Since the election, the income of half of British households has fallen by £110, while the income of the richest 5% has fallen by £3,300
Conservative Party Manifesto 2019 promise “Unity and promotion, spread opportunities throughout the UK.” After Boris Johnson became Prime Minister, he redoubled his efforts on this point promise “Upgrade throughout the UK“,Put the main point “Forgotten people and forgotten towns”. He just won a so-called ‘The “supermajority” of the House of Commons is built by newly won seats outside of its traditional heartland, including Worse than average Constituency Across the central and northern parts of EnglandMany people believe that these places are one of the most beneficial places in their hearts. ‘Upgrade” agenda.
Two years after the election, the current parliament is close to half. This analysis proposes a new model to see who has benefited the most and who has lost so far. The results of the research are amazing. In response to the wave of pandemics and supply chain disruptions, successive failures of policies have led to inequality that has been high in 2019, and even more serious-whether it is between households across the country, or between countries and regions.Far from ‘Under the supervision of this prime minister, the already poorest families and places further lag behind the rest of the country.
We used the IPPR tax and welfare micro-simulation model, based on data from the Department of Work and Pensions (DWP) Household Resource Survey and the bank’s latest forecasts on inflation, income and interest rates, and predicted household income in December 2021 in the United Kingdom ( BoE) and the Office of Budget Responsibility (OBR). We have also applied the latest policy changes in the fall budget, and these changes have taken effect. Then, we compare this December 2021 forecast with the household income in the month of Johnson’s election victory (December 2019), and compare the changes that the household actually experienced during this period.
The overall picture ‘Winners and ‘The loser is obvious. Comparing December 2019 with December 2021, the living standards of families with household incomes below the median are squeezed across the distribution (Figure 1 below). On an annual basis, the disposable income of the poorest 50% of households has actually been reduced by an average of 110 pounds (at December 2021 prices), while the disposable income of the poorest 5% of households has actually been reduced by 110 pounds of 3,300. This has led to poverty-based on household equivalent income below 60% of the previous UK median of housing costs-an increase of 300,000 in two years.
Figure 1: The income of the poorest is squeezed, while the growth of the richest is out of control
The government’s decision to respond to Covid-19 has contributed to a sharp increase in inequality.British economy Shrink faster 2020 will surpass most other major Western economies, even in Taking into account different methodological methods Measure GDP.This is largely due to continuous Failed to lock in time, Initially in March 2020, then in September 2020.
This means that compared with many other countries, the number of infections and deaths in the UK has risen faster and higher, and therefore requires longer and stricter lockdowns, and Greater negative impact For the overall economy.Although the overall growth rate will be faster in 2021, by the end of summer, the UK will still maintain One of only two G7 countries Economic activity there is still more than 2% behind pre-pandemic levels—in contrast, the United States has far exceeded closing the gap.
The British economic protection design during the pandemic resulted in a reduction in average support for the poorest.Although the vacation is planned Protect millions of jobs, Those with unstable employment-such as those with fixed-term contracts and some self-employed people (even after self-employment income protection)- more likely Falling from the crack.
At the same time, the general credit has increased significantly It’s better to recharge generously As seen in other advanced economies, legacy benefits such as job seeker allowance and employment support allowance in the UK have not increased at all.
Entering a pandemic, the British social security system already has one of them Weakest substitution rate – In 38 advanced economies, the proportion of employment income that is supported by unemployment. However, the lack of support for those who rely on these systems during the pandemic, especially since the £20 price increase was cancelled, has put Britain’s poorest households at almost the risk of global price increases this winter—especially fuel and fuel. energy.
In addition to this low baseline level of social security support, ‘The uprating’ process (adjusting benefits for inflation each year) introduces a lag because the benefits for the next year are fixed in April based on the inflation rate in September of the previous year. This means that current benefits have been adjusted for the relatively low inflation rate of 0.5% in September 2020 (compared to the 4.2% inflation rate in October 2021).
At the other end of the income scale, the windfall income of the richest 5% is seven times higher than that of the others in the upper half of the income distribution (Figure 1 above).This reflects the relative isolation of certain high-paying jobs and occupations that are not affected by the economic downturn, and the continued growth of the international stock market The whole period, Despite inflation and reduced activity elsewhere in the actual global economy.
These same dynamics have also contributed to the increase in inequality between regions (see Figure 2 below). On average, since December 2019, there has been little increase in disposable real income in the Northeast (less than £20 a year, or less than 0.1%). Similarly, the North West and Merseyside (80 pounds, 0.2%), Yorkshire and the Humber (90 pounds, 0.3%), and Northern Ireland (also 90 pounds, 0.3%) have hardly improved. At the same time, real disposable income in London has increased by more than £600 (1.3%) per year, and the Southeast has increased by more than £550 (1.1%).
Figure 2: The income gap between regions has widened since the 2019 election
From a national perspective, inequality within the region is also increasing. The living standards of those households in the top 50% of the nation’s disposable income have improved across the board, although it is the fastest in London and the southeast (Figure 2 above). At the same time, the real income of the poorest 50% of households in the income distribution has fallen, except in London and East England.
Figure 3 below confirms that losses are concentrated on people outside of work, which highlights the importance of insufficient income protection, especially the protection of UC, pension credit and unemployment inheritance benefits. But even among unemployed households, the differences between regions are still large. Yorkshire and the Humber, as well as the northwest and Merseyside, lose an average of more than 200 pounds a year, while the gains in the southeast and the south are very small— WEAT.
Figure 3: Those who do not have a job are hit the hardest, but the differences between regions are huge
Our model also breaks down income changes by household type. Single-parent households are the only type of households in all regions where real incomes have fallen, although the real incomes of single-parent families in Yorkshire and the Humber, Northwest and Merseyside have fallen by approximately 15 times that of London (chart 4 or less).Given 90% of single parents are womenThis finding has important implications for the gender impact of the government’s latest record. Single pensioners are second, with average real income falling in 8 of the 12 regions and countries in the UK. Pensioners in Wales are in the worst situation, with their disposable income actually falling by about £170 a year.
Figure 4: Single parents and single pensioners are the most severely affected families in each region
These results are far from calming down, suggesting that the government’s handling of the pandemic has resulted in the wealthiest households and regions becoming richer, and that the poorest households are now actually poorer (especially exposed to rising inflation) than the month Johnson was elected.This will be a prosecution against any government, let alone a promise “Upgrading is at the core of its political and policy agenda.
To make matters worse, the near-term outlook certainly looks set to deteriorate further. As prices are expected to continue to rise, coupled with the threat of rising interest rates and the continued impact of Brexit, the situation may become more difficult for those families that have suffered the most.In the long run, any agenda to address these issues requires a grasp of the underlying drivers of inequality in regions, people, and industries—this includes Spread good green jobs across the country, also Diversified company ownership model And distribute the spread of wealth, including through Progressive taxation.
But in the short term, more work should be done to help families directly through the social security system. In particular, considering price increases, this analysis exposes the vulnerability of the UK’s current safety net in responding to changes in the real world.A more basic solution fits NEF’s argument on living income It will ensure the bottom line of income that reflects the true cost of life of the family, rather than the situation of insufficient funds accumulated over the past few decades and arbitrary cuts to limit income support costs. In the past two years, some of the wealthiest families have gained windfalls, and it is clear who can and should help pay for such reforms.
Picture: iStock
