UK income falls more fairly than France

Hamish McRae wrote an interesting article on income inequality and  the recession in Monday's Evening Standard quoting a report from researchers at UBS.  In it they stated that the loss of personal income due to the recession in the UK has affected all income groups pretty evenly - which contrasts with most of mainland Europe and the US where the fall in income for the richest 10% has been much less than for the poorest.

I've finally tracked down the report on the web here and I've reproduced the table that compares income falls over the last five years by decile:

Those progressive paragons of France and Scandanavia - who the left are telling us to be more like - saw the poorest 10% lose far more than the richest.  In France the poor's income dropped nearly 10% whereas the richest dropped by less than 5%.  In Finland the richest 10% actually saw incomes rise over the last five year.  In contrast in the UK, the poorest decile's income fell by about 7% over the last five years - slightly less than the richest 10%.

One can't help wondering that the UK would look much more like the US and most of Europe if the Tories (or even New Labour) were governing on their own. 

Britain's flat tax?

Lib Dem Voice (and other Lib Dem bloggers) have rightly highlighted the Office of National Statistics report that shows income inequality is now lower than at any time since the mid 80s.  And it is partly down to the Lib Dem policy of taking low paid people out of income tax altogether.

But buried in the report (on page 7) is the following table showing the effective rates of tax for each quintile of the population:



What it basically shows is that each section of the population pays about 35% of their income in tax - effectively a flat tax.  Something this blog first discussed more than two years ago.

Review of the year 2012

It's the last day of the year, so it's time to look back on the events that have caught the attention of this blog over the past 12 months...

In January I suggested that Lib Dem Scottish secretary, Michael Moore should stop trying to impede Alex Salmond from holding a referendum of his choosing.

In February a group called Liberal Left was set up.  I wasn't impressed.

March saw the sad deaths of Lib Dem stalwarts Viv Bingham and David Walter along with former darts champion Jocky Wilson.

In April, former Liberal leader David Steel said some very foolish things about Lords' reform on national TV.

May saw the climax of the football season (or anti-climax if you are a Hibs fan) and the final implosion of Glasgow Rangers.  In politics a local by-election in North Richmond saw some very dodgy tactics by anti-Lib Dem elements.

In June Jeremy Hunt's ministerial career was on the line and the abstention by Lib Dem MPs on a crucial vote suggested to me that it was time to change the rules of government collective responsibility to better reflect the nature of coalition.

In July I highlighted the bizarre behaviour of Kingston's Tories who backed (and continue to back) benefit fraud probe councillor, Tim Dennen.

August saw the spotlight on the future of Nick Clegg and his political strategy with the departure of his so-called strategist Richard Reeves.  Polling evidence contradicted them both.

In September, David Laws returned to government, the Lib Dems caved into ludicrous security demands for their annual conference and Nick Clegg's conference speech began to unravel in the blogosphere.

In October I gave some advice to the Guardian that might have dealt with some of their financial woes.  But there seemed to nothing that could deal with the self inflicted financial crisis at Edinburgh's second football team - Hearts.

November was a month for elections with the re-election of President Obama and the first votes for police and crime commissioners in the UK.  And it also saw a welcome - if belated - development with the Lib Dems reversing their support for more internet snooping powers.

And this brings us to December - and the news that income inequality had fallen under the coaltion in contrast to the rises under Labour.

So that's it for another year - and I wish you all a happy 2013.

IFS report shows income inequality falling

The ever excellent Richard Kemp highlights a new report from the Institute of Fiscal Studies - Living standards, poverty and inequality in the UK: 2012 - which shows that income inequality is falling under the coalition.

The salient passage is:

Income inequality in the UK fell sharply in 2010–11. The widely-used Gini coefficient fell from 0.36 to 0.34. This is the largest one-year fall since at least 1962, returning the Gini coefficient to below its level in 1997–98. Although this reverses the increase in this measure of income inequality that occurred under the previous Labour government, it still leaves it much higher than before the substantial increases that occurred during the 1980s.

Driving this drop in income inequality, the falls in real incomes in 2010–11 were smallest towards the bottom of the income distribution and largest towards the top. In the UK, real incomes fell by 1.1% at the 10th percentile, 3.1% at the median and 5.1% at the 90th percentile.

So there you have it - income inequality rose under Labour - and is falling under a Liberal Democrat influenced government.

Given the lack of any government minister publicising the fact one can only assume this is a source of embarrassment for the more strident Conservatives in the coalition.  But you would have thought that Lib Dem ministers might wish to highlight the fact.  But perhaps reducing inequality is just too left wing for a party committed to 'governing from the centre' (whatever that is)...