When it comes to inequality, the UK is regressing back to Edwardian times

Anyone who doubts that Britain is going through an astonishingly rapid revolution in inequality should study the latest impeccably researched evidence from the Institute for Fiscal Studies. It demonstrates what has been apparent for a long time; that the gulf between rich and poor in Britain is growing deeper, and that the phenomenon is becoming self-perpetuating across the generations, as inherited advantages reinforce each successive cohort.

The IFS has also been careful to produce data that demonstrates that the present tax and benefits system only tends weakly to ameliorate the trend to grotesque inequality. Compared to the first decades after the Second World War, we are now regressing to the kind of situation that pertained in pre-war, if not Edwardian times.

After 1945, in the age of consensus between what would be styled One Nation Conservative and social democratically minded Labour governments, both sides of the political divide shared a common determination to prevent unemployment and lift the poorest out of poverty, with ambitious pledges to build social housing unimaginable today. That worked. It was an age when the tax system was more steeply progressive, it was more effective at attacking inherited wealth, it was when social security benefits were more widely distributed and the welfare state a more comprehensive engine for social justice than it is today. Free university education, including maintenance grants for students from modest backgrounds, well-funded (in relative terms) schools and the NHS also underpinned what was an unprecedented move towards a more equal and a happier society.

Was that period of progress merely an aberration? It is looking more and more as if it indeed was just such a sadly ephemeral episode, easily reversed. Inequality of outcome has grown alongside inequality of opportunity since the 1970s. The two ideas are worth distinguishing; yet they are intimately linked. Higher incomes tend to foster a greater accumulation of wealth, which in turn will eventually convert into greater incomes once again. The “Bank of Mum and Dad” is not universally open to the offspring of the poor, and it has, in effect, locked many out of the housing market, powerfully reinforcing inequalities between and within the generations. Inequality of wealth and income is the parent of inequality of outcome – and vice versa.

Families who can afford to live in the best areas, often because their parents did, or pay for private tuition are naturally at an instant advantage over underfunded and overstretched schools – and, to be candid, ones where the educational establishment was not careful enough about standards and discipline.

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Education, then, has always been a key to unlocking the potential of everyone in society even if, as the IFS wisely note, it has never been sufficient to deliver equality. A tax and benefit system that attacks privilege and redistributes opportunity is also needed – equality of outcome here being the prelude to greater equality of opportunity.

In an age when so much has been achieved in fighting for LGBT rights, for gender equality and for racial equality – though not enough has been won in any of these struggles – the issue of class has too often been neglected. Yet it is also often at the root of these other societal injustices.

The IFS has reminded us once again of its importance, and, once again, pointed the way to a fairer but also a more economically efficient society, where talent and potential is no longer wasted. The political will do something about it, however, is, for the time being, equally quite absent.  

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