A detailed and startling analysis of how unequal Britain has become offers a snapshot of an increasingly divided nation where the richest 10% of the population are more than 100 times as wealthy as the poorest 10% of society.
The man largely responsible for the traversty, Gordon Brown, described the paper, as "sobering", saying: "The report illustrates starkly that despite a levelling-off of inequality in the last decade we still have much further to go." We has a long way to go, he doesn't. He probably only has a few weeks left in power, but the opposition is little better.
The report, An Anatomy of Economic Inequality in the UK, scrutinises the degree to which the country has become more unequal over the past 30 years. Much of it will make uncomfortable reading for the Labour government, although the paper indicates that considerable responsibility lies with the Tories, who presided over the dramatic divisions of the 1980s and early 1990s.
Britain had reached the highest level of income inequality since soon after the second world war. Tthe top 10% of the population stands at £853,000 and more – over 100 times higher than the wealth of the poorest 10%, which is £8,800 or below (a sum including cars and other possessions).
When the highest-paid workers, such as bankers and chief executives, are put into the equation, the division in wealth is even more stark, with individuals in the top 1% of the population each possessing total household wealth of £2.6m or more.
Commissioned by Harriet Harman, minister for women and equality, the report was led by Prof John Hills, of the London School of Economics. The report is more ambitious in scope than any other state-of-the-nation wealth assessment project ever undertaken.
It concludes that the government has failed to plug the gulf that existed between the poorest and richest in society in the 1980s. "Over the most recent decade, earnings inequality has narrowed a little and income inequality has stabilised on some measures, but the large inequality growth of the 1980s has not been reversed," it states.
Hills said: "These are very challenging issues for any government because the problems are so deep-seated." "But we hope that by doing this work, policy makers have now got information they never had before, to try and get at the roots of some of those problems."
The significance of where you live is another theme. The panel says the government is a "very long way" from fulfilling its vision, set out in 2001, that "within 10 to 20 years no one should be seriously disadvantaged by where they live". The paper notes "profound and startling differences" between areas. Median hourly wages in the most deprived 10th of areas are 40% lower than in the least deprived.
The government have utterly failed to address the issue, bankers are still getting their huge disproportionate bonuses where in many cases they should be sacked or charged with negligence.
PFI/PPP rake in billions straight out of government coffers facilitated by Gordon Brown, future generations will be paying for his mistakes.
How can a Labour Government be proud that till recently the wealthiest pay tax at a lower rate than their office cleaners? Multi-millionaire chiefs of private equity firms to pay as little as 10 per cent tax on their earnings.
Nicholas Ferguson, chairman of SVG Capital, said "Any commonsense person would say that a highly-paid private equity executive paying less tax than a cleaning lady or other low-paid workers can't be right". "I have not heard anyone give a clear explanation of why it is justified."
Paul Kenny, general secretary of the GMB union, added: "Top private equity chiefs are freely admitting that the current tax regime allows them to pay less tax than the minimum wage worker. This is an important and significant breaking of the ranks."
'Fair is worth fighting for' is what the Green Party say. That the richest should pay more tax than the poorest seems so obvious that it shouldn't even need saying. But it needs to be said, or the cronies of those in power continue with the way things have been.
5 years ago
2 comments:
I think, although I am prepared to be wrong about this, that private equity bosses pay such low rates of tax as a result of the treatment of the risks they take with their own money in their investments, i.e. they are taxed at capital gains rates as would anyone else be who invested money in similar ways.
Regardless of that, however, the problem with looking to tax to top 10% of earners much more highly than the 40% tax that most of them pay is that they will simply stop working beyond a certain level of remuneration OR they will use their position within their companies to simply increase their gross pay levels higher, which will make the headline inequality rates worse.
Of course, one of these leads to a reduction in the tax take whereas the other increases it.
Brown has already increased the top rate to 50%, no sign of top earners leaving or the opposition changing it.
Giant corporations pay even less tax, because they can pay the best accountants for tax avoidance. Google famously will not pay any corporation tax on its £1.6bn advertising revenues in Britain.
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