How does the UK compare to its peers in the OECD? The indicators used in the Fairness Index are not directly comparable, as they are not collected in all countries. For the purposes of this international comparison, we have selected five indicators that are collected on a regular (normally annual) basis by all OECD countries - one for each of our five fair necessities - and have collated time-series data for each of them going back to the year 2000.
The Institute for Fiscal Studies also published a comprehensive set of European and North American country studies as part of the Deaton Review of Inequality in November 2023, looking at labour market and income inequalities, and their interactions with education and gender in particular.
Fair essentials: Poverty
Everyone should have their basic needs met. This means that no one should live in poverty. Poverty means that people do not have sufficient material resources to adequately meet immediate material needs. But poverty is not just about money and what it can buy – it affects every aspect of someone’s life, from their health and wellbeing to their social status and their ability to live the life that they want to live.
The poverty rate in the UK is 22% - the joint 5th highest rate in the OECD (as of 2019).
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Fair opportunities: Wealth inequality
Wealth inequality is a barrier to fair opportunities. We cannot reasonably say that a system that treats everyone equally is fair when peoples' starting points in life are so different. People can only enjoy equal opportunities to succeed when there is a level playing field. Even in a theoretical world of perfectly equal opportunity, very unequal outcomes in one generation lead inexorably to unequal opportunities in the next.
The wealthiest 1% of households in the UK own 21% of all wealth - the 5th lowest proportion in the OECD (as of 2021).
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Fair rewards: Income inequality
Many people think that we live in a meritocracy, where talent and hard work are rewarded by success and status, and opportunities are there for whoever is willing to work for them. But high levels of income inequality, which are completely out of proportion to ‘merit’, demonstrate that we do not live in anything like a meritocracy.
The top 1% of earners in the UK earn 13% of all income - the 14th highest proportion in the OECD (as of 2021).
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Fair exchange: Tax
A fair society should be based around principles of fair exchange: people are supported by the state when they need it, and, in return, they support the provision of public services by paying taxes. Low tax receipts undermine public services. Low tax revenues relative to GDP are a sign that the tax system is not designed or run fairly and that public services are under-funded.
Tax revenue is equivalent to 33.5% of GDP in the UK - the 17th lowest proportion in the OECD (as of 2021).
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Fair treatment: Democracy
Everyone should have equal political status, regardless of their economic status. This should include equal influence on decisions made in their names, equal voting rights, equal access to power, and equal opportunities to stand for office, alongside fundamental personal and political liberties such as freedom of conscience, speech and association.
The UK’s ‘egalitarian democracy’ score is 0.705 (i.e. 70.5%) - the 16th lowest score in the OECD (as of 2022).
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