Adam Smith Institute

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What is this inequality that The Guardian speaks of?

It’s a certainty of our times that inequality is high in the UK. Too high and something really must be done about it. So says The Guardian in their listing of the things that Boris Johnson really must get on with. There is a problem with this idea. Which is that UK inequality is lower today than it was at any point in Gordon Brown’s premiership. Which is a problem for this insistence:

If the Conservative party wants to win over large sections of the poor then it will have to tackle the damagingly high levels of inequality in the UK

What damagingly high levels of inequality?

Income inequality was unchanged in financial year ending (FYE) 2019 at 32.5% (Figure 1), based on the Gini coefficient for disposable income.

This puts us rather squarely in the middle of the rich country distributions. A little above Denmark and Sweden, about the same as France, lower than the US and Italy, on a par again with Germany. What damagingly high levels of inequality?

Perhaps other measures would be preferred, Palma, P90/P10, but all of these are showing, again, that inequality is low given the experience of these past 40 years or so.

If Mr Johnson is serious he will have to deal with the UK’s damagingly high levels of inequality.

It’s entirely true that we don’t place the same value upon equality as those who write The Guardian. But that’s not the issue here at all. The stated excessive amount of inequality just doesn’t exist. So what is it that they’re talking about?

Sadly, we seem to have here one of those things that everyone knows. As with witches floating, or their existence even, in former times everyone just knows that inequality is terribly damaging and that also we’ve got much too much of it. We disagree with the evaluation of the damage but again, that’s not the point. The excessive levels simply don’t exist.