How unfair inequality is poisoning Britain
By Anita Sangha and Will Snell | With contributions from members of our expert contributors network and other experts
OUR OPEN LETTER TO PARTY LEADERS
MEDIA COVERAGE
EXECUTIVE SUMMARY
Unfair inequality harms society like carbon monoxide harms the human body. Inequality damages our economy, our democracy, our social fabric, our public services and our environment. Each of these aspects of society supports the others, and so when one starts to fail, it can have a domino effect - multiple organ failure on a grand scale.
Unfair inequalities across these different areas don’t just reinforce each other; they also undermine the prospects for making progress on policy goals such as reducing NHS waiting lists, boosting growth and breaking down barriers to opportunity. Unfairness creates a vicious cycle because unfair societies are less healthy, productive, efficient, resilient and cohesive.
Britain in 2024 is a society suffering from the carbon monoxide poisoning of unfair inequality - of wealth, income, health and education, and between regions and people of different ethnicities, genders, social classes and disabilities. The canaries in the coal mine are no longer singing. This is a warning sign that, based on our current trajectory, unfair inequality is going to get worse over the next five years, with knock-on impacts on our society, economy and democracy.
Consider some of the statistics. Today, the average person in the South-East of England is £195,400 wealthier than their counterpart in the North of England; this gap is projected to increase to £229,000 by 2029. Today, 30% of children live in relative poverty; this is projected to increase to 33% by 2028, but the SDG target that the government has signed up to is to halve all forms of poverty by 2030. Today, 1.8 million children live in overcrowded housing; this is projected to increase to 2 million children by 2030.
The Health Foundation forecasts that "on current trends, inequalities in health will persist over the next two decades: people in the 10% most deprived areas can expect to be diagnosed with major illness a decade earlier than people in the 10% least deprived areas".
To address this, the next government has to take bold action to reduce economic inequality and build a fairer society. If we don’t make progress on this agenda over the next parliament, the 2029 election result might see the far-right making gains that we have never seen before in this country.
Reducing unfair inequality will not only unlock progress on these policy priorities, but will pay for itself over time. For example, improving housing quality will save the NHS and the social care sector £1.5 billion per year; investing in early years education will generate a 30% return for the Treasury; and every extra pound invested in HMRC enforcement will yield £18 in additional tax revenues.
This report sets out what the evidence tells us about how much more unfair Britain could become over the next five years, why this matters, and what we can do about it. It doesn’t cover every issue and it is impossible to predict the future, but the direction of travel is clear. Urgent action is needed by the next government to turn things around.
INTRODUCTION: UNFAIR INEQUALITY AS POISON
Imagine a miner working a seam in an underground coal mine. Unnoticed, a dangerous amount of carbon monoxide is building up in the mine tunnels. The miner breathes in the poisonous fumes and feels dizzy and nauseous, but carries on working until he passes out. By this point the carbon monoxide has damaged the miner's brain, heart, and other organs by impeding his blood's ability to carry oxygen to body tissues and vital organs. Unless he receives immediate help, one or more of his vital organs might start to fail. These organs support each other, so one failing organ could trigger others to fail in a domino effect, with death the likely outcome.
Now imagine that this person is a representation of Britain today. Each of their organs represents part of our society - our economy, our democracy, our social fabric, our public services and our environment. Over recent decades, we have evolved a form of capitalism that minimises the role of the state in favour of untrammelled free markets, which has led to large increases in inequality.
Inequality formed from different levels of effort can have positive economic impacts, and has some moral justification. However, much of the inequality that we see in Britain today is generated by factors beyond individuals’ control, by inequality of opportunity.
This form of inequality is like carbon monoxide. It damages our economy, our democracy, our social fabric, our public services and our environment. Each of these aspects of society supports the others, and so when one starts to fail, it can trigger failures among the others. A lack of support in one area (e.g. social security or housing) can increase demand for support from other areas (e.g. health or education) just at the point that they are under increased pressure themselves. For example, inadequate social security exacerbates poverty, which undermines education and health outcomes but also increases pressure on the education and health systems: recent JRF research found that 9 in 10 primary school and primary care staff say that pupils or patients experiencing hardship has an impact on them as staff, their colleagues or the wider organisation they work for.
Britain in 2024 is a society suffering from the carbon monoxide poisoning of unfair inequality - of wealth, income, health and education, and between regions and people of different ethnicities, genders, social classes and disabilities. The canaries in the coal mine are no longer singing.
Unfair inequalities across these different areas reinforce each other and undermine the prospects for making progress on policy goals such as reducing NHS waiting lists, boosting growth and breaking down barriers to opportunity. Unfairness creates a vicious cycle because unfair societies are less healthy, productive, efficient, resilient and cohesive.
