REPORT ON 2 STUDIES BY JOSEPH ROWNTREE FOUNDATION (JULY 2007)

(More detailed summaries are available on – the Regeneration Partnership office has downloaded copies of the full reports which can be emailed if anyone requires them.)

1. POVERTY AND WEALTH ACROSS BRITAIN 1968 TO 2005

This study provides a new spatial analysis of Britain’s changing picture of poverty and affluence over the last 40 years.

The measures of poverty and wealth used for this study are:

  • Core Poor (also sub set of breadline poor)

People who are income poor, materially deprived and subjectively poor

  • Breadline Poor

People living below a relative poverty line and excluded from participating in the norms of society

  • Neither Poor nor Wealthy
  • Asset Wealthy

Estimated using the relationship between housing wealth and the inheritance tax threshold

  • Exclusively Wealthy (also sub set of asset wealthy)

People with so much wealth they can exclude themselves from the norms of society.

Some key points identified by this study are:

  • Since 1970, area rates of poverty and wealth in Britain have changed significantly. Britain is moving back towards levels of inequality in wealth and poverty last seen more than 40 years ago.
  • Over the last 15 years more households have become poor but fewer are very poor. Even though there is less extreme poverty the overall number of ‘breadline poor’ households increased – households where people live below the standard poverty line. This number has consistently been above 17%, peaking at 27% in 2001.
  • Already wealthy areas have tended to become disproportionately wealthier. There is evidence of increasing polarisation, where rich and poor now live further apart.
  • The general pattern is of increases in social equality during the 1970s followed by rising inequality in the 1980s and 1990s. Changes since 2000 are less clear.
  • Both poor and wealthy households have become more and more geographically segregated from the rest of society.

The chart below shows poverty and wealth measures for Great Britain 1970-2000




2. PUBLIC ATTITUDES TO ECONOMIC INEQUITY

This study is an investigation into public attitudes over economic inequality covering the last 20 years.

Public Attitudes to economic inequality

  • Clear majorities in all groups think that the income gap between high and low income groups is too great. However, some socio-economic groups – particularly those on higher incomes - are significantly less likely than others to believe this.
  • There is widespread acceptance that some occupations should be paid more than others: but the gap between high and low-paid occupations is far greater than people think it should be.
  • People do not necessarily think that those on low incomes are underpaid, but those on higher incomes are very overpaid.
  • In 2006, a majority of people (55%) thought there was quite a lot of poverty in Britain, only 19% thought poverty had fallen over the last decade, and close to half (46%) thought poverty would increase over the next 10 years. Only 13% thought it would fall.

Public Attitudes to Redistribution

Public attitudes to redistribution are complex, ambiguous and apparently contradictory.

  • Far more people think the income gap is too large than explicitly support the principle of redistribution.
  • 32% in 2004 agreed that ‘government should redistribute income from the better-off to those who are less well-off’.
  • There is evidence, however, of support for redistributive policies in practice:
  • Large majorities support extra taxes to pay for health and education but there is also concern that taxes are too high.
  • There is a general view that the low-paid pay too much in tax and the highly paid pay too little but there is no agreement about what constitutes low or high pay.

Explaining public attitudes to inequality and redistribution

In considering the contradictions in public attitudes, it is worth examining the more underlying values which people draw on:

  • Analyses that have focussed on values have divided the population in different ways, for example: ‘Samaritans’ (30% of population – those in favour of redistribution and a strong welfare state); ‘Club members’ (45% of population – they support a more conditional welfare state); ‘Robinson Crusoe’s’ (25% of population – they prefer to emphasise self-reliance and are more resistant to redistribution).
  • Beliefs about the respective roles of luck and effort in determining individual success affect attitudes to inequality, poverty and redistribution. For example, those who believe that hard work leads to success are less supportive of redistribution.
  • There is little direct empirical evidence about public attitudes regarding the causes and justice / injustice of inequality. But we do know that only 17% of people believe that large differences in income are necessary for Britain’s prosperity, whereas 58% believe that inequality persists because it benefits the rich and powerful.

Conclusion

There is growing interest in the potential effect of economic inequality on society, and emerging evidence that a high level of inequality may cause socio-economic problems.

There is considerable public concern regarding economic inequality, and certainly no evidence that people see the economic gap positively. There is also public concern with the position of those on high earnings. But attitudes are highly complex and apparently contradictory.

Future research needs to take a more sophisticated approach to talking about ‘inequality’ and ‘redistribution’ as these vary in form, and attitudes may similarly vary depending on the particular kind of inequality or redistribution that people have in kind.

Page 1 of 5 Report prepared July 2007 by the

Regeneration Partnership (Cheltenham)