News
Frances Ball 14 May 2019 11:47am

IFS launches review of inequality in UK

Nobel laureate Professor Sir Angus Deaton is to chair a major five-year investigation of inequality in the UK, which has been launched today by the Institute of Fiscal Studies (IFS)

According to the think tank, income inequality in the UK is high, and among major economies is beaten only by the US.

The review won’t look into the fact of inequality, as such – the IFS makes a point of noting that some inequalities are inevitable. Instead, Sir Angus will consider the possibility of a systemic bias toward inequality.

“When the rules of the game are rigged, or when great inequalities in income and wealth result in great inequalities in political power and economic opportunity, then they risk disrupting both our democracy and our prosperity,” the IFS said.

The review was initiated by the IFS, and is being funded by The Nuffield Foundation, a charitable trust for social wellbeing. Members of the panel include world-leading experts in sociology, demography, epidemiology, political science, philosophy and economics.

IFS researchers Xiaowei Xu and Robert Joyce set out some of the facts that motivated the review. They touch on income, wealth, health, social mobility and political participation, among other factors.

Average weekly earnings in London are 66% higher than those in the north east, for example. Men in affluent areas have a life expectancy almost 10 years longer than those in the most deprived, a gap that is widening.

Women’s employment has risen from 57% in 1975 to 78% in 2017. However, the employment gap is only significantly reduced for white women: Pakistani and Bangladeshi women are half as likely to work as men in the same ethnic group.

After decades of improvement, there has recently been a rise in middle-age mortality. Largely attributable to deaths from suicide, drug overdoses and alcohol-related liver disease, the trend is highly concentrated among lower-income people.

IFS director Paul Johnson said, “I can’t think of anything more important than understanding what drives the inequalities we see today and working out what we might do to influence them.

“Everything from early childhood education to the regulation of ‘big tech’, from the design of the benefit system to the effects of globalisation, from the role of men and women in the home to the design of corporate governance, matters for producing the outcomes we see. We will be examining them all,” he added.

The report will consider some of the potential causes behind current levels of inequality, from the hollowing of the jobs market, to the dramatic decline in union membership.

The review will consider the effects of globalisation, change in technology, and increased market power held by a few firms, among other factors.

Tim Gardam, chief executive of The Nuffield Foundation, said, “The multidimensional nature of inequality is among the most contentious issues of our times.

“It frames the increasingly vehement debate about the distribution of income and wealth and the relationships between this and other inequalities such as gender, ethnicity and disability,” he added. “It informs the growing anxiety over generational and geographical divisions and is fundamental to our understanding of concepts such as fairness, rights and identity.”

Gardam praised the panel’s dispassionate analysis of evidence, adding that the review “has the potential to refashion what we know about inequality and present viable policy options for securing a more emancipated and inclusive society.