“There is no magic money tree” say the people who think there's a magic housing tree, health, education and police trees

OUR RELATED STORIES:

£100bn a year is missing from our high streets thanks to 50 years of pay squeezes

Why does everyone say inequality is falling, when it's rising? Because they're only counting incomes, not all wealth (property, pensions, etc.)

The NHS is not a “cost”. It creates nationwide jobs, technology, growth and wealth. Oh, and health

FTSE bosses take 2.5 days to earn what you earn all year. Data shows they don't deserve it

All governments agree to fix the housing crisis. Latest figures show we're still not even trying

Recovery? What recovery?! Bank of England director explains why broke Britain is still broken

Brexit was about inequality in Britain, not immigration. Have our politicians realised this?

See the Stats: Osborne's 2016 budget protected the wealthiest while the most vulnerable suffer

Inequality: the UK has 9 of the 10 poorest regions in Northern Europe. But Inner London is the richest

Graphs at a glance: With highest pay and highest job growth is London sucking the life out of Britain?

Londoners earn 15% more 'cos London is damn expensive! But the poorest 5th in London are paid only 4% more

Graphs at a glance: Britain is already a low-pay economy with falling average wages

Is your Cost of Living crisis over?! Average wages are still back where they were 10 years ago

Election 2020: since 1997 the percentage of those under 55 who don't vote has doubled

Don't be fooled: the top 1% are paying more income tax? Because their income has doubled since 1995 while the bottom 90%'s has stagnated

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The big question: who was behind the NHS malware?

Fee and KJ hazard a guess...

SOURCE PUBLIC SECTOR EXECUTIVE: Lib Dems join Labour in pledge to scrap 1% public sector pay cap

Liberal Democrat leader Tim Farron has pledged to put an end to the government’s 1% public sector pay cap and uprate wages in line with inflation, a commitment that is in line with Labour’s pledges according to its leaked manifesto. Farron, who accused the Conservatives of treating health workers “like dirt” at yesterday’s Royal College of Nursing (RCN) annual conference, said nurses and teachers could be £780 better off by 2021 as part of his party’s plans. Conversely, it is estimated that a new nurse would be around £530 worse off by then under current Tory plans, while a primary school teacher would lose out on £550 and an army sergeant £830, according to Lib Dem analysis. The party’s leader also said that the controversial pay cap, branded by many unions as a “cruel” policy, would leave the average civil servant £800 worse off by 2021. Vince Cable, Lib Dem shadow chancellor and the former business secretary, said: “Public sector workers are facing a double blow at the hands of this Conservative government, with years of pitiful increases to pay combined with a Brexit squeeze caused by soaring inflation. “Our NHS and schools are already struggling to recruit the staff they need. "Living standards are falling, prices are rising and nurses are going to food banks – but Theresa May doesn’t care.” Just last week, a leading trade union claimed the cap policy will cost the UK economy around £16bn in lost wages by the end of the decade. Analysis by the GMB also predicted that between 2017 and 2020, five million workers in the public sector will find themselves out of pocket by around £3,300 each. As expected, the cap has been an extremely controversial policy since its inception, and is now threatening to drive the nursing workforce to its first-ever strike in the RCN’s 100-year history.

OUR RELATED STORIES:

£100bn a year is missing from our high streets thanks to 50 years of pay squeezes. See the stats

Hoping for a Brexit U-turn? Then let's U-turn inequality. Except Hammond’s budget is making it worse

Why does everyone say inequality is falling when it's rising? Measure all wealth/assets, not just incomes

The NHS is not a “cost”. It creates nationwide jobs, technology, growth and wealth. Oh, and health

FTSE bosses take 2.5 days to earn what you earn all year. Data shows they don't deserve it

All governments agree to fix the housing crisis. Latest figures show we're still not even trying

Recovery? What recovery?! Bank of England director explains why broke Britain is still broken

Brexit was about inequality in Britain, not immigration. Have our politicians realised this?

See the Stats: Osborne's 2016 budget protected the wealthiest while the most vulnerable suffer

Inequality: the UK has 9 of the 10 poorest regions in Northern Europe. But Inner London is the richest

Graphs at a glance: With highest pay and highest job growth is London sucking the life out of Britain?

