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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Prime Minister Jeremy Corbyn sitting down with President Bernie Sanders no longer sounds so outlandish

Both men have a certain authenticity and unpretentiousness that their rivals lack.

Unlike many of us, Bernie Sanders never doubted Jeremy Corbyn. The week before the general election, the independent US senator from Vermont was addressing a crowd of progressive voters in Brighton during a whirlwind tour of the UK. An audience member asked him what advice he might have for the leader of the Labour Party. “I don’t think Jeremy Corbyn needs my advice,” Sanders replied. “I think he’s doing quite well.”

The week after the election, a delighted Sanders invoked Corbyn’s election performance in a New York Times op-ed. “The British elections should be a lesson for the Democratic Party,” he wrote, urging the Democrats to stop holding on to an “overly cautious, centrist ideology” and explaining how “momentum shifted to Labour after it released a very progressive manifesto that generated much enthusiasm among young people and workers”.

Sanders and his growing movement in the United States offered more than mere rhetorical support for Corbyn.

With the help of former members of the senator’s presidential campaign team, Momentum – the grass-roots organisation set up to support and defend Corbyn in 2015 – ran 33 training sessions across the UK, preparing thousands of Labour activists.

Momentum’s national organiser Emma Rees says that the Sanders people made a “significant contribution” to the Labour campaign with their emphasis “on having empathetic conversations that focused on the issues the voter cared about, and actually trying to persuade voters on the doorstep rather than just collecting data”.

“In the final stage, I recruited a bunch of former Bernie volunteers from around [the United States] to . . . help get out a last [get out the vote] texting assignment,” recalls Claire Sandberg, who was the digital organising director for Sanders and spent the 2017 election campaign working with Momentum in the UK. “It was an amazing thing to see them volunteering . . . while we were all asleep the night before election day.”

Is it really surprising that Sanders supporters, thousands of miles away, would want to volunteer for Corbyn? Both men are mavericks; both have a certain authenticity and unpretentiousness that their rivals lack; both, in the words of Emma Rees, “have inspired tens of thousands of people to participate in the political process and to realise their collective power” and they want “to transform society in the interests of ordinary people”. Perhaps above all else, both men have proved that left populism can win millions of votes.

According to the latest polls, if another election were held in the UK tomorrow, Corbyn would be the winner. Sanders, however, has a much higher mountain to climb in the US and faces at least three obstacles that the “British Bernie” does not.

First, Sanders leads a growing grass-roots movement but does not have the support of a party machine and infrastructure.

Corbyn may have been a backbench rebel who voted against his party whip more than 500 times before becoming party leader, but he is a lifelong Labour member.

Sanders, on the other hand, is the longest-serving independent politician in US congressional history. He declared himself a Democrat in 2015 only in order to seek the party’s presidential nomination and promptly declared himself an independent again after he was defeated by Hillary Clinton last summer.

Such behaviour has allowed establishment Democrats to portray him (wrongly) as an opportunist, an interloper who is using the Democratic Party as a vehicle for his own benefit in a country where third-party candidacies cannot succeed.

Second, Sanders has to confront an even more hostile and sceptical media than Corbyn must. Under US law, Fox News is under no obligation to be “fair and balanced” towards Sanders – nor is CNN, for that matter.

Thanks to the UK rules on broadcaster impartiality, however, Corbyn was “able to speak directly to the voters who still get their news from TV instead of the internet”, Sandberg notes. “In contrast, Bernie was completely and totally shut out by broadcast media in the US, which considered his campaign totally irrelevant.”

Third, Sanders failed to connect with minority groups, and especially with African Americans, whereas black and Asian British voters flocked to Corbyn – a veteran campaigner for the anti-racism movement.

Two out of every three ethnic-minority voters voted Labour on 8 June. “Bernie would’ve won [the Democratic nomination] if he’d had a message that resonated with 50 per cent – just 50 per cent – of black voters, because Hillary got upwards of 90 per cent in many states,” the activist and journalist Naomi Klein, who is a supporter of both Sanders and Corbyn, told me in a recent interview for my al-Jazeera English show, UpFront, which will air later this month.

Nevertheless, she is confident that Sanders can learn lessons from his own campaign for the 2016 Democratic nomination, and “build a winning coalition” next time which ties together the narratives of financial, racial and gender inequality.

Just as it was a mistake to write off Jeremy Corbyn, it would be wrong to dismiss Bernie Sanders.

Despite media bias, and even though he doesn’t have a party machine behind him, Sanders today is still the most popular politician in the United States. And so this may be only the beginning of a new, transatlantic partnership between the two self-declared socialists. Those of us on the left who grew up watching Reagan and Thatcher, then Clinton and Blair, then Bush and Blair, may wish to pinch ourselves to check we’re not dreaming.

“I think by 2021,” Sandberg says, “we may see Prime Minister Jeremy Corbyn sitting down with President Bernie Sanders.”

Don’t say you weren’t warned.

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

This article first appeared in the 22 June 2017 issue of the New Statesman, The zombie PM

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