Inequality must come down says the Resolution Foundation – adding its name to those of luminaries like Gary Stevenson, Richard Murphy and Faiza Shaheen who are demanding less for the super-rich and more for everybody else.
The Foundation’s Mike Brewer, in his last Top of the Charts email for the organisation, devoted it to explaining why inequality is important, despite claims by some politicians that the headline measure of inequality in the UK has not changed in many years – so inequality isn’t getting worse at all, right?
Wrong.
“Income inequality soared in the 1980s, and it has never come back down,” writes Mr Brewer.
Buy Cruel Britannia in print here. Buy the Cruel Britannia ebook here. Or just click on the image!
“The rise is a substantial one, enough to turn the UK from being internationally-mid-table (inequality-wise) in the mid-1970s to what it remains: one of the most unequal nations in Europe.
“And if inequality is a bad thing, then it’s the level that matters, not whether it’s rising or falling: if it was worth worrying about a generation ago, and it hasn’t shifted since, then it remains a problem today.”
He adds: “During the ‘Thatcher years’, income growth was very strong at the top, fair-to-middling lower down, and then outright negative at the bottom.
“Then during the nineties and noughties up to the financial crisis, the UK came close to shared growth, with income growth averaging 2 per cent a year across almost the whole range.
“Finally, the austerity-Brexit-pandemic years gave us income stagnation.”
The issue, says Mr Brewer, is that inequality is all about where people stand in relation to each other.
“If, for example, we register big gaps in living standards within our own town or among our contemporaries, then our sense of unfairness may be sharpened, irrespective of what is happening to income differentials nationwide,” he writes.
“Conversely, resentments flare up if members of one group can see they face a collective disadvantage with another. In Britain, equity between generations is a huge issue. In days gone past, not only did each generation enjoy wage progression as it aged, but each could expect to walk a higher path than their predecessors.
“But this progress breaks down for those born from the 1980s onwards.”
And then there is wealth.
“Of course, not everyone’s concept of their standard of living or financial position is based on their ‘disposable income after housing costs’. Wealth (savings, pensions and property) and debt matter too.
“Wealth is roughly twice as unequally distributed as income. It follows that when wealth becomes relatively more significant compared to income, and more consumption is funded from it, then living standards will diverge. This is exactly what has happened over the last half century, with the ratio of private wealth to national income having doubled from about 3:1 in the 1970s to about 6:1 today.
“This has led to widening wealth gaps.
“The gap between the top end and middle Britain was always at least a £1 million since the series began in 2006. But over the next 14 years it surged by about two-thirds to reach £1.65 million by 2020. It may have fallen back in the most recent years, as higher interest rates depress the value of big pensions and other assets, but even in 2024 we estimate the gap at £1.27 million, 17 per cent more than it was in 2006, 37 times more than typical household income, and unimaginably more than it would have been in the smaller wealth era of the more distant past.”
And remember: this is the gap between top-end and middle Britain. The gap between the top and the lowest income group is much, much larger.
The conclusion: “If we really want to make Britain feel better, we need to get inequality down as well as getting growth up.”
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Inequality must come down says the Resolution Foundation
Inequality must come down says the Resolution Foundation – adding its name to those of luminaries like Gary Stevenson, Richard Murphy and Faiza Shaheen who are demanding less for the super-rich and more for everybody else.
The Foundation’s Mike Brewer, in his last Top of the Charts email for the organisation, devoted it to explaining why inequality is important, despite claims by some politicians that the headline measure of inequality in the UK has not changed in many years – so inequality isn’t getting worse at all, right?
Wrong.
“Income inequality soared in the 1980s, and it has never come back down,” writes Mr Brewer.
Buy Cruel Britannia in print here. Buy the Cruel Britannia ebook here. Or just click on the image!
“The rise is a substantial one, enough to turn the UK from being internationally-mid-table (inequality-wise) in the mid-1970s to what it remains: one of the most unequal nations in Europe.
“And if inequality is a bad thing, then it’s the level that matters, not whether it’s rising or falling: if it was worth worrying about a generation ago, and it hasn’t shifted since, then it remains a problem today.”
He adds: “During the ‘Thatcher years’, income growth was very strong at the top, fair-to-middling lower down, and then outright negative at the bottom.
“Then during the nineties and noughties up to the financial crisis, the UK came close to shared growth, with income growth averaging 2 per cent a year across almost the whole range.
“Finally, the austerity-Brexit-pandemic years gave us income stagnation.”
The issue, says Mr Brewer, is that inequality is all about where people stand in relation to each other.
“If, for example, we register big gaps in living standards within our own town or among our contemporaries, then our sense of unfairness may be sharpened, irrespective of what is happening to income differentials nationwide,” he writes.
“Conversely, resentments flare up if members of one group can see they face a collective disadvantage with another. In Britain, equity between generations is a huge issue. In days gone past, not only did each generation enjoy wage progression as it aged, but each could expect to walk a higher path than their predecessors.
“But this progress breaks down for those born from the 1980s onwards.”
And then there is wealth.
“Of course, not everyone’s concept of their standard of living or financial position is based on their ‘disposable income after housing costs’. Wealth (savings, pensions and property) and debt matter too.
“Wealth is roughly twice as unequally distributed as income. It follows that when wealth becomes relatively more significant compared to income, and more consumption is funded from it, then living standards will diverge. This is exactly what has happened over the last half century, with the ratio of private wealth to national income having doubled from about 3:1 in the 1970s to about 6:1 today.
“This has led to widening wealth gaps.
“The gap between the top end and middle Britain was always at least a £1 million since the series began in 2006. But over the next 14 years it surged by about two-thirds to reach £1.65 million by 2020. It may have fallen back in the most recent years, as higher interest rates depress the value of big pensions and other assets, but even in 2024 we estimate the gap at £1.27 million, 17 per cent more than it was in 2006, 37 times more than typical household income, and unimaginably more than it would have been in the smaller wealth era of the more distant past.”
And remember: this is the gap between top-end and middle Britain. The gap between the top and the lowest income group is much, much larger.
The conclusion: “If we really want to make Britain feel better, we need to get inequality down as well as getting growth up.”
Vox Political needs your help!
If you want to support this site
(but don’t want to give your money to advertisers)
you can make a one-off donation here:
Be among the first to know what’s going on! Here are the ways to manage it:
1) Register with us by clicking on ‘Subscribe’ (bottom right of the home page). You can then receive notifications of every new article that is posted here.
2) Follow VP on Twitter @VoxPolitical
3) Like the Facebook page at https://www.facebook.com/VoxPolitical/
Join the Vox Political Facebook page.
4) You could even make Vox Political your homepage at http://voxpoliticalonline.com
5) Follow Vox Political writer Mike Sivier on BlueSky
6) Join the MeWe page at https://mewe.com/p-front/voxpolitical
7) Feel free to comment!
And do share with your family and friends – so they don’t miss out!
If you have appreciated this article, don’t forget to share it using the buttons at the bottom of this page. Politics is about everybody – so let’s try to get everybody involved!
Buy Vox Political books so we can continue
fighting for the facts.
Cruel Britannia is available
in either print or eBook format here:
The Livingstone Presumption is available
in either print or eBook format here:
Health Warning: Government! is now available
in either print or eBook format here:
The first collection, Strong Words and Hard Times,
is still available in either print or eBook format here:
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