In today's column, Polly Toynbee asks for an:
open discussion about the danger of infinite inequality escalation.
And she probably is looking for something more sophisticated than "it's OK, it is by definition finite." So let's get into the facts. Polly writes:
In personal property and liquid assets, the top 10% owns half of everything. The bottom 50% of the population owns just 6%. Count liquid assets alone, and the top 1% owns 63% while the bottom half owns just 1%. And this wealth inequality is growing fast, year on year.
Read that, and you might be surprised to learn that in in 1976, the most wealthy 1% owned 21% of marketable wealth, and that in 2003 that figure was, er, 21%. In 1976, what the Inland Revenue refer to as the "most" wealthy 50% owned 92% of marketable wealth, and in 2003 that figure was 93% (source: Inland Revenue). This is not fast growth -- in fact both figures are in decline from their peak in round about 2000.
It is true that inequality in what the Inland Revenue calls "Marketable wealth less value of dwellings" (source as above) has increased -- though it is hard to reconcile with the figures Polly cites for "liquid assets". Strip housing out of the wealth figures and the most wealthy 1% own 34% (and not 63%). This is indeed up from 1976 (29%) but down from its peak in 2002. The more wealthy 50% did indeed own 99%, up from 88% in 1976.
So, if overall wealth inequality is unchanged (and not infinitely escalating) but the inequality of ownership of assets less housing is getting more unequal, this must mean that inequality of housing wealth must be decreasing.
I also have a little trouble with this statement:
nearly 70% own their own homes
Nearly 70% of what? Surely not people. Adults? Possibly. Parents? Well, maybe. It is difficult to tell from the context. According to the national statistics website:
70% of GB dwellings are owner-occupied
Which is quite a different proposition, given that there are about 2.4 people per household (source: follow the links here).
Compare the headline:
Cameron's set has no clue what middle England earns
And this statement of Polly's:
Do they know the median (middle England) salary is just £21,000?
Which rather raises the old conundrum about whether it is possible to know something that is wrong. According to the Annual Survey of Hours and Earnings:
Median annual earnings for full-time employees for the 2004-05 tax year stood at £22,900
UPDATE: Much of what Polly writes about today, as if it were current, is in fact a couple of months out-of-date now. So, for example:
George Osborne astonishingly claims that this modest tax change is "a wake-up call to middle England"
The Law Society had the effrontery to warn that this trust tax means 10m wills must be redrawn at a cost of £2.5bn. One insurance company said 4.5m life-assurance policies would need redrawing.
actually date from at least two months ago (source), before the government amended its proposals in June (source). The changes tightened the scope of the proposals, thereby execluding many of the people who were so upset about the original proposals. To claim that they are concerned about proposals which have been specifically tightened in order to reflect their concerns is at best inaccurate précis.