Consider the issue of wealth inequality. The far higher rates of consumption of a wealthy few contribute far more to carbon emissions than those at the lower end of the wealth distribution. However, the impacts of climate change on people’s lives, from health to educational attainment, are felt most by people with the least wealth, despite their being least responsible and least well-protected. At the same time, those with the least are expected to pay the biggest price for the transition to net zero. As a result, the gap between the rich and the poor will become even wider, and greater economic inequality will fuel higher levels of social inequality, eroding the social fabric of society, undermining people’s trust in democratic politics, and increasing support for populist parties.
Unless the next government drastically changes course, the situation will be even worse in a few years' time, and we could be looking at cascading failures across our economy, society and democracy, to say nothing of the environmental situation, as the country deals with the simultaneous pressures of a widening wealth gap, sluggish growth that continues to mostly benefit the well-off, further pressure on people on low incomes, collapsing public services, and increasing levels of disengagement with democratic politics.
The good news is that, if the next government takes urgent action to build a fairer society, this will unlock progress on those policy goals. Action to build a fairer Britain is popular with the public, and is therefore politically expedient as well as a moral requirement.
And there is no shortage of evidence-based, expert-backed policy solutions to achieve this objective, which will pay for themselves over time. For example, improving housing quality will save the NHS and the social care sector £1.5 billion per year; investing in early years education will generate a 30% return for the Treasury; and every extra pound invested in HMRC enforcement will yield £18 in additional tax revenues.
Fairness is the oxygen that can restore the health of our society, our economy and our democracy, as well as unlocking the rapid action on net zero that we must see in the next five years if we are to avert climate catastrophe.
UNFAIRNESS IN BRITAIN TODAY
We believe that fairness has five components:
- Fair essentials: Everyone should have their basic needs met so that no one lives in poverty, and everyone can play a constructive role in society
- Fair opportunities: Everyone should have a decent chance to succeed in life, so we should remove the key barriers to equal opportunities
- Fair rewards: Everyone’s hard work should be rewarded on the basis of their contribution to our society and economy
- Fair exchange: Everyone should contribute to society by paying the taxes they owe, and in return be supported by society when they need it
- Fair treatment: Everyone should be treated according to need, enjoying equal respect and equal influence on decisions made in their name
Read more about the fair necessities
The evidence suggests that unfairness matters for five reasons:
It is morally unacceptable
A wide range of philosophical and religious traditions emphasise the intrinsic importance of fairness, and the British public agrees - repeated surveys show that fairness is at the top of most people's priorities for society
Fairness is instinctive. People have an inherent belief that people should be rewarded in proportion to their contribution (hard work and talent), and few object to the idea that the ‘tall poppies’ who produce great economic benefits should be rewarded as a result. Most people prefer the idea of proportional outcomes to equal outcomes, which undermine incentives and ignore individual agency. They also believe in the idea of reciprocity: that everyone should contribute to society as far as they are able, and should be supported by society in return when they need it.
A further core belief is that everyone should have the same opportunities to realise their full potential. Many believe that we need to do more than simply reducing overt discrimination to ensure that everyone has similar life chances, and a majority believe that inequality has become too high to ensure genuinely equal opportunities for everyone. People also have a strong belief that everyone should be treated equally in terms of due process, respect, social status and political influence. And there is a consensus that everyone should have their basic needs met, so no one lives in poverty, regardless of how they got there.
Repeated surveys show that fairness is at the top of most people's priorities for society. YouGov found that most people think in terms of social issues such as fairness, compassion and tolerance, rather than economic issues such as poverty, and that a fair society means a decent minimum standard of living for all; being secure and free to choose how to lead our lives; developing our potential and flourishing materially and emotionally; participating, contributing and treating all with care and respect of whatever race or gender; and building a fair and sustainable future for the next generations.
It harms our economy
Unfairness deprives thousands of potential wealth creators of the chance to contribute to the economy, and incentivises business models that are based on extracting wealth instead of creating it
Growth and redistribution are interdependent. The idea that we have to choose between growth and redistribution (or justice, or equality, or fairness) is wrong-headed. The two things aren’t in opposition; in fact, they are interdependent. By the same token, low levels of growth and high levels of inequality feed off each other. As the Resolution Foundation and LSE suggested in Stagnation Nation, the interim report of the Economy 2030 Inquiry, “the toxic combination of slow growth and high inequality was posing challenges for low-to-middle income Britain’s living standards even before the post-pandemic cost of living crisis struck.” Fairer societies are more prosperous, because they are more efficient and more productive. Strong, resilient economies depend on a secure, healthy and well educated workforce and robust public infrastructure, both of which depend on well-funded public services. The Stagnation Nation report outlined what a real plan for growth should include, such as upgrading the skills of the UK population (focusing in particular on improving schools), improving infrastructure, and treating Net Zero as an opportunity to increase growth and create high-quality jobs.
