Why inequality has fallen and why it's set to rise from now on

The gap between the rich and the poor has narrowed as real earnings have fallen but the coalition's welfare cuts mean it is set to widen from now on.

The most notable finding from the ONS's annual report on "the effects of of taxes and benefits on household income" is that income inequality fell betwen 2010-11 and 2011-12 to its lowest level since 1986. It notes: 

The Gini coefficient for disposable income in 2011/12 was 32.3%, a fall from its 2010/11 value of 33.7%, and the lowest level since 1986. This fall in income inequality is partly due to earnings (including income from self-employment) falling towards the top of the income distribution but increasing for the poorest fifth of households.

This is not as surprising as some suggest; it's normal in times of economic stagnation for inequality to fall as middle class earnings decline and the automatic stabilisers protect the incomes of the poorest. The decision of the rich to delay earnings until 2012-13 in order to benefit from the cut in the 50p tax rate is also likely to be a factor. But it's still a finding the Tories will hail as they seek to prove that "we're all in this together". 

They would be wise, however, to resist the temptation to do so. Owing to the coalition's welfare cuts, many of which only took effect this year, inequality is forecast to significantly increase between now and 2015-16. In particular, George Osborne's decision to cap benefit increases at 1 per cent for at least three years (an unprecedented real-terms cut) means the poorest will see a sharp fall in their incomes. The IFS expects inequality "to rise again from 2011–12, almost (but not quite) reaching its pre-recession level by 2015–16." 

While the Tories can take little credit for the fall in inequality (which is largely due the decline in real earnings), they will deserve the blame for the rise.

George Osborne delivers his Mansion House speech on June 19, 2013 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Daniel Hannan harks back to the days of empire - the Angevin Empire

Did the benign rule of some 12th century English kings make western France vote Macron over Le Pen?

I know a fair amount about British politics; I know a passable amount about American politics, too. But, as with so many of my fellow Britons, in the world beyond that, I’m lost.

So how are we, the monolingual Anglophone opinionators of the world, meant to interpret a presidential election in a country where everyone is rude enough to conduct all their politics in French?

Luckily, here’s Daniel Hannan to help us:

I suppose we always knew Dan still got a bit misty eyed at the notion of the empire. I just always thought it was the British Empire, not the Angevin one, that tugged his heartstrings so.

So what exactly are we to make of this po-faced, historically illiterate, geographically illiterate, quite fantastically stupid, most Hannan-y Hannan tweet of all time?

One possibility is that this was meant as a serious observation. Dan is genuinely saying that the parts of western France ruled by Henry II and sons in the 12th century – Brittany, Normandy, Anjou, Poitou, Aquitaine – remain more moderate than those to the east, which were never graced with the touch of English greatness. This, he is suggesting, is why they generally voted for Emmanuel Macron over Marine Le Pen.

There are a number of problems with this theory. The first is that it’s bollocks. Western France was never part of England – it remained, indeed, a part of a weakened kingdom of France. In some ways it would be more accurate to say that what really happened in 1154 was that some mid-ranking French nobles happened to inherit the English Crown.

Even if you buy the idea that England is the source of all ancient liberties (no), western France is unlikely to share its political culture, because it was never a part of the same polity: the two lands just happened to share a landlord for a while.

As it happens, they didn’t even share it for very long. By 1215, Henry’s youngest son John had done a pretty good job of losing all his territories in France, so that was the end of the Angevins. The English crown reconquered  various bits of France over the next couple of centuries, but, as you may have noticed, it hasn’t been much of a force there for some time now.

At any rate: while I know very little of French politics, I’m going to go out on a limb and guess the similarities between yesterday's electoral map and the Angevin Empire were a coincidence. I'm fairly confident that there have been other factors which have probably done more to shape the French political map than a personal empire that survived for the length of one not particularly long human life time 800 years ago. Some wars. Industrialisation. The odd revolution. You know the sort of thing.

If Daniel Hannan sucks at history, though, he also sucks at geography, since chunks of territory which owed fealty to the English crown actually voted Le Pen. These include western Normandy; they also include Calais, which remained English territory for much longer than any other part of France. This seems rather to knacker Hannan’s thesis.

So: that’s one possibility, that all this was an attempt to make serious point; but, Hannan being Hannan, it just happened to be a quite fantastically stupid one.

The other possibility is that he’s taking the piss. It’s genuinely difficult to know.

Either way, he instantly deleted the tweet. Because he realised we didn’t get the joke? Because he got two words the wrong way round? Because he realised he didn’t know where Calais was?

We’ll never know for sure. I’d ask him but, y’know, blocked.

UPDATE: Breaking news from the frontline of the internet: 

It. Was. A. Joke.

My god. He jokes. He makes light. He has a sense of fun.

This changes everything. I need to rethink my entire world view. What if... what if I've been wrong, all this time? What if Daniel Hannan is in fact one of the great, unappreciated comic voices of our time? What if I'm simply not in on the joke?

What if... what if Brexit is actually... good?

Daniel, if you're reading this – and let's be honest, you are definitely reading this – I am so sorry. I've been misunderstanding you all this time.

I owe you a pint (568.26 millilitres).

Serious offer, by the way.

 

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.

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