Wednesday, January 27, 2010

Unequal Britain: richest 10% are now 100 times better off than the poorest.

It was always said that, under the government of Margaret Thatcher, the rich got richer and the poor got poorer, but that pattern hasn't really changed that much under New Labour, which brings us to the sobering statistic today where the richest 10% of the population are more than 100 times as wealthy as the poorest 10%.

Gordon Brown described the paper, published today, 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."

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.

It goes without saying that this is an embarrassment for New Labour, but the paper does lay the bulk of the blame with the Conservative policies of Margaret Thatcher, the woman who dismantled Britain's manufacturing infrastructure - putting millions on to the dole - whilst cutting taxes for the rich and encouraging the shareholder society.

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.

The report finds that the Labour government has managed to stabilise the gap between the rich and poor but has done very little to reverse it.
"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.
Harriet Harman has stated that the gap between rich and poor is based much more on class than on gender or race.

She said: "Equality must, of course, mean the absence of discrimination on grounds of race, gender, faith, sexual orientation, disability and age.

"But we also know that overarching and interwoven with these strands is the persistent inequality of social class - your family background and where you were born."

She said voters at the next general election faced a choice between a Conservative government which, she said, would "turn the tide on making Britain fairer" and Labour which "recognises the challenge of inequality" and has "the policies to tackle it".

I happen to agree with Harman - I have fairly well off relatives who tell me that they would, during job interviews, pay as much attention to someones watch and shoes as they would to their qualifications, and that the most important factor they would consider would be the person's schooling - but I don't think this will play well with the electorate, who have been taught that anything to do with class, especially when one is pointing out the advantage that class brings, is a form of jealousy.

But, the evidence the report has found is undeniable:

A central theme of the report is the profound, lifelong negative impact that being born poor, and into a disadvantaged social class, has on a child. These inequalities accumulate over the life cycle, the report concludes. Social class has a big impact on children's school readiness at the age of three, but continues to drag children back through school and beyond.

"The evidence we have looked at shows the long arm of people's origins in shaping their life chances, stretching through life stages, literally from cradle to grave. Differences in wealth in particular are associated with opportunities such as the ability to buy houses in the catchment areas of the best schools or to afford private education, with advantages for children that continue through and beyond education. At the other end of life, wealth levels are associated with stark differences in life expectancy after 50," the report states.

It echoes other recent research suggesting that social mobility has stagnated, and concludes that "people's occupational and economic destinations in early adulthood depend to an important degree on their origins". Achieving the "equality of opportunity" that all political parties aspire to is very hard when there are such wide differences between the resources that people have to help them fulfil their diverse potentials, the panel notes.

Of course, there will always be the exception that one can point to, the person who rose from the schemes to make an awful lot of money, but the overall pattern is undeniable.

If you come from a poor background there are simply many more obstacles in front of you than if you are born into a well off family.

The Tories are, ridiculously, claiming that the report is important because it shows that Labour have not reversed the effect of their policies.

But for the Conservatives, Theresa May said Ms Harman's speech was a recognition that "inequality has got worse under Labour".

"All she can do is reach for the old-fashioned response of class war," she said.

May is relying on the old defence of jealousy, attempting to accuse Harman of "class war" for daring to point out facts.

Under Margaret Thatcher - the woman who reportedly said if you still use public transport by the age of thirty then you are a failure - the rich got richer and the poor got poorer.

Today's Conservative party have very few policies which anyone can name, but they do want to cut inheritance tax whilst slashing public services. I wonder who would benefit most from such policies; the rich or the poor?

Indeed, when a party is running on such policies, it is very hard not to conclude that the end result which this report has found is not accidental. It could be argued that this is actually Conservative Party policy.

Because their policies, the very few which they have articulated, would undeniably make the rich richer and the poor poorer.

Click here for full article.

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