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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The NHS's sustainability is under threat if more isn't done to look after its staff

More work is needed to develop the health service's most precious resource.

As the NHS nears its 70th anniversary, the time is ripe for a workforce rescue plan. Staffing worries, even more than funding pressures, are the biggest cause of concern for NHS trust leaders. There are not enough trained health workers in the UK to meet today’s needs, let alone those of the future.

Demands on hospitals, mental health and community trusts, and ambulance services are growing. More patients need treatment. Increasingly, they require complex care, with specialist expertise. This is not just about numbers. We need a clinical workforce that is skilled and equipped to work in new ways to deal with the changing needs of the population it serves. 

That means improving the supply of people coming to work for the NHS, and doing more to develop and motivate them so they want to stay. These problems are not new but the scale of the challenge has reached a tipping point which threatens the future sustainability of the NHS.

Ministers rightly point out that the NHS in England has more clinical staff than ever before, but numbers have not kept pace with rising demand. The official "shortfall rate" for nurses and midwives across England is close to 10 per cent, and in some places significantly higher. Part of this is down to the recognition, after the events at troubled health trust Mid Staffordshire, of the importance of safe staffing levels. Yet for successive years during the coalition government, the number of nurse training recruits fell.

Far from being a problem just for hospitals, there are major nursing shortages in mental health and community trusts. Between 2009 and 2016 the number of district nurses employed by the NHS in England fell by more than 40 per cent. Just as the health service tries to accelerate plans for more treatment closer to home, in key parts of the workforce the necessary resources are shrinking.

There are also worrying gaps in the supply of doctors. Even as the NHS gears up for what may prove to be its toughest winter yet, we see worrying shortfalls in A&E consultants. The health service is rightly committed to putting mental health on an equal footing with physical health. But many trusts are struggling to fill psychiatry posts. And we do not have enough GPs.

A key part of the problem is retention. Since 2010/11 there has been a worrying rise in “leaver rates” among nurses, midwives, ambulance staff and scientific technical staff. Many blame the pressures of workload, low staffing levels and disillusionment with the quality of care. Seventy per cent of NHS staff stay on for extra hours. Well over a third say they have felt unwell in the past year because of work-related stress.

Add in cuts to real basic pay, year after year, and it is hardly surprising that some are looking to other opportunities and careers outside the public sector. We need a strategy to end pay restraint in the NHS.

There is also a worrying demographic challenge. Almost one in three qualified nurses, midwives and health visitors is aged 50 or older. One in five GPs is at least 55. We have to give them reasons to stay.

NHS trusts have made important strides in engaging with their workforce. Staff ratings on being able to report concerns, feeling trusted to do their jobs, and being able to suggest improvements are encouraging. But there are still cultural problems – for example around discrimination and bullying – which must be addressed locally and nationally.

The NHS can no longer be sure that overseas recruits will step in to fill workforce gaps. In the early 2000s many trusts looked beyond Europe to meet nursing shortages. More recently, as tougher immigration and language rules took hold, a growing proportion came from the EU – though not enough to plug the gap.

Now we have all the uncertainty surrounding Brexit. We need urgent clarity on the status of current EU nationals working in the health and care systems. And we must recognise that for the foreseeable future, NHS trusts will need support to recruit and retain staff from overseas. The government says it will improve the home-grown supply, but that will clearly take time.

These problems have developed in plain sight. But leadership on this has been muddled or trumped by worries over funding. Responsibility for NHS workforce strategy is disjointed. We need a co-ordinated, realistic, long-term strategy to ensure that frontline organisations have the right number of staff with the right skills in the right place to deliver high quality care.

We must act now. This year's long-delayed workforce plan – to be published soon by Health Education England – could be a good place to start. But what we need is a more fundamental approach – with a clear vision of how the NHS must develop its workforce to meet these challenges, and a commitment to make it happen. 

Saffron Cordery is the director of policy and strategy at NHS Providers