Spending and welfare / The income gap and redistribution

The income gap and redistribution

In the previous section we found that a majority of people, more than two-thirds, believe it should be the government's responsibility to reduce income differences between the rich and the poor, with levels of support remaining similar to those measured three decades ago. Yet support for the government's role in providing a decent standard of living for the unemployed and, to a lesser extent, decent housing for those who cannot afford it, has declined over time - even though these activities could have the effect of marginally narrowing the income gap. To explore this apparent contradiction further, we first consider levels of concern about income inequality and support for the government's redistributive role. We explore how views on these matters inform each other and influence attitudes towards the government's role in providing welfare. 

Concern about income inequality and support for redistribution 

Since the mid-1980s, we have asked the public whether they think "the gap between those with high incomes and those with low incomes" is too large, about right or too small. To measure support for the government having a redistributive role, we have additionally asked people to identify how far they agree with the following statement: 

The government should redistribute income from the better off to those who
are less well off 

undefinedIn Figure 2.2 we see that since 1983 there has been a high level of concern about income inequality and that this has recently risen. In 2010, three-quarters of the public agreed with the idea that the income gap was too large - slightly higher than the proportion who stated this view when the question was first asked in 1983, although there has been some fluctuation in support in the intervening period. By 2012, this figure had risen to more than eight in ten, with just 14 per cent agreeing that the gap is "about right". This rise may reflect well-publicised cases of bankers' bonuses and big increases in chief executive remuneration packages in recent years, as well as the so-called 'Shareholder Spring' of 2012, during which institutional investors at Barclays, Aviva and other big firms rejected CEO pay deals. Moreover, there is some evidence that the proportion of people holding the view that the income gap is too large changes in a cyclical way, increasing during and after periods of recession, where the public are more likely to have their own incomes squeezed and to witness the impact of earnings loss and widespread unemployment. Certainly this appeared to be the case in the aftermath of the early 1990s recession, where agreement with this view rose to a high of 87 per cent. 

While more than eight in ten people think the income gap is currently too large, and as we saw in Table 2.1 nearly seven in ten believe the government has a responsibility to reduce income differences, only a little over four in ten agree that the government should redistribute income from the better off to those who are less well off. In a previous analysis of British Social Attitudes data, Rowlingson et al. (2010) suggested there is a negative reaction to the "r word" itself, which may underpin this substantially lower level of support. 

While this proportion is higher than in the mid-2000s, it remains lower than the 48 per cent recorded in the depth of the last recession in 1991 (though similar to the proportion who expressed this view in 1986, when the question was first asked). However, for the first time since 1995, we see a significantly higher proportion supporting rather than opposing government redistribution (41 per cent compared with 30 per cent). This suggests that the British public has not become less collectivist over time in its support for the government having a redistributive role, perhaps because, as suggested above, support for such a strategy primarily fluctuates in a cyclical way, increasing in times of economic hardship. 

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We have seen that there is a widespread and enduring view that the income gap is too large, and considerable support for the proposition that the government should reduce income differences. We might anticipate that these views would translate into support for the government's role in providing social security. However, we have already noted a long-term decline in support for the government's role in providing a decent standard of living for the unemployed and a decent standard of housing for those who cannot afford it - two activities that could be viewed as key aims of the welfare state. In the remainder of this chapter, we consider how public attitudes to the government's role as a provider of welfare are changing over time - and whether these reflect either the enduring concern about income inequality and support for its reduction, or the declining support for the government's role in supporting the most disadvantaged sections of society. Further, we consider the direction of recent changes in attitudes and what this might mean for the government's welfare reform programme. 

Notes

1. 1987 was chosen as the starting point for our analysis in order to use a comparable measure of social class with all subsequent years.

2. The bases for Table 2.5 are as follows:

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3. The bases for Table 2.6 are as follows:

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4. The bases for Table 2.7 are as follows:

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5. The bases for Table 2.8 are as follows:

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