Divided Britain

Published on: 
01 July 2016
Written by: 

Alison Garnham

Chief executive

In searching for explanations for the cataclysmic events of 23 June, commentators have alighted on the obvious voting divides by age, region and level of disadvantage across the UK. The amazing thing is that this should come as any surprise.

We have been ill-served by an impoverished and badly informed public debate about what has actually been happening in homes and neighbourhoods across Britain since the recession in 2008 – and I don’t mean immigration. As we now face the possibility of further recession and austerity, it is time for an urgent catch-up for those who have failed to spot the obvious conclusions to draw about what has been going on in our society.

Since 2010, in addition to high prices for essentials, wages have been stagnating (and are only now beginning to improve) and successive budgets and spending reviews have taken out more than £80 billion from our benefits and public services. At the same time, housing and childcare costs have risen exponentially. Some reforms have been so poorly implemented – for example changes to ESA and disability benefits - that costs have in fact risen. Meanwhile, the lion’s share of cuts have been imposed on families with children (we estimate about 70%) and in particular on low-income families in paid work (we estimate about 60%). Pensioners have been protected from these cuts.

In total, more than £32 billion cuts to benefits and tax credits have been imposed on the lowest income households in the UK – mostly low-paid. Yet, despite efforts to stimulate debate about the consequences of this, there has hardly been any serious coverage of the issue and politicians have been able to claim that we are ‘all in it together’ and that ‘those with the broadest shoulders will bear the greatest burden’. Nothing has been further from the truth.

Up until 2015, the Treasury’s own distributional analysis showed that although the richest 10% had taken a bit of a tax hit, the biggest losses were being felt by the poorest half of households in the population, as a proportion of their income – the only fair and reasonable way to look at it. After 2015, the Treasury has decided it will no longer publish this data, so academics have taken up the task of showing how people have fared. It should be no surprise to anyone to learn that nearly all the cash losses have fallen on the poorest households as a proportion of their income, compared to the richest.

In fact the richest half of the population has gained through things like the raising of the personal tax allowance - 80% of the gains from changes to tax thresholds. The cost - £12 billion alone for the personal tax allowance rises - has been borne by the poorest households. No savings have been made to reduce the deficit, as losses for the poorest have gone to fund gains for the richest. This is without going into the impact on women, disabled people and carers.

This was reverse Robin Hood - the experience of austerity could not have been more divided.

This seismic shift in our treatment of rich and poor families, this redistribution from the poorest to the richest, has gone virtually unremarked upon, as if it were a victimless crime. No mention at all during the last election campaign, by which point all this was already public knowledge. This can only be described as a rank dereliction of duty by opinion formers. People affected by these cuts must feel as though they are living in virtual reality, with apparently no-one talking about the financial losses and hardship they are experiencing – except for the slightly raised eyebrows and mystification about the rise of food banks.

This week, the latest official child poverty figures revealed that by 2014/15, there were 200,000 more children living in poverty in the UK. Previously published projections suggest child poverty will continue to rise further - by 1.2 million (IFS) and 1.5 million (Resolution Foundation) by 2020. This rising poverty will steal away children’s life chances and we will all pay the price economically and socially. Our kids will pay in person.

No wonder voters felt in the mood to protest. If people see no part of their own life experience reflected in the political debate, and no solutions in sight, it’s no surprise they take the opportunity to make their feelings known.