Because more equal societies work better for everyone

Groundhog Day: UK Stuck In Rut Of High Inequality

Thursday, 16 March, 2017

This morning’s official Households Below Average Income statistics show that thanks to modest income growth across the distribution, the Gini measure of income inequality before housing costs has increased only slightly from 34 per cent to 35 per cent. While it’s not a statistically significant increase, what is hugely significant is that this is yet another year of failure to create a fairer society. You’ll see a lot of people today stating that inequality is the same as it was 25 years ago. For the avoidance of doubt, this is categorically not a good thing. That our current situation is comparable with inequality levels following a meteoric rise through the late 1970s and 1980s is no cause for complacency, let alone celebration.

Today’s release also reveals that the number of children living in relative low income households before housing costs has increased from 2.5 million to 2.7 million, the highest figure since 2008/9 and a worrying regression. Once housing costs are taken into account, we are left with the disgraceful figure of four million children in poverty, a number which the IFS recently predicted will soon rise to 5 million thanks entirely to impending cuts to social security.

It’s worth thinking about what an inadequate household income really means for family life. Not only does it affect how much parents can plan for the future, with well over half unable to afford to save even £10 a month, but it has an impact on the daily needs that many of us take for granted. Seventeen per cent of parents in the poorest fifth can’t always afford to keep the house warm, and 5 per cent can’t provide fresh fruit and vegetables every day for their children. It’s depressing to have to mention, every single year, the scandal that in this rich country there is even one child who goes without a warm winter coat.

All parents want to provide activities that help their children socialise, and learn to play and share with others, but 7 per cent of children in the poorest fifth can’t afford to attend playgroups, and for twice as many, the family budget simply wouldn’t be able to stretch to the kids having friends round for tea or a snack once a fortnight.

Those who question whether these items and experiences are important, or scoff at the idea that their absence counts as deprivation, should ask themselves why some children are deserving while others are not. More fundamentally, why can’t every one of us expect a decent standard of living? As we’ve asked before, ‘How poor do the poor have to be before you care about inequality?

Understandably, DWP isn’t shouting about these aspects of its statistics, choosing instead to celebrate an £8 higher average income which tell us nothing of the differences between us. The Department’s Social Justice Green Paper is expected any day now, setting out its proposals for creating a society that works for everyone. We have already urged the Secretary of State to use the Green Paper to recommend the commencement of section 1 of the Equality Act, which requires public bodies to assess the impact of their decisions on the inequalities of outcome that result from socioeconomic disadvantage. Potentially, this could mean that the Government would have to work harder to justify the effect of its cuts to Universal Credit.

This week the Chancellor showed policies aren’t always set in stone, with a U-turn on his Budget announcement on National Insurance contributions for the self-employed. We urgently need a U-turn on tax cuts for the richest and social security cuts for the poorest – active policies that are set to divide us and let the most vulnerable fall.

Lucy Shaddock, Public Affairs and Campaigns Manager

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