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Copyright Bruce Nixon 2010. All rights reserved. This electronic copy is provided free for personal, non-commercial use only. www.brucenixon.com over 100 more can look forward to retiring on at least £200,000 a year and 80 FTSE firms retain final salary schemes for all or some of their directors whilst axing them for staff. Disproportionate wealth contributes to the problem of unaffordable housing in London and the South East. Similar problems are created in the countryside with the growth of second homes or homes for wealthy retired. Tax evasion and avoidance by individuals cost the UK taxpayer £18.5bn in the year 2007-8. Tax avoidance was about £100bn compared to the government budget of £589. In contrast benefit fraud cost the taxpayer around £800m. Poverty in UK A survey published by the anti-poverty charity, Elizabeth Finn Care (EFC) claimed that 12.5 million people or 20 per cent of UK’s population live in poverty. EFC claimed that 3.9 million single people lived in poverty. This number had risen by around 300,000 since 1997. There are more and more singleperson households in the UK today, and there is considerable evidence to show that many singletons live far away from and even lose touch with their social and family circles. Many people living alone are divorced, widowed and separated women, a group particularly liable to poverty. And precisely because many single people are outside firm social structures, it can be hard to keep track of them. Adults with children make up 22 per cent of Britain's poor, 900,000 of their number are single parents. Since 2005, incomes for the poorest 10% of households have fallen by £9-00 to £147 in real terms per week and the richest 10% have risen by £45 to £1,033. This is a higher growth in the gap than at any time since the Thatcher era. The number of working adults living below the official breadline rose by 300,000 to 11m. One in seven adults of working age without dependent children are now living in poverty. The low skilled, with low education, and young workers will suffer most in the depression. Child poverty In UK, 3.9 million, one third of our children, live in poverty. End Child Poverty argued that progress on child poverty is at risk. Tony Blair’s promise in 1999, when 3.4 million children were living in poverty i.e. in families with 60% less than the median average income, was to halve child poverty by 2010 and be abolished by 2020. By 2005, this had fallen by 16% to 2.7m but it rose again to 3.9 million. The UK wealth gap is the widest in over 40 years. A report in May 2009 by the Institute of Fiscal Studies (IFS) shows the gap between rich and poor to be the widest since the 60s. The British inequality index, called the Gini co-efficient, with a base line of 100 in 1961, shows that the poverty gap was declining until Margaret Thatcher came to power. A de-unionised economy, with pressure bearing down on the low paid, reversed this trend and made it inevitable that the gulf would widen. So under her premiership the index increased from 92 to a peak of 131 before finally declining to 128 at the end of her term. From 1987 under New Labour it rose to 138, the highest gap ever. Margaret Thatcher’s housing policies, gave many people on moderate incomes the chance to buy their homes. However her policy of preventing local authorities from building affordable housing, continued by New Labour, greatly contributed to poverty and homelessness. Now there are over 1.67m households on the waiting list for affordable housing, an increase of 64 percent since 1997. Over 600,000 of these households are living in temporary, unsuitable accommodation. Around 150,000 private sector homes have 72
Copyright Bruce Nixon 2010. All rights reserved. This electronic copy is provided free for personal, non-commercial use only. www.brucenixon.com been turned out every year, about 62 percent of what is needed, but the amount of social housing has “plummeted” (Minton A, 2009). Whilst a third of the food we buy goes into waste, five per cent of those on low incomes in UK skip meals for a whole day. There is a polarisation between the wealthy in southern suburbs and the poor elsewhere, particularly in the North and former industrial areas. In the seventies, incomes were getting more equal; now the reverse is happening. There is growing poverty in the countryside: rural services are declining; the rural population is ageing, as the young people cannot afford to stay and migrate to cities. (Sources for the above three paragraphs: Larry Elliot’s and Polly Curtis’s article in the Independent, Gap between rich and poor widest since 60s and Larry Elliot’s Labour’s poverty of progress laid bare 8-5-2009). Low social mobility leads to wasted lives in UK. Social mobility in Britain is worse than in other advanced countries and is declining. Educational attainment is strongly related to family income according to the London School of Economics and Sutton Trust and the cross-party report on social mobility in UK, Jul 2009. A huge amount of potential talent is wasted and massive social problems result. In his article in the Observer, 10-1-09, Of course class still matters, Will Hutton points out class still matters in UK and it has a pervasive influence. Ten million men and women earn less than £10,000 a year. Most of their parents were in a similar position. The family you are born into has a powerful influence – for example, on the size of your vocabulary. This affects the cognitive development of children. Diet affects physical development and lifetime health. Our education system, in which money buys advantage, results in the 7% of children who are privately educated becoming 75% of judges, 70% of finance directors, 45% of top civil servants and 32% of MPs. If this trend continues, professionals will continue to come from the better - off families. Is it right that private schools enjoy the advantages of charitable status? The Fabian Society report, “In the mix”, argues that by splitting up those living in public and private housing, successive governments have fostered suspicion towards those who live on council estates. It concludes that segregated estates have had a devastating effect on social mobility and that much of the problem has been caused by political and institutional processes. Symptoms of social distress UK ranks low amongst advanced economies on many measures of wellbeing and happiness: prison population, crime, child poverty, teenage pregnancy (UK has the highest rate in Europe). After Bush took power, every social indicator in USA worsened. Between 2000 and 2008, household income declined 1% whilst corporate profits rose 70% and the gap between rich and poor is higher than at any time since 1929; families living in poverty and those without health insurance have increased by 20%. USA has amongst the highest levels, alcohol and drug abuse, literacy, political alienation and upward social mobility in industrialised nations. England and Wales have the highest per capita prison population in Western Europe. At last, Ken Clarke is saying this should be cut and the money saved spent on rehabilitation. These conditions appear to be in part the result of pursuing economic policies that enable a few to become immensely rich at the expense of the majority. Where the income gap is highest so is unhappiness 73
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