That’s the headline in The Guardian:
A report published by the Institute for Public Policy Research North shows polarisation between rich and poor was rising even before the recession of 2008 took hold…
The report found that, of the northern regions, the north-west has the greatest pay inequality, with the top 20% earning £427 more a week than the bottom 20%.
The greatest disparities are found in London, where the top 20% earn £686 more a week than the bottom 20%.
You can read the full story here.
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9 Comments
Both the Tories and the Lib Dems criticised the last Labour government for increasing inequality when they were last in office. A key test for the Coalition is whether they reverse that trend.
The price in not doing so will be a high one, as both the article and The Spirit Level demonstrates.
It will mean more pressure to spend more on the police as crime increases, more money on the NHS to treat problems like alcoholism and obesity and so on. It will mean a less liberal society, which will be a bitter legacy of our record in office.
If you want to reduce inequality then the Tories are not our natural allies in seeking to achieve this. Inequality grew much more when the Tories were in office.
If the Coalition fails to reduce inequality, we should make sure equality is the top of our agenda in any future coalition negotiations, and we should say no to parties who do not want to help us achieve this.
The period in which the lowest proportion ever of national wealth was held by the top 1% and top 10% was in the mid-eighties.
So to make a sweepingly generalised statement like “Tories are not our natural allies in seeking to achieve [reducing inequality]” is, whilst not atypical of Geoffrey, not entirely accurate.
Now sure, that statistic needs unpacking: was it because the country was so economically devastated that the sort of assets the top 1% and 10% owned was wiped out? was it because through housing market reform, selling off of state enterprises and so on increased the share of wealth owned by the bottom 50%? I don’t know the answer here, but it is just not right to say Tories can’t reduce inequality given that statistic.
The viscerally anti-Tory will probably say “oh well, that was the result of Labour’s previous term and it just took the Tories a decade to start grabbing back that wealth for the richest”. But I think you’ll need evidence!
On the whole, I think it’s quite unlikely that any of the past governments have had any real impact on this (or even attempted to make one), and the historic variations have been little more than the whims of the market.
I tend to agree with that Andrew, however, that mid-eighties peak in wealth ownership by the bottom 50% (it peaked at, I think, 7% of all wealth and is back down to 1% now) does at least co-incide with a government whose policy was to widen ownership of assets and did so by ensuring a new generation of home and share ownership. Before writing it off as a market blip, one does have to consider whether it was coincidence or policy.
“The period in which the lowest proportion ever of national wealth was held by the top 1% and top 10% was in the mid-eighties.”
I’d be surprised if that was true, you don’t give a source. However even if it is true it rather illustrates the danger of looking at snapshot measures rather than tracking statistical trends. There is absolutely no doubt that income inequality rose rapidly between 1979 and 1990. Income inequality stayed more or less the same through the first
Labout govt, fell significantly during the second and rose again during the third term to leave inequality slightly higher by 2009 than it had been in 1997.
So overall not a great record for Labour but supporters of the largely Thatcherite policies of the Coalition should recognise that income inequality is almost certain to rise at a rapid rate between 2010 and 2015 as a direct result of govt policy.
http://www.earlhamsociologypages.co.uk/incomednewlab.htm#Trends
As our economy loses its manufacturing base this problem will continue to grow.At present young unskilled boys can no longer learn a trade and become skilled workers in manufacturing.Now we are a service and property based economy.This policy pursued by both tory and labour governments have made the income gap between rich and poor grow ever wider.
Young boys and girls from britain’s housing estates need to know they can get training and become skilled workers in a real trade with real prospects of jobs.Otherwise the situation will only get worse.
AndrewR, first, you’ll note I was referring to marketable wealth rather than income, for sure, not what the OP was referring to. Second, source is the ONS Social Trends reports, but I can’t be bothered to find a link now for it. Third, it is a time series data which shows the share of wealth owned by the top 1% falling steadily, to a low point in the mid-eighties (and a concomitant high point for the share of wealth held by the lowest 50%) which has been reversing ever since, to the point where whereas the lowest 50% owned a shocking 7% of marketable wealth in the UK in the mid-eighties, they now own a disgraceful less than 1%.
Greg, whilst a popular one, your negative comment about UK manufacturing is not, in fact, true. We may no longer be metal bashing, but we remain the sixth largest manufacturer in the world. Not metal bashing is a good thing, as division of labour and comparative advantage means that these more menial manufacturing tasks go to countries less well technologically developed.
Oops – there appears to have been a problem with the link I tried to post.