” is a long way off. We might say that we have done better than Conservatives or Labour governing alone. We’d be right. The raising of the tax threshold and the Pupil Premium have been instrumental in that. But this is not the time to sit back and relax. These figures show a need to roll up our sleeves and get on with the job of tackling poverty.
* Caron Lindsay is Co-Editor of Liberal Democrat Voice and blogs at Caron's Musings