UK faces the highest inequality levels for 40 years

[Rambuchan]

Here is news of yet another report, this time from The Joseph Rowntree Foundation, confirming that Britain's wealth divide is growing. Indeed Channel 4 news pointed out that the gap between rich and poor grew as fast under Tony Blair as under Margaret Thatcher.

As always, it seems that the results of policies under the current Labour government in this regard need some qualification:

"fewer are very poor" but "more households have become poor over the last 15 years" and "‘average’ households (neither poor nor wealthy) have been decreasing in number".

Here is the link to the report itself.

A divided country: study reveals growing UK wealth segregation

Lucy Ward, social affairs correspondent
Tuesday July 17, 2007
The Guardian

Poor and wealthy households in Britain are becoming more and more segregated from the rest of society as the UK faces the highest inequality levels for 40 years, according to a study published today.

A report by the Joseph Rowntree Foundation provides a groundbreaking geographical analysis of changes in the distribution of wealth over time, and reveals an increasingly divided nation.

It shows that already rich areas - particularly the south-east of England - have become disproportionately wealthier over four decades, while in areas of some cities more than half of all households are now "breadline poor", on a level of relative poverty with enough to live on but without access to opportunities enjoyed by the rest of society, yet above the level of absolute poverty, or "core poor".

"Poor, rich and average households became less and less likely to live next door to one another between 1970 and 2000," says the study, Poverty, Wealth and Place in Britain, 1968 to 2005.

Urban "clustering" of poverty has increased, while wealthy households have concentrated in city outskirts. Meanwhile, the number of average households - those categorised as neither poor nor wealthy - has been shrinking.

The 1990s saw the two poverty measures diverge, with the number of households identified as breadline poor continuing to rise, and the core poor falling from a peak of about 14% of households to around 11%. During this period, the personal wealth held by the richest 1% of the population grew as a proportion of national share, rising from 17% in 1991 to 24% in 2002.

Public frustration at such a divide is also running high, a linked Rowntree study establishes. Almost three-quarters of people in a 2004 British Social Attitudes survey think the gap is too large.

The scale of the challenge facing Gordon Brown's government as it attempts to tackle inequality is underlined by the study's conclusion that the picture since 2000 is extremely mixed.

The employment minister, Caroline Flint, said: "Our commitment to ensuring everyone shares the nation's increasing wealth has resulted in the rising trend of inequality recently stabilising. Since 1997, 600,000 children and over 1 million pensioners have been lifted out of poverty."

Guardian

Kindly discuss the findings of this report.

 

[amadeus]

If you want to earn as much as your counterparts 40 years ago, I think you'd be less than satisfied with the outcome.

 

[Brighteye]

I'm impressed at the difference between this report and the BBC one. I've never been a fan of the Guardian though.

 

[Stapel]

The point is that poor is a relative meaning. That's one thing I don't like about leftwingism: there's a thin line between solidarity and jealousy!

I'm all for my tax-money being sent to those who really need it, even if they screwed up themselves. But these days, being poor is too often confused with not being able to celebrate holidays abroad or or not being able to allow oneself a widescreen TV-set.

The meaning of poor has seriously suffered from inflation. I guess that is a good thing, not?

 

[LordRahl]

What Socialists seem to be always forgetting is that under Capitalism everybody gets richer, some people just get richer faster (hence the increasing gap). If they had their way the gap would be smaller, but everybody would be poor.

 

[Mr. Dictator]

What Socialists seem to be always forgetting is that everybody gets richer, some people just get richer faster (hence the increasing gap). If they had their way the gap would be smaller, but everybody would be poor.

what you seem to be always forgetting is that not everyone who speaks out against the income gap is a socialist.

though it is always easy for the laziest to pigeonhole.

 

[GinandTonic]

The real worry here is the shrinking of the midleclasses. No good for anyone.

 

[happy_Alex]

Sad findings it has to be said. Though before we start Labour-bashing the report is over a a forty year period, from 1968 so this takes in alot of changes over that period

"The general pattern is of increases in social equality during the 1970s, followed by rising inequality in the 1980s and 1990s. Changes since 2000 are less clear"

from key points, http://www.jrf.org.uk/knowledge/findings/housing/2077.asp

This statement implies that there were increases in equality in the 70s, following progressive labour governments, presumably there's a gap between when policies are implemented and when the effectiveness of such policies can be measured.

