Cameron and Inequality II
Fair to say that there has been some customer resistance to the idea that disposable incomes have become more equally distributed since David Cameron became Prime Minister, which he claimed in the House of Commons yesterday and about which I wrote for Independent Voices and here.
Commenters below the line simply refuse to believe the evidence. Better informed commenters point out that the figures on which the Prime Minister relied, the Office of National Statistics series called “The Effect of Taxes and Benefits on Household Income”, are not the only or even the best figures available.
This is a fair point. My point is only that the Prime Minister is entitled to rely on figures produced by the independent ONS, which say that inequality has gone back to the level of 1986. The series constructed by the Institute for Fiscal Studies (see graph above) seems to be preferred by the people who know about such things: it uses figures for individuals rather than for “equivalised individuals” in households (see page 19 here for an explanation).
However, it shows essentially the same picture, of inequality increasing during the 1980s, being broadly flat for two decades and then falling slightly since 2010. The latest figure (by eye) is comparable to that in 1990 rather than 1986.
The picture does look a little different, however, if we look at the figures for income after housing costs, shown by the red line on this graph via Declan Gaffney. On this basis, the recent reduction in inequality has taken us back only to about 2005-06.
I am not sure which set of figures is best for measuring inequality, so it is hard to say how far back the rise in inequality has been rolled, but what cannot be denied is that income inequality has fallen since 2010.david cameron, equality, inequality, pmqs
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