This week the Institute for Fiscal Studies announced a five-year study into inequality in Britain, to be led by the economist Sir Angus Deaton, a Scottish academic who recently won the Nobel prize for economics. It is to be welcomed, because it will widen the scope of a debate that has been too narrow for too long.
Britain’s problems with inequality stem not from an unfair distribution of income but from patchy provision of public services, which are often far better in wealthier areas than in poorer ones. As the IFS makes clear in a report to launch its initiative, income inequality in Britain is not rising — how-ever much the Labour party would like to tell us it is.
One of the great tragedies of the Blair government was that its policies merged poverty and inequality into a single statistic that could be manipulated by tax credits. Billions were spent moving people from just below this misleading poverty line to just above it. When the Conservatives took office they sought better solutions — looking at family breakdown, worklessness, drug dependency and personal debt. But the Tories have now given up, bereft of ideas.
Contrary to Corbynista belief, income inequality has barely moved for a quarter of a century. Salaries in Britain have risen faster at the upper end of the scale, but the tax system has balanced things out. The top 1 per cent have never shouldered a greater share of the burden (paying 28 per cent of all income tax, while earning 12 per cent of all income). Never have lower-paid workers been asked for a smaller share. Just over half of British households receive more in benefits than they pay in tax.
The real problem of inequality in Britain lies elsewhere.
Comments
Join the debate for just £1 a month
Be part of the conversation with other Spectator readers by getting your first three months for £3.
UNLOCK ACCESS Just £1 a monthAlready a subscriber? Log in