Londoners earn 15% more 'cos London is damn expensive! But the poorest 5th in London are paid only 4% more

Graphs at a glance: Britain is already a low-pay economy with falling average wages

Is your Cost of Living crisis over?! Average wages are still back where they were 10 years ago

Election 2020: since 1997 the percentage of those under 55 who don't vote has doubled

Don't be fooled: the top 1% are paying more income tax? Because their income has doubled since 1995 while the bottom 90%'s has stagnated

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£100bn a year is missing from our high streets thanks to 50 years of pay squeezes

A pound’s worth of product is not worth a pound when you’ve made it. It’s worth a pound when someone has bought it. That’s why Britain needs a pay rise.

There’s no rise in UK sales without a rise in UK incomes. That’s why we’ve not had a recovery. Only a recovery in credit card debt!

Whichever party understands that, vote for them.

Wages have flatlined since July 2005, says the Office for National Statistics. But it’s worse than that. Notoriously, the Average Weekly Earnings (AWE) data never include the earnings of the self employed, which have been getting worse, so that means there has been an overall decline.

SOURCE Office for National Statistics

If you’ve been one of the lucky ones who have seen his/her earnings increase, you have a counterpart who saw the opposite. As the graph tells us, the more you earned the more someone else didn’t. So if you’re trying to sell them something, you’re in trouble too.

Those people earning less: are they all lazy and stupid? Nigh on half the workforce?!

A balance must be struck between earnings rising too fast (businesses and their customers can’t afford it. So the business goes bust) and too slow or not at all (businesses can fill their shelves, but nobody can afford to buy the damn stuff. So the business goes bust). That balance has been lost since the 1970s. For too long wages, as a percentage of the nation’s GDP, have been falling.

 

That 10% drop in the UK’s wages bill, compared to 50 years ago, equates to around £100bn a year in spending being taken off our high streets.

Now take a look at the list of sectors where wages are falling. If your business depends on selling to people working in those sectors, you’d better pray they get a pay rise.

SOURCE: Resolution Foundation

Yes, I said pray. Because businesses, in competition, find it genuinely difficult to coordinate a pay rise lest someone breaks ranks and win-wins by keeping pay down while selling to those who got the rise. That’s why unions do us all a favour, by coordinating that pay rise. Government too, by legislating that rise.

The Resolution Foundation, digging into Office for National Statistics data on wages, says around 40 per cent of the workforce are in sectors where pay is falling in real terms.

This is despite another “good performance” on jobs, with fast growth in hours worked, employment remaining at a record high and unemployment falling by 45,000. Although, notoriously again, the official employment data says anyone who has worked a measly one hour a week is “employed”. One hour! What a job that must be!

We’re wasting our time if jobs are being created, but incomes aren’t rising. We’re driving with the hand brake on.

“But having a job matters more than having a pay rise!” says the tub thumping right, who see low pay as a way of creating jobs. These are the same people who say “Those Commies, they think full employment matters more than growing the economy.” They’re asking for the same thing as the Commies now. Beautiful! Someone should tell them that if wages don’t rise, economies simply don’t grow *.

 

* ...except, of course, through immigration. More people, more GDP. Simples. No wonder neither New Labour nor the Tories cut immigration. Immigration is not the cause of our problems **, it’s the only thing that’s making our economy look as though it has a future.

** Do you seriously think if the population had risen through more British babies instead of immigrants, those past governments would have built the 250,000 houses a year we need, increased spending on the NHS and schools to shorten those queues, and raised those wages?

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Over half our MPs’ seats are so safe, they never change hands. Then Brexit gave those millions of ignored voters a voice...

KJ and Fee know who and what is to blame...

SOURCE Electoral Reform Society

In safe seats odds are firmly stacked against any voters looking for change. The average constituency last changed hands between parties in the 1960s, with some super safe seats having remained firmly in one-party control since the time of Queen Victoria. That means, at every election, the majority of seats can be predicted because of Westminster’s broken First Past the Post electoral system. As consituencies are small and only elect one MP, rival parties often don’t stand a chance of winning in hundreds of seats across the UK. Even if they have significant support it counts of nothing if they lose. As the loss of safe seats is rare, parties target their resources on a small number of floating voters in marginal seats – meaning they give up on millions of voters across the country. Four weeks away from the 2015 election we could predict the results for over half of the total constituencies.