Look a the next part of the statement "rising inequality in the 80s and 90s" ie following reactionary and regressive thatcherite policies. Then it says the picture in 2000s is less clear: just when the effects of Labour policies would be being felt.

In fact there have been many measures bought by Labour since 1997 when inequality genuinely were at record levels.
An earlier report from the Joseph Rowntree Foundation gives a more balanced view...

http://www.jrf.org.uk/pressroom/releases/120105.asp

Spoiler :

New Labour turns the tide of poverty, but inequality still runs deep

New Labour has taken poverty and social exclusion very seriously and made genuine progress in reducing disadvantage, especially among families with children. But an independent, in-depth assessment of the Government’s record on social exclusion since it came to power warns that although the tide has turned in key areas, Britain remains a very unequal society.

The new study, by a team of members and associates of the Centre for Analysis of Social Exclusion (CASE) at the London School of Economics, is being launched today at a seminar organised by the Smith Institute. Its detailed review of policy areas includes education, employment, health and neighbourhood renewal, as well as economic disadvantage. It draws on more than 500 separate sources from evaluations of policy initiatives, government reports and statistics, and academic studies.

A more equal society? observes that in 1997, when New Labour was first elected, poverty and inequality had reached levels unprecedented in post-war history. The Government’s commitment to tackling social exclusion has been in contrast to its predecessors and includes high-profile targets for cutting child poverty and ensuring ‘over 10 to 20 years’ that no one will be seriously disadvantaged by the place where they live.

Where Government has concentrated its efforts, the study suggests there is now clear evidence of progress. Child poverty has been reduced by its tax and benefit reforms. New analysis of spending patterns also shows that low-income families with children, who have benefited most from the reforms, have increased spending on goods for children, such as clothing, footwear, games and toys, as well as on food (but their spending on alcohol and tobacco has not increased).

But the study argues that there are gaps in the Government’s strategy in other areas. For instance, the latest available figures show that poverty among working-age adults without children has reached record levels. While some vulnerable groups have been the target of special initiatives, others have not. And in the case of asylum seekers, government policies have actively increased social exclusion, especially in relation to employment, income and housing.

Prof John Hills, Director of the Centre for Analysis of Social Exclusion and co-editor of the study, said: “There are substantial differences between the policies pursued in the years since 1997 and those followed previously. In some of the most important areas, the tide has turned and policy has contributed to turning that tide. This is no mean achievement.

“However, it does not follow that policy has already succeeded, or that Britain has yet become a more equal society. In virtually all of the areas discussed there is still a very long way to go to reach an unambiguous picture of success. Sustained and imaginative effort will be needed to make further progress and to reach groups not touched by policy so far.”

The study, published by The Policy Press, and its contributing research were supported by the Joseph Rowntree Foundation and the Economic and Social Research Council. The key areas under examination include:

Child poverty: Tax and benefit changes mean that the Government is on track to hit its target of reducing the number of children living in relative poverty by a quarter of its 1998/9 level by 2004/5. Nevertheless, relative child poverty levels are still greater than the average for the (pre-enlargement) European Union, and a long way above the ultimate target of being ‘amongst the best in Europe’.

Working-age poverty: Relative poverty among working-age adults has only fallen slightly overall since 1996/7– and increased among those without children to a record level in 2002/3. Although many employment measures have been successful and registered unemployment has fallen substantially, significant numbers are dependent on state benefits whose value has been frozen.

Pensioner poverty: Changes in the real value of state benefits for older people are helping to achieve a significant reduction in the number of pensioners living in relative poverty. However, the potential for more generous support, through the means-tested Pension Credit, to bring further reductions depends on levels of take-up.

Income inequality: Reducing overall income inequality has not been a New Labour aim, and it has neither risen nor fallen significantly since 1997. The gap between those at the very top and those at the very bottom has increased, but the gap between those near the bottom and those near the top has fallen a little. However, if the Government had left the tax and benefit system as it was when it took power, the inequality gap between rich and poor would be far greater than today.