Cutting back the state and removing regulations would harm growth. Unfair (i.e. unequal) societies harm economic growth because they undermine efficient markets; the poor don’t spend money while the rich hoard it offshore. The link between hard work and reward is corrupted when a lot of wealth is unearned, failure is rewarded and fair and open competition is undermined. Unequal societies deny people opportunities to develop and contribute to the economy, a huge waste of potential. High levels of inequality dampen both demand and output, as years of austerity have shown. And cutting taxes has no impact on economic growth, while giving money to the richest does not magically ‘trickle down’ to everyone else.
It undermines our democracy
Unfairness damages people's faith in democracy, trust in government and engagement in politics, and opens the door for far-right populists to sell a misleading but powerful story about the causes and solutions
Politics is dominated by people with more education and social and economic capital. As a result, it is not representative of everyone in Britain, and it is particularly unrepresentative of people with fewer economic resources and lower social status, as well as in terms of gender, ethnicity, disability and so on. There is evidence that democratic participation (such as voting rates in general elections) is lower among more disadvantaged groups and in more unequal societies.
Turnout at general elections remains low, and increasing numbers of people are voting for right-wing populist parties. These changes are particularly pronounced in groups who feel that their social status relative to other groups has declined, and that they have less influence than other groups over policy decisions. Although most people feel proud of our democracy and democratic values, a large majority are unhappy with how the system works, and feel that the ‘political elite’ don’t care about them and operate by a different set of rules. Many people, especially those in more disengaged groups in society, are frustrated by a democratic system that isn’t doing enough to make their lives better, and feel let down by politicians.
Trust in politicians (and the belief that they will act in line with your interests or preferences) has been declining for years in the UK and other countries, but levels of trust in the UK are particularly low. In 1944, one in three people in Britain said politicians were ‘out for themselves’, but today almost two in three think this. Lack of trust can lead to a spiral of democratic decline as voters turn to populism, and can undermine the governments’ ability to deliver better policy outcomes.
Find out more about political inequality and trust in politics (see also the latest BSA findings)
It damages our society
Unfairness creates social as well as economic divisions, weakening social cohesion and resilience, worsening social problems like crime and mental illness and increasing the risks of social unrest
Economic inequality is bad not only for the poor but for everyone in society. Where inequality has flourished in order to drive up economic growth, the result has been worse outcomes for everyone. For example, more equal countries see higher levels of child wellbeing, trust, life expectancy and educational scores. More unequal countries see higher levels of problems such as mental illness, drug use, infant mortality, obesity, murder and imprisonment.
Despite the widespread view that the pandemic brought communities closer together, the opposite is true. The proportion of people who said they could trust others in their neighbourhood declined from 69% in 2012 to 56% in 2020. Lockdown made people feel more isolated and less similar to others in their community, although people’s willingness to help their neighbours remained fairly stable. Social cohesion declined during the pandemic among all groups and regions, but especially among people in deprived neighbourhoods, young people and people from Pakistani, Bangladeshi and Black backgrounds.
Throughout history, when the scales of power heavily favour the ruling elite, it leads to a surge in economic inequality, enriching the wealthy and impoverishing the less privileged. As more individuals aspire to join the elite, dissatisfaction with the established order intensifies, often resulting in social conflict and ultimately social collapse.
Find out more about social problems, social cohesion and social conflict
It is bad for the environment
Unfairness undermines support for the bold and urgent action needed to curb carbon emissions and to protect nature, by focusing attention on more pressing short-term issues and by raising fears that the costs of action will fall on the poorest
The debate about whether we transition to a decarbonised economy is largely resolved, but the debate over how we transition has only just begun, and will dominate public and political discourse for decades to come. Its central question is how the transition can be made in a way that is fair – in the words of Chris Stark, head of the Climate Change Committee, it is ‘almost the only question’. As we saw with the ‘gilets jaunes’ protests in France, delivering the transition in a fair way is crucial to securing legitimacy for and efficacy of the transition and building enduring public and political support. The transformation must be rooted in fairness – not only because the poorest communities are least responsible for these crises and the worst affected, but because unless action to restore nature and decarbonise the economy is rooted in social and economic justice, it won’t succeed. The public have a veto over the net zero transition and will stop it if it isn't fair.
People with higher incomes tend to consume more, and thereby have higher carbon footprints. This manifests itself across multiple sectors. To use transport as an example, people in the lowest income households are half as likely to use cars, and are more likely to walk, than those with a higher income. 15% of people in the UK take 70% of all flights, while nearly 50% of the population do not fly at all in a given year. Fair societies, where everyone has a good standard of living, are compatible with the emissions reductions that are necessary to keep global heating under the 1.5 degrees target. But the only way to achieve this is to reduce inequality, and in particular to curb the carbon emissions of the richest in society, which is more important than trying to reduce or control population growth. The richest 1% could consume as much energy as the provision of decent living standards to 1.7 billion people.
Find out more about a fair transition to net zero and environmental inequality