This unequal and fractured Kingdom


“Despite the promises of neo-liberals, enormous accumulation of wealth by the few has not ‘trickled down’ to the many. Instead, social and economic deprivation is increasing further because of the cost-of-living crises, the pandemic & impact of Brexit on trade and industry.”

Barry Rodin, Orpington CLP, looks at how inequality has worsened in Britain.

Britain has the 5th biggest economy in the world, with a gross domestic product of nearly US$2.8 trillion. Unfortunately, such immense wealth does not translate into delivering the 5th highest average standard of living and rising prosperity. Quite the reverse is true, with many families currently experiencing an unprecedented fall in living standards, with forecasts of 1.3 million more people plunging into absolute poverty by 2023.

The International Comparison Project, published by the World Bank, ranks the UK in 2020 only 11th among European countries for material well-being. This is defined as actual individual consumption per capita on goods and services, including housing, health care, recreation and culture, education, and social protection.

Moreover, the UK is one of the most unequal societies in the developed world. An indicator of how evenly wealth and income are distributed throughout the population is the Gini index. With an index of 0.37, the UK is ranked 6th most unequal out of 38 OECD member countries; USA, the cradle of neo-liberalism, ranks 5th. Unsurprisingly, perhaps, wealth is more evenly distributed in the Nordic countries.

As inflation rises (forecasts are between 7% to 9% for 2022), inequality will increase; for example, the poorest suffer more due to highest price increases on essentials, which make up most of their shopping basket.

Wealth (including assets such as property, bonds and stocks, and private pension investments) is even more unequally divided. The richest 10% of UK households hold 44% of all wealth. The poorest 50%, by contrast, own just 9%. For the UK as a whole, the World Inequality Database reported the top 0.1% saw their share of total wealth double between 1984 and 2013, reaching 9%, a trend continuing today.

Despite progress in redistributing wealth during the post war boom between 1950 and 1970, this trend reversed after neo-liberalism took hold. Weakened collective bargaining and the emergence of precarious employment has contributed to greater inequality.

The TUC Touchstone Extra publications illustrate how Britain compares even less favourably on welfare provision among wealthiest countries, particularly for those relying on benefits for subsistence, including disabled people.

Wealth is also unevenly spread across regions. The South East is the wealthiest region with median household total wealth approaching £400,000, over twice the amount for households in the North West and North East. There are some areas in the North and Midlands that are as poor as the American state of Alabama or the former East Germany. Britain is a world leader in regional inequality!

In addition to income and wealth there are other important international measures of well-being, such as life expectancy and work-life balance.

Although the past hundred years has seen a rise in life expectancy for both males and females, 2011 marked a turning point, with improvements tailing off after decades of steady progress. In the 100 years to 2010–12, life expectancy increased by nearly 3 years every decade, but between 2011–2018 it improved by only 0.5 years for males and 0.2 years for females, virtually flat-lining between 2014–18. The pandemic and cost of living crises are now adding to the harmful effects of continuing austerity on life-expectancy.

Once again there are huge regional inequalities although median life expectancy for women in Britain’s richest areas is second highest in a league table in 38 OECD member countries, it dramatically falls to second to bottom (only Mexico is worse) in England’s poorest areas.

For work life balance, (including percentage of people working very long hours) Britain, alongside the USA, again fares badly, being ranked 26th and 27th respectively out of 38 OECD countries.

Despite the promises of neo-liberals, enormous accumulation of wealth by the few has not ‘trickled down’ to the many. Instead, social and economic deprivation is increasing further because of the cost-of-living crises, the pandemic and impact of Brexit on trade and industry. These conditions aid the divide and rule tactics of populists and reactionaries.

It is therefore vital to continue the work started five years ago in the Labour Party on developing a unifying transformative and progressive agenda. This must include environmentally friendly regional development, improved transport and education and introducing a universal basic income to alleviate poverty and reduce inequality.

  • This article originally appeared in Labour Briefing (Co-operative) magazine and is reproduced with permission. Subscribe by sending a £20 cheque with your address to ‘Labour Briefing Co-operative Ltd’, 7 Malam Gardens, London, E14 OTR.
Featured image: Foodbank queue in London. Photo credit: Newham Community Project

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