Yesterday’s OECD report which finds that income inequality has risen faster in Britain than in any other wealthy country since the mid-1970s is a wake-up call. The share of total national income held by the top 1% reached 14.3% in 2005, having doubled since 1970, and is almost certainly higher now, perhaps 16-17%. The position of the top 0.1% (about 30,000 persons in the workforce) is even more extreme. In 2007 just before the financial crash, they appropriated 5% of total pre-tax income, meaning that they had secured 50 times higher earnings than if there were equality of incomes. How did this happen? What is interesting and new about the OECD report is that it demonstrates that almost all the increase in inequality has come from financial services in the past 12 years. So what should be done? Continue reading →