Stats and Stories: The True State of Inequality in the UK

Yesterday’s release by the Office for National Statistics (ONS) provided a mixed picture about the state of disposable incomes and inequality in the UK. The ONS continues to show that inequality has declined slightly in recent times but their statistics have been questioned by various commentators, notably the Resolution Foundation, for under-estimating the scale of top incomes. The whole debate was neatly summed up in a recent article by Larry Elliott in the Guardian. ​The ONS figures are seized upon by various politicians and commentators who are keen to downplay the issue of inequality and who probably think it’s a non-issue anyway. ​Leaving aside the statistical catfight for a minute, there are two other major problems with the “inequality is falling” argument. 

The first problem is one of focus. If you look at the oft-used measure of inequality, the Gini co-efficient, going back to the early 1990s you get a picture of inequality bobbling up and down a bit but always within a high range that still leaves the UK as one of the most unequal of developed countries. If you zoom out further and look at the picture back to the 1960s and 1970s or even over the whole century you get a different picture. Focusing on the “bobbly bit” from the early 1990s onwards and omitting to mention the surge in inequality in the 1980s is a piece of bold misdirection of which most magicians would be proud – a sort of “look over here, don’t look over there” approach. 

And if you go back to the early 20th century you will see a big U-shape on the graph that shows that inequality in recent decades has returned to the heights seen in the 1920s. So, while it might not be statistically correct to say that inequality is increasing or surging in the UK (although highly respectable forecasts say it will soon) it is clearly too high and it is entrenched. No serious attempt has been made by any UK government to undo the catastrophic rise in inequality that we experienced during the 1980s and which left us with many of the social ills we face now, e.g. a totally iniquitous and utterly broken housing market.

​The second problem is one of ​experience. If pictures can paint a thousand words then stories can paint a thousand statistics. When people are living in a country disfigured by increasing homelessnesshunger and poverty it is hard to tell them that the country is getting more equal. And if you then add in greedy corporate bosses and tasteless ostentation at the top end of the income scale it becomes even harder to convince people that they are living in a fair and decent society. But people who tend to dismiss the importance of inequality tend, themselves, to live in comfortably resourced bubbles which insulate them from the experiences of people struggling around them. It appears that out of sight really is out of mind. 

So whatever the statistics say, the reality and the perception in the UK at the present time is that too many people are losing out while a minority are doing very nicely and a few are acquiring riches beyond the dreams of avarice. This is pulling the UK apart, as evidenced by our febrile and fractious politics and our wider, angry culture wars and degraded social discourse. Material differences create social distances and unless we reduce our vast economic inequality we will continue to fail to build the necessary trust, social cohesion and sense of common purpose that is desperately needed to improve our society. 

Bill Kerry – Supporters & Local Groups Manager

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