Employment: Registered unemployment is at its lowest level for 30 years and long-term unemployment is among the lowest in Europe. However, the ‘New Deals’ may have lost steam, and outside the count of those actively seeking work ‘economic inactivity’ rates have only fallen slowly for working-age women and have increased for men.

Education: Class sizes have fallen and the numeracy and literacy strategies in primary schools have been positively evaluated. Primary school achievements have improved, with poorer schools showing the greatest improvement. At secondary level the picture is more mixed. Overall, strong social class differences in attainment remain and may even have worsened in terms of university access.

Health: Health inequalities have been a major focus of analysis, and the formula for allocating NHS resources between areas has become better tuned to the needs of disadvantaged communities. But other policies have been rather vague or limited. It is too early to judge the impact of recent policies, but there is little evidence yet from time trends of narrowing gaps between social groups.

Poor neighbourhoods: Data for the poorest local authority areas as a whole suggest that services and key indicators are improving, and in some cases closing the gap with other areas. But despite progress, substantial differences remain between areas, and not all poor neighbourhoods are improving. Particular initiatives, such as Sure Start, are popular with residents, but crime is a recurring concern, and many feel they have no influence over decisions that affect them.

Ethnic inequalities: Despite evidence of improvements for most ethnic groups in the past seven years, inequalities remain high in many dimensions, and there have been big differences between minority groups. For example, there has been a clear fall in the proportion of the Indian population and black, non-Caribbean people with incomes in the poorest fifth of the population, but no decline in the very high proportion of the Pakistani and Bangladeshi population with low incomes.

Vulnerable groups: There has been progress tackling problems among targeted vulnerable groups as varied as children at risk of school exclusion and rough sleepers. Other vulnerable groups, such as older pensioners and disabled children, have not been selected for special attention. In the case of asylum seekers, Government policy has actively sought to reduce rights to income, employment and housing. This runs in the opposite direction to nearly all other policies assessed in the study.
Dr Kitty Stewart, a Research Fellow at CASE and co-editor of the study, said: “While highlighting evidence of undoubted progress, our assessment of the Government’s record reveals recurring problems. These include the conflict between targets for raising standards for all, and those that aim to reduce differences between disadvantaged groups. For example, overall improvements in health and education can leave the most disadvantaged lagging even further behind.

“Other problems relate to the growth of means testing, where a focus on those ‘in greatest need’ may be thwarted by low take-up, or create new disincentives to work or save. At the same time, the continuing decision to link social security benefits and tax credits to prices, rather than living standards, has created problems for groups like childless working-age claimants who do not receive any extra, targeted help. More generally, there is no overall strategy for ‘poverty proofing’ policies to ensure that action for tackling social exclusion is treated as a mainstream priority in every area of government.”

Basically saying that Labour policies have made a difference when compared to previous policies, but that there is still some way to go.

Additionally, althought there is heaps more expectation on Labour to deliver a perfect society, they still have to work around circumstances and complexities of the matter. Labour is still restrained from dramatic redistribution taxation by the electorate and can only work within the mandate given to them by the public.

In other words, when asked "is inequality in the UK to great? " people may well answer "yes it is". Try asking them next if they want to pay more taxes.

 

[MobBoss]

Why is success bad?

 

[happy_Alex]

where did anyone say success was bad?

 

[MobBoss]

where did anyone say success was bad?

Thats what I get when I read the story and posters comments. Apparently, they dont like rich people very much over there in the UK.

 

[Stapel]

Alex, what's so important about equality? To put it simple (I know, too simple):

If half the population is rich, and the other half extremely rich, we're all rich, right?
Or do we rather see all doing equally fair.

Serious: equality is really a useless issue!

 

[Brighteye]

I read the BBC's report, and it was rather kinder to Thatcher than Happy Alex, and a lot less supportive of the recent Labour governments, which seems really quite appropriate to me.
The Guardian, on the other hand, avoids relating the conclusions to actions of previous governments, only mentioning it as a challenge for Gordon Brown. After all, if you support Labour but come across something that makes it look bad, you don't dig into the detail.
Not that previous governments matter as much as everyone seems to think. Current policies and promises are a lot more important.