OUR RELATED STORIES:

More votes shifted left than right at GE2015. That's where the Labour party needs to be. See the stats

It's constituency boundaries wot won it: The Tories won more swing seats. But more people shifted their votes left

Apathy? Since the 1970s Brits vote less. But they take part in community, charity and civic activities more

British Election Study shows UKIP voters are well to the left of the Tories and even the LibDems

Every democracy, including ours, needs a left and a right party. Politicians who shift too close to their opposition are putting their careers before the nation

Most MPs vote the way they're told by the party. Many have second jobs earning tens of thousands. Half sit in safe seats they never lose. It's tough being an MP!

British Social Attitudes Survey: Tories & Labour are losing their core supporters

Under 25% of total electorate voted Labour in 2005 and Tory in 2010

In 1997 the percentage of young people not voting shot up. Under 55- year-olds too

Since 1979, Labour or Tory, inequality rose whilst economic performance remained the same

"It's the economy, stupid" means the economies of individual families, not just UK Plc

Hope you didn't vote for anyone who helps pump up house prices

Lest we forget: all policies are pointless unless the banks are reined in

GDP is what the UK produces. NNDI is what UK residents get to keep of it. It's starting to slide

Decades of spending our property wealth led to the 2008 crash. Spending our pension pots will lead to the next

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Hoping for a Brexit U-turn? Then let's U-turn inequality. Except Hammond’s budget is making it worse.

Almost four decades of widening inequality caused Brexit. Who seriously thinks we’d have voted Brexit if low-end wages had risen in line with growing national wealth? If low income workers had been saving, rather than borrowing or going without? Instead, since 1979, the Tories increased inequality. Worse, Labour failed to reverse it. In fact, it crept up further. Immigration and the EU is getting the blame for that poverty. But neither caused it.

Source: Institute for Fiscal Studies http://www.ifs.org.uk/publications/4637
NOTE: The “Gini coefficient” is an internationally used measure of inequality, where zero corresponds with perfect equality (where everyone has the same income) and 1 corresponds with perfect inequality (where one person has all the income, and everyone else has zero income).

Inequality so what? It means we’ve become a nation of borrowers. Since the 1980s the bottom 50% have actually had to borrow money to cover their living costs. As the graph shows, the poorer you are, the more you had to borrow. And before you shout “If you can’t afford it, don’t buy it!” where do you think that huge chunk of the nation’s high street spending is going to come from, that’s paying your wages?! The "Savings Ratio" in the graph shows what percentage of income different groups (the poorest to the richest) save. A negative Savings Ratio means they are borrowing. 

SOURCE: Resolution Foundation report "Gaining from growth: The final report of the Commission on Living Standards"

So, anyone hoping that Brexit voters will change their mind before the EU plug is pulled must therefore pray that inequality gets better. But Chancellor Philip Hammond’s budget is about to make it worse.

Here’s a graph of how incomes changed in the first four years of the “cataclysmically awful” bank bust (2007/8 to 2011/12), overlaid with how incomes will change thanks to Hammond’s budget (2016/17 to 2021/22).
SOURCE: Resolution Foundation report: “Are we nearly there yet? Spring Budget 2017 and the 15 year squeeze on family and public finances”

The lines show household net income growth (i.e. after including tax and benefits, and housing costs) for all working-age households. The poorest are on the left, the richest on the right. The bank-bust brown line shows everyone’s growth was negative, but the poorest suffered least and the super-rich most. Hammond’s blue line shows the poorest will suffer more than anyone has since 2007/8, while incomes will actually grow for the top 50%, the richer the better.

The graph comes from a report by the Resolution Foundation, who said: “the final four years of the current parliament look like being worse for poorer households than the financial crisis period itself.”

And before you accuse the Resolution Foundation of being too lefty, its boss is David Willetts, the Tory peer and former cabinet minister.

Someone needs to tell Hammond that a recovery needs people to spend money. But Hammond’s plan is to give more money to people who will save it, and less to people who would spend it. It’s not going to work. Duh!

