Britain’s Hidden Inequality – How Inequality Increased

A look at different types of inequality – income, wealth, housing, and regional factors. Can anything be done about it.

Chapters

00:00 Intro
0:40 Income inequality
3:15 Regional Inequality
7:02 Housing
8:00 Policies to Reduce Inequality

Sources:

https://www.ft.com/content/e5c741a7-befa-4d49-a819-f1b0510a9802
https://www.ft.com/content/69570200-37da-4b10-9c3c-384b37c1027f
https://www.ippr.org/articles/levelling-up-health-for-prosperity
https://www.theguardian.com/society/2024/feb/27/health-emergency-15-of-uk-households-went-hungry-last-month-data-shows

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After a sharp increase in the 1980s income inequality appears to have slightly improved in recent years however this General measure of inequality fails to capture many of the increasing divides across the country we’ll look at how poverty is creating a vicious cycle of poor health outcomes and economic inactivity and also why

There’s more to inequality than just income how is it that the UK is increasingly divided by geography if we take out London and the southeast the UK is one of the poorest countries in Europe it’s worse off than the poorest US state of Mississippi what’s going on

With inequality and what can be done about it the biggest growth in inequality in recent years is between median incomes and those poorest 10% of the population one factor has been the freezing of benefits and high inflation which has affected lowincome groups the most this has caused around 5 million

People to be living close to a negative budget as a result around 15% of households report food insecurity in the past couple of years there’s been a near 26% increase in the cost of buying a healthy diet and many households are failing to eat healthily as a result and

This can be seen with poor nutrition leading to a ruing rise in Hospital admissions for nutrient deficiency from this income inequality we are experiencing inequality in Health outcomes life expectancy at Birth for men living in the most deprived areas is 74 years compared to 83.5 in the least deprived areas a

Difference of 9.4 years for women the Gap is slightly less at 7.7 an even bigger disparity occurs with healthy life expectancy a key metric for quality of life for example every town in the Northeast is below the national average to give a big contrast healthy life expectancy in Richmond upon temps is 71

But in Blackpool 51 unsurprisingly Blackpool has significantly lower income levels than in Richmond and houndslow the problem is we’re seeing a negative cycle of poverty contribute to worse Health outcomes which in turn restricts opportunities to be economically active now in the short term benefit freezes are exacerbated inequality but a long-term more

Sustainable solution is to try and tackle the ruing decline in economic activity and the increased Health disparities across the country unfortunately the UK’s continued low economic growth and strict benefit limits means that the poorest will be increasingly hit over the next few years by the difficult economic circumstances

And after years of improvement child poverty rates are forecast to rise in the coming years now whilst income inequality gains relatively little media attention there’s been much more focus on Regional inequality especially since of brexit vote of 2016 which raised the prominence of Left Behind regions and towns firstly geographical inequality is

Quite striking London GDP per capita is more than double the vast majority of other regions London attracts the most population the most investment per capita and it’s more than symbolic that the major infrastructure project of recent years to the north got cancelled but London continues to attract significant levels of Transport spending

Per capita and a major issue for cities in the and towns in the north is poor levels of Transport Communications compared to other European cities they perform quite poorly now another Factor behind Regional inequality is with in the past few decades the UK has become a service sector oriented economy manufacturing

Has declined London has captured most of its growth in service sector exports and the result is the highest income growth has been in those regions which were’re Rich to start with success has bred more success for London but the Left Behind regions are left increasingly to

Struggle if we took out London the UK would be significantly poorer but it is worth noting that London is one of the few areas Within net positive fiscal balance in other words High incomes in London are subsidizing poorer regions but the dominance of London is much greater than comparable countries

If we took away the country’s biggest city it is the UK which would have the biggest decline in GDP and this is not just about inequality the Reliance on London and the the so-called Golden Triangle of Cambridge and Oxford is limiting the UK’s scope for economic growth outside the congested capital and