 

[cthom]

the problem comes into focus when you learn that several extremely wealthy individuals pay less income tax than the cleaners they employ. one is reported to be embarrassed by this fact, but not embarrassed enough to actually redress the balance.

http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=459766&in_page_id=1770

 

[Rambuchan]

The meaning of poor has seriously suffered from inflation. I guess that is a good thing, not?

Sure, it's good that more people are enjoying a higher standard of living nowadays. However, my primary concerns with the findings of this report are:

~ More than half of all households in areas of some cities are now "breadline poor", ie. "people living below a relative poverty line, and, as such, excluded from participating in the norms of society" (< words of the report itself).

~ Those folks don't have access to opportunities enjoyed by the rest of society (housing and education are key issues at play here).

~ Ghetto-isation of British society / social exclusion.

~ Abuse of power that comes with extreme wealth in the British social hierarchy.

~ Public frustration at such a divide at 75&#37;.

~ Where it is taking us.

 

[Merkinball]

The only thing that people should be concerned about is if the poor are improving. It certainly appears that the poor have improved, just not as much as the rich people. Which seems pretty natural for me. It's a lot easier to invest money to make more money, when you already have it. And this shouldn't be discouraged.

Absolute poverty? HA! I got news for whoever wrote this article, absolute poverty is absolutely non-existant in the UK.

 

[skadistic]

Cut taxes on the poor. That'll help them. Wait that will take away the dole.

 

[C~G]

The only thing that people should be concerned about is if the poor are improving. It certainly appears that the poor have improved, just not as much as the rich people. Which seems pretty natural for me. It's a lot easier to invest money to make more money, when you already have it. And this shouldn't be discouraged.

The main thing here is exactly what you described and the main problem comes from that fact. People have just miscalculations where it leads to.
Improvement of the poor should be compared to the national average of living not only to where they have been before.
Accumulation of wealth to particular folks and it's multiplying effects into several social issues is the most difficult spell to break.

Cut taxes on the poor. That'll help them. Wait that will take away the dole.

Tax cuts only to poor?
What are you?
A socialist?

Rambuchan, I don't believe this reflects anything more but bigger trend in way of living coming to current millenium and that most of the policies are completely inequal in competition towards the free market principles and also severely non-resistant to the meme I talk about below.

Why is success bad?

The problem isn't with success but that the continuos success of particular group of people will lead into elitist society. Nobody is expecting superior equality but the effect over time like is that some people lose the chance of being succesful or it turns into matter of lottery ticket.
It doesn't have to anything to do with hard work or being brainy that leads to success but more likely that you need nice lottery ticket of life to get anywhere in certain conditions. This is the "american dream"-illusion. Some people believe all their life their life will be better mainly because of these ideological ideas. I bet europeans in general are almost totally immune to this brainywashy meme and that is why they consider some social programs to be quite important in their society.

I don't see that it creates incentives for certain people to try anything since their chance of success is so small compared to other people. In turn they decide they are better just live in small ways or give up entirely. I look this as severe handicap not only to invidual but also to society itself in general since people aren't able to fulfill their possibly potential. Just like hardcore socialism, uber capitalism doesn't create enough incentives to live your life in your fullest potential and maximum benefit for certain folks.

The idea that uber competition (and widening of the gap) creates the most succesful society in general is the biggest baloney I have heard. You need always balance in order to create incentives also to the less fortunate in order to make them even try. This leads also to less social turmoil example when it comes to immigrates.

It's no wonder poor immigrants have high crime rates, the simple reason is that the chance of success in other ways is extremely small and their option limited. It's simple game theory really.

 

[ComradeDavo]

See, it's reports like this which make me back the Lib Dem proposals which I made my thread about.

As I said in that thread, low and middle earners are effectively paying for high earners lifestyles.

 

[amadeus]

If there was no high earning people (I'm glad you now admit that they earn that money) in the UK, what do you think the condition of the lower and middle income classes would be?