What of UK average earnings as a whole? Overall, has the UK got a pay rise yet, since the bank bust? Paul Johnson is the boss of the Institute for Fiscal Studies. The IFS is one of the few research bodies that politicians don’t argue with, such is the robustness of their work. He said: “On current forecasts average earnings will be no higher in 2022 than they were in 2007. Fifteen years without a pay rise. I’m rather lost for superlatives. This is completely unprecedented.”

Unprecedented. The never-ending stagnation has forced commentators to dive deeper and deeper into their tattered history books as every year passes. Yup, this has been the worst recovery for wages since... Napoleonic times!

SOURCE: Resolution Foundation report: “Are we nearly there yet? Spring Budget 2017 and the 15 year squeeze on family and public finances”

The Resolution Foundation report confirms it: “we are on course for average pay across the decade to 2020 to be lower than the average for the decade before. That would represent the worst decade for real earnings growth in 210 years.”

“But Brexit is not simply about inequality and wages. Get real! Plenty of Brexiters just don’t like immigration and the EU.” Sure, but there aren’t nearly enough of them to win a referendum on their own.

Both Theresa May and Philip Hammond voted Remain. Now they are the PM and Chancellor of Brexit Britain. What are they doing to prove their Brexit credentials? By deepening inequality, they ensure the fervour for Brexit never goes away. I guess that’s kind of pro-Brexit.

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"Austerity” cuts to tax credits/benefits have hit women hardest: £79bn against £13bn for men

Fee and Chris wonder whether a female PM's chancellor will do better...

SOURCE GUARDIAN: Women bearing 86% of austerity burden, Commons figures reveal

Labour has urged the Conservatives to carry out a gender audit of its tax and spending policies, as the shadow equalities minister, Sarah Champion, published analysis showing that 86% of the burden of austerity since 2010 has fallen on women. Champion said research carried out by the House of Commons library revealed that women were paying a “disproportionate” price for balancing the government’s books. The analysis is based on tax and benefit changes since 2010, with the losses apportioned to whichever individual within a household receives the payments. In total, the analysis estimates that the cuts will have cost women a total of £79bn since 2010, against £13bn for men. It shows that, by 2020, men will have borne just 14% of the total burden of welfare cuts, compared with 86% for women. Many of the cuts announced in earlier years by former chancellor George Osborne, including a four-year freeze on many in-work benefits and reductions in the universal credit, are yet to bite. Hammond has loosened Osborne’s fiscal rules, but he will press ahead with most of the pre-planned austerity measures – though the tax credits rebellion forced the government to promise not to look for fresh savings from the welfare bill in future years. Mary-Ann Stephenson, co-director of the Women’s Budget Group lobby group, condemned the Tories in light of the new research. She said: “The chancellor’s decision to continue with the decisions of his predecessor to cut social security for these low income families, at the same time as cutting taxes, is effectively a transfer from the purses of poorer women into the wallets of richer men.” The government publishes an analysis of the differential impact of its policies at different points on the income scale, but does not carry out a gender analysis.

OUR RELATED STORIES:

Why does everyone say inequality is falling, when it's rising? Because they're only counting incomes, not all wealth (property, pensions, etc.)

The NHS is not a “cost”. It creates nationwide jobs, technology, growth and wealth. Oh, and health

FTSE bosses take 2.5 days to earn what you earn all year. Data shows they don't deserve it

All governments agree to fix the housing crisis. Latest figures show we're still not even trying

Recovery? What recovery?! Bank of England director explains why broke Britain is still broken

Brexit was about inequality in Britain, not immigration. Have our politicians realised this?

See the Stats: Osborne's 2016 budget protected the wealthiest while the most vulnerable suffer

Inequality: the UK has 9 of the 10 poorest regions in Northern Europe. But Inner London is the richest

Graphs at a glance: With highest pay and highest job growth is London sucking the life out of Britain?

Londoners earn 15% more 'cos London is damn expensive! But the poorest 5th in London are paid only 4% more

Graphs at a glance: Britain is already a low-pay economy with falling average wages

Is your Cost of Living crisis over?! Average wages are still back where they were 10 years ago

Election 2020: since 1997 the percentage of those under 55 who don't vote has doubled

Don't be fooled: the top 1% are paying more income tax? Because their income has doubled since 1995 while the bottom 90%'s has stagnated

Read More

Why does everyone say inequality is falling, when it's rising? Because they're only counting incomes, not all wealth (property, pensions, etc.)