Southeast now whilst London and the southeast has benefited from the growth of the service sector the Midlands and North has seen some of the fastest rates of de-industrialization in Europe and this pace of decline has proved difficult to successfully regenerate leading to relatively low-pay jobs and job insecurity another Factor behind uh

Inequality between regions is a lack of graduate jobs outside London and this could explain the relatively lower rates of graduate degrees in other in other regions of course London itself is very diverse if we look at the richest and poorest regions of the UK the richest areas are mostly in London there’s a

Huge contrast between these different Brewers but there’s also large inequality within London itself Tower hamlets claims a GDP per capita of 128,000 due to Canary Warf been located in its burough but also it’s one of the most deprived areas in the country 30% % on the receipt of housing benefit 44%

Income poverty now you would expect that if the London economy was much stronger with higher income levels it would attract labor to reduce income inequality but housing costs remain a major barrier in fact people have been forced to leave London because it’s expensive to live if we look at the poorest quarter

Of a population living in London if we take into account rental costs it has one of the lowest disposable incomes in England for the top 25% who live in London it still has the highest net income levels but this is why income levels can be misleading a big question

For living standards is are you paying Market rents or are you a homeowner who has paid off most of their mortgage in fact housing is increasingly a Great Divide and source of inequality in the UK house prices are nearly eight times income meaning the average work is UN

Able to buy but is forced to pay Market rent and as a share of income because have increased in recent years those who have paid off their mortgage in a very different financial situation the rise in house prices has contributed to a growth in wealth inequality which is increasingly a problem this particularly

Matters for those who unable to buy but soon to be reaching retirement age and having to pay Market rents uh in their retirement now the housing market it used to be relatively meritocratic but now it increasingly depends on either very high income levels or wealthy parents who can help you get a deposit

Measuring home ownership rates by populations means there’s been a significant decline in home ownership rates so the housing market explains why inequality of outcomes and opportunities is more acute than income might suggest a key fact of course is the lack of building in houses precisely where it’s needed EG London the southeast

Now what can be done about all this inequality Lord Michael hesl a supporter of regional Devolution told researchers that British economic policy has been run for the southeast of England and the problem is that the service sector-based nature of the economy has only reinforced this trend towards London and

The southeast the government’s leveling up scheme is a policy designed to improve transport investment and educational opportunities in the North and the policy is fine in principle it starts to tackle some of the major problems that uh poor regions are facing but it’s been criticized for a lack of

Funding especially the fact that leveling up funds have been dwarfed by the decline in Council funding one of the more successful policies of the UK in recent years has been the national living wage the increas in minimum wages has improved the incomes of many low paid workers and this is espe especially

Important since the decline of trade unions however the minimum wage can only do so much it can’t create real job security and uh higher productivity and there’s only a limit to how much you can keep increasing it more needs to be done than just relying on the minimum wage another relatively welcome development

Of recent years is the decline in unemployment rates this has fallen and it’s contributed to improved income equality but there are two issues firstly there’s been a growth in part-time temporary contracts exemplified by a growth in Zero Hour contracts which have increased job security and also it masks uh quite high

Levels of economic inactivity another politically tricky issue is that of benefit levels the past decade has seen benefits Frozen at least at a slower rate than even the poor growth in wages but the limits on housing benefit and child benefit do make a big difference to increasing effective poverty rates and

The difficulty is that the state of public finances combined with lack of political will is making it hard to tackle this cause of poverty certainly pensions have increased at a much faster rate than uh other forms of benefits but also higher benefits are only a partial solution a more

Sustainable long-term uh solution is to increase participation rates reducing ill health and attracting good paying jobs another problem is not so much about inequality but very low economic growth because this means there’s a smaller economic pie lower tax revenue squeeze on public services inequality levels in the UK are

Actually worse in quite a few countries but better than others but the past decade of very low economic growth has magnified any increase in inequality this video looks at The Wider demise of the UK economy why we’re in recession and why wage growth has been so weak in the past decade