How to tackle UK inequality

Inequality is corrosive to society and it is increasing. ‘The richest one per cent of people in the UK own more than twenty times the wealth of the poorest 20 per cent in the UK.’ and the effect on health is shocking and dramatic. ‘The infant mortality rates for the poorest families in the UK have risen significantly since 2011 (Office for National Statistics).’

Older people, especially in the south of England, are getting more comfortable as younger people face a bleak future. ‘All of the £2.7 trillion of wealth created in the UK since 2007 has been harvested by those over 45 (Bank of England).

The country’s north-south divide is widening, and it’s killing people: ‘For those aged 35-44, the number of death is almost 50 per cent higher in the north than the south (Manchester University).’

The least educated in the country are suffering. ‘The literacy and numeracy skills of 16- to 24-year-olds in the UK are among the worst in the developed world (OECD).’

There are five main drivers of poverty, and the lack of mobility out of it, that need to be addressed:

  • The UK is a low-skill economy and the educational and apprenticeship systems for the poorest and least skilled in the country are inadequate, and need urgent improvement.
  • The UK is a functionally unbalanced economy in that the financial services industry does not work in the interests of the real economy. Legislation is required to divert money from stoking asset, especially real estate, inflation (fueling the damaging ‘boom and bust’ cycle) into long-term investment in the real economy. The pilfering of citizen’s pension pots by excessive financial services fees and bankers’ bonuses needs to stop.
  • The welfare system is inadequate and does not sufficiently support the worst off in society. The policies that need to be reviewed range from an assessment of the performance to date of ‘universal credit’ to innovative and radical schemes such ‘universal basic income’.
  • The housing market is overheated and under-supplied, making it unaffordable for poor and young people to get on the housing ladder. A range of actions are required: stop housebuilders sitting on land banks; ease planning constraints; ease brownfield site development; increase land supply by developing a land registry; replace ‘Help to Buy’ with an affordable homes programme; and use the ‘New Towns Act’ to build new ‘garden cities’.
  • London and the South East is a fierce ‘magnet’ that sucks the energy out of the other regions of the UK, and there is no regional policy to counteract its dominance. Westminster and Whitehall centralise power and economic activity in London at the expense of regional development.

The decentralisation of government can form the basis of newly dynamic regional economies that build ‘clusters’ of competitiveness in targeted sectors. A complete transfer of the Ministry of Defence to Bristol, for instance, can be the core of a world-class defence industry cluster in that region – similarly for healthcare as the Department of Health moves to Leeds, financial services as the Treasury moves to Edinburgh, and so on (2010 Parliamentary Review).

Responsibility for education and health need to go to newly-constituted regional organisations that shape the local economic, social, educational and healthcare activities in their region.

In short, rising inequality in the UK is causing serious health, economic, social, and political harm to the country, and needs to be reversed.

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Radix is the radical centre think tank. We welcome all contributions which promote system change, challenge established notions and re-imagine our societies. The views expressed here are those of the individual contributor and not necessarily shared by Radix.

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