Inequality has reduced!

No it hasn’t.

Yes it has! I heard Dimbleby say it on Question Time. And the Lefties all nodded solemnly.

“...the statistics show the gap is narrowing” David Dimbleby 2nd February 2017

That’s because they‘re all clueless.

Never!

They don’t realise they’re only talking about income inequality, not wealth inequality.

What’s that?

Wealth inequality measures all your assets – property, shares, pension pot, that sort of thing.

You mean the really big numbers.

Right. Income is just what’s going into your bank account – pay, dividends, pension payouts, and the rest. Net Income – what they’re referring to when they talk about income inequality - is all that after benefits and taxes have been added and subtracted.

Let me guess. Wealth inequality has risen?

You win a free Question Time T-shirt and nodding duck pencil sharpener. Generally, asset prices have continued to recover since the bank crash, but the poor hardly have any assets!

So the gap between rich and poor continues to rise.

Yup.

And what of the gap between Dimbleby’s ears, and the ears of every card carrying leftie who hasn’t bothered to use this shocking fact that would make every working hour of their lives so much easier?

Hmm. No official data on that one. Looks like the Office for National Statistics needs to tear itself a whole new index.

The background data

Wealth inequality is almost twice that of income inequality. The overall Gini coefficient (the official measure of inequality, where 0=minimum and 1=maximum) for net income is 0.34, while that for total wealth is 0.64.

Institute for Fiscal Studies: "Household Wealth in Great Britain: Distribution, Compositionand Changes 2006–12" 

HRP = age of household reference person

Wealth in Great Britain is even more unequally divided than income. The richest 10% of households hold 45% of all wealth. The poorest 50%, by contrast, own just 8.7%.

 

Equality Trust: The Scale of Economic Inequality in the UK

Office for National Statistics: Total wealth, Wealth in Great Britain, 2012 to 2014 (Chapter 2)

Wealth inequality is rising. The ONS report says: “In July 2012 to June 2014, the wealthiest 20% of households had 117 times more aggregate total wealth than the least wealthy 20% of households. In comparison, the wealthiest 20% of households had 97 times more aggregate total wealth than the least wealthy 20% of households in July 2010 to June 2012.”

It goes on the explain: “Figure 2.10 shows the median household total wealth by the levels of household net equivalised income. Households in the lowest band of income had the lowest median household total wealth, while those households in the highest income band had the highest. During July 2012 to June 2014, households in the lowest income band had a median household total wealth of £34,000 while for the highest income group that was over 26 times as big, £225,100. Between the 2 survey periods shown, the median value for those in the lowest 3 income bands fell, whilst the median value of household total wealth increased across all other income bands. The median value of household total wealth fell the most in the lowest income decile, with a 38% fall seen between July 2010 to June 2012 and July 2012 to June 2014, and the largest increase was seen in the top 2 income deciles, with a 19% increase in the median value seen over the same period.”

Office for National Statistics: Total wealth, Wealth in Great Britain, 2012 to 2014 (Chapter 2)

The South East’s median household total wealth (£342,400) is over twice that of the North East (£150,000). It's another sign of the growing divide between the south and the rest.

Office for National Statistics: Total wealth, Wealth in Great Britain, 2012 to 2014 (Chapter 2)

The poorer regions have got poorer. Yorkshire and The Humber saw a fall in median household total wealth of 8% between July 2010 to June 2012 and July 2012 to June 2014. Smaller falls were also seen in the West Midlands (2%) and East Midlands (1%).

Office for National Statistics: Total wealth, Wealth in Great Britain, 2012 to 2014 (Chapter 2)

Even income inequality is on an upward trend, when you include housing costs: essential costs like rent or mortgage interest, water charges, insurance premiums, and service charges. This is important as such costs can hardly be avoided. The Resolution Foundation report says “Looking at the 90/10 ratio, income inequality before housing costs peaked in 1991 and has been largely flat or falling since then. But after housing costs, this ratio was higher in 2014-15 than at any point in the 1980s or 1990s.”

Resolution Foundation: Living Standards 2017

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