GDP may have risen, but the poorest fifth still lose out on £2,000 a year because of rising inequality

What would Britain be like if the income distribution was the same as in 1977?

GDP figures released today have shown a slight increase of 0.3 per cent over the past three months. But what will this mean for those at the lower end of the income scale, or even those in the middle?

We know that income inequality in the UK has been rising since around 1980, and has offset the benefits of economic growth for most people. But how has it actually changed incomes? Who has gained, who has lost, and by how much?

Figures published by the Resolution Foundation Commission on Living Standards found that in 1977, of every £100 of value generated by the economy, £16 went to the bottom half of workers in wages. By 2010 that figure had declined by 26 per cent, to just £12.

To find out what's going on in a bit more detail, we used figures from the Office of National Statistics to calculate what income levels would have been in 2010/11 if the distribution of income had remained as it was in 1977. We’ve then compared this to the actual income levels in 2010/11.

These figures are household income after taxes and benefits, adjusted for the number of people in each household.

The bottom fifth of households are getting almost £2,000 less than they would if total household income was still distributed as in 1977, while the top fifth are getting over £8,000 more. The pay ratio between the top fifth and the bottom fifth also climbed from 4 in 1977 to 5.5 in 2010/11.

If you are in your 30s and 40s and grew up in the UK then you spent your childhood in a society that was significantly more equal than the one we live in now. In the post-war years inequality decreased, reaching its lowest point in the 1970s. The 1980s, however, saw the steepest increase in inequality on record in the UK, with the gap between the top fifth and the bottom fifth increasing by 60% in just a decade, leaving Britain out on a limb (alongside the US) as one of the most unequal countries in the developed world. Since then, successive governments have used the rhetoric of decreasing inequality but failed to reverse this trend.

This rise in inequality is not just affecting the very poor and the very rich. Increasing inequality has meant less income for all households in the bottom four-fifths of the population. Although the pie got larger between 1977 and 2010/11, we can see that the bottom four fifths are all getting a much smaller portion of that pie.

In absolute terms, those losing out the most are not the poorest but those in the middle, who are getting £2,500 less than they would be without the rise in inequality since the 70s. However, it is the poorest that are losing out on the highest proportion of their income. Households in the bottom fifth are living on an average of £10,693 per year, and an extra £1,948 would be an 18% increase on their incomes. With wages lagging behind inflation, a food and fuel poverty crisis and cuts starting to bite, that extra income could be life changing for many of the UK’s poorest families.

Photograph: Getty Images

Annie Quick is a researcher at York University.

Photo: Getty
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No, straight couples don't face marriage discrimination

The couple are right in law, but their complaint is ill-judged and tone-deaf. 

The Court of Appeal has struck down the case of a heterosexual couple - Rebecca Steinfeld and Charles Keidan seeking to have a civil partnership. The couple in question say they are the victims of discrimination. Are they right?

The legal question is more complex than the headlines. The government’s position is that they are waiting and seeing what the introduction of equal marriage means for the future of civil partnerships. Either civil partnerships will cease to be an option for same-sex couples or they will be extended to everyone. Judges were divided as to whether or not they should leave it for the government to decide that, or if civil partnerships should be extended to heterosexual couples. They opted to leave it to parliament, albeit by a narrow margin.

Legally, the judges agree, that the state of affairs creates a system where the law treats heterosexual and homosexual couples differently, and that this should be ended. And as far as the law is concerned, I agree. But emotionally and morally, the case of Steinfeld and Keidan stick in my craw.
Let’s remember why civil partnerships were created: to allow same-sex couples to access some of the legal protections extended to heterosexual couples in a way that could pass through the Houses of Parliament without being bogged down in too many battles with religious conservatives.

The rights that are not extended to civil partners include: a prohibition on religious readings, music or symbols. They cannot take place in religious venues, regardless of the beliefs of the owners’ rights. And people in a civil partnership cannot describe themselves as “married” on legal documents. There is no provision for separation as a result of adultery.

The rights not enjoyed by married couples in civil partnerships are: the ability to have private ceremonies without witnesses present. The reason why heterosexual marriages include provision for witnesses is the existence of forced heterosexual marriages in the United Kingdom, a rare example of a legal distinction based upon the sexuality of a couple that is grounded in fact, not prejudice or mumbo-jumbo. There is still no recognition for adultery in same-sex relationships in English law, whether you are married or in a civil partnership.  Equal marriage still has yet to be extended to Northern Ireland.

But if you are a heterosexual couple and you want to have a civil union that eschews religious messages, or patriarchal tropes, from being walked down the aisle by your father to the presence of a white wedding dress, you can. If you dislike the phrase “husband” or the word “wife”, you can use whatever word you like, in a social and a legal context. Don’t forget, too, that the courts have ruled recently in favour of couples in longstanding partnerships outside of marriage being able to access pension and other survivor benefits.

So while there is discrimination as a matter of law, it is hard to see how there is discrimination as a matter of fact for heterosexual couples. There is, however, a continuing discrimination towards homosexual couples in the divorce courts and in Northern Ireland.

It seems particularly ill-judged to claim discrimination while using the courts to gain access to an institution created as a pathway to the rights you already enjoy and can freely access, crowdfunding £35,000 along the way, particularly while there is still genuine marriage inequality between heterosexual and homosexual couples. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.