Britain - a failed society

English rioters warn of more to come

Four out of five participants in summer unrest think there will be a repeat, with most believing poverty to be a factor

the Guardian,

Monday 5 December 2011 16.00 GMT

An overwhelming majority of people interviewed about their involvement in this summer's riots believe they will be repeated and one in three said they would take part in any future disorder, a study by the Guardian and the London School of Economics shows.

Of the 270 questioned in the Reading the Riots study, 81% said they believed the disturbances that spread across England in August "would happen again". Two-thirds predicted there would be more riots before the end of 2014.

Despite more than 4,000 riot-related arrests, and harsher than average sentences in the courts, many of those interviewed said they did not regret their actions.

The research project, which is the only study to involve interviews with hundreds of people who rioted across England, found they were predominantly from the country's most deprived areas. The downturn in the economy featured heavily in interviews, with many complaining of falling living standards and worsening employment prospects.

The findings come just a week after the chancellor, George Osborne, reduced economic growth forecasts, increased government borrowing and said austerity measures would be extended to 2017. The Office for Budget Responsibility is predicting 710,000 public sector job losses in the next six years.

Those questioned as part of the study were pessimistic about the future, with 29% disagreeing with the statement "life is full of opportunities" – compared with 13% among the population at large. Eighty-five percent said poverty was an "important" or "very important" factor in causing the riots. The general population largely agreed, with 68% saying poverty was a significant cause of the summer unrest.

In the aftermath of the August riots, the prime minister was quick to dismiss the idea that poverty was a factor in the disorder. "These riots were not about poverty," David Cameron said. "That insults the millions of people who, whatever the hardship, would never dream of making others suffer like this." However, last week the independent panel Cameron set up to take evidence from victims of the riots concluded that poverty was an important factor.

It found that more than half of those who had appeared in court proceedings relating to the riots had come from the most deprived 20% of areas in Britain. The report added to a growing body of evidence about the poverty and alienation that characterised those who took part in the England riots.

Only 51% of rioters interviewed by the Guardian/LSE said they felt "part of British society" – compared with 92% of the wider population.

Many said they were angry about perceived social and economic injustice, complaining about lack of jobs, benefits cuts and the closure of youth services. Just under half of those interviewed were students, and younger interviewees often expressed frustration over the increase in tuition fees and the scrapping of the education maintenance allowance.

Overall, the rioters questioned had lower levels of educational attainment, with a third of adults educated to GCSE level and one-fifth having no educational qualifications at all. Interviews with rioters typically took place in or near some of England's most deprived estates.

Government data reveals that two-fifths of the young people who have appeared in court in connection with the riots were receiving free school meals – a key indicator of deprivation. Two-thirds have been identified as having special education needs – a proportion three times higher than for the population as whole.

For many of those not in education, unemployment was the norm among the rioters who were interviewed. They repeatedly complained about their struggle to find work – with some even saying they sought out and looted shops that had rejected their job applications.

Last week it emerged there are now more than a million unemployed young people in the UK. Youth unemployment – defined as the number of 16 to 24-year-olds not in education, employment or training – currently stands at 21%.

Fifty-nine percent of the rioters interviewed in the study who were of working age and not in education were unemployed

Income inequality growing faster in UK than any other rich country, says OECD

Top 10% have incomes 12 times greater than bottom 10%, up from eight times greater in 1985, thinktank's study reveals

the Guardian,

Monday 5 December 2011 10.39 GMT

Income inequality among working-age people has risen faster in Britain than in any other rich nation since the mid-1970s, according to a report by the OECD.

The thinktank says the gap has come about due to the rise of a financial services elite who, through education and marriage, have concentrated wealth into the hands of a tiny minority.

Economists from the group, which is funded by developed-world taxpayers, say the annual average income in the UK of the top 10% in 2008 was just under £55,000, about 12 times higher than that of the bottom 10%, who had an average income of £4,700.

This is up from a ratio of eight to one in 1985 and significantly higher than the average income gap in developed nations of nine to one.

However, the report makes clear that even in countries viewed as "fairer" – such as Germany, Denmark and Sweden – this pay gap between rich and poor is expanding: from five to one in the 1980s to six to one today. In the rising powers of Brazil, Russia, India and China, the ratio is an alarming 50 to one.

The OECD warned about the rise of the top 1% in rich societies and the falling share of income going to poorer people.

This trend is especially pronounced in Britain, where the dramatic rise in inequality has been fuelled by the creation of a super-rich class. The share of the top 1% of income earners increased from 7.1% in 1970 to 14.3% in 2005.

Just prior to the global recession, the OECD says the very top of British society – the 0.1% of highest earners – accounted for a remarkable 5% of total pre-tax income, a level of wealth hoarding not seen since the second world war.

At the same time as accumulating great wealth, the rich have seen tax rates fall. The top marginal income tax rate dropped from 60% in the 1980s to 40% in the 2000s, before its recent increase to 50%.

The buildup of riches was partly economic: the higher-paid worked longer. Since the mid-1980s, annual hours of low-wage workers remained stable at around 1,050, while those of high-wage workers rose almost 10% to 2,450 hours.

But the concentration of resources in the highest rungs of Britain's society was also a social phenomenon. Unlike in many other nations, the earnings gap between the wives of rich and poor husbands in Britain has grown from £3,900 in 1987 to £10,200 in 2004.

Although the OECD figures stop just before the recession, experts say the trend continued into the downturn.

Paul Johnson of the Institute for Fiscal Studies said that in the UK "2009-10 incomes went up incredibly fast (at the top end) possibly because the new top rate of tax was coming in".

He pointed out that the growth in the City and bankers' bonuses had played a large part in creating this divide. "If you look at who is racing away, then half the top 1% of high earners work in financial services," he said.

He cited the research of Mark Stewart, a professor of economics at Warwick University, who has shown that "almost all the increase in inequality has come from financial services" in the past 12 years.

Such disparities, the thinktank said, could not be blamed on globalisation but a trend in labour and social policies in rich nations that had helped the wealthy.

Although spending on public services in Britain had gone up in the past decade, at the same time benefits to the poor were worth less and taxes were less redistributive.

The effect has been a dramatic weakening in the state's ability to spread wealth throughout society. From the mid-70s to mid-80s, the tax-benefit system offset more than 50% of the rise in income inequality. It now manages just 20%.

The OECD warned of sweeping consequences for rich societies – and pointed to the rash of occupations and protests, especially by young people, around the world. "Youths who see no future for themselves feel increasingly disenfranchised. They have now been joined by protesters who believe they are bearing the brunt of a crisis for which they have no responsibility, while people on higher incomes appeared to be spared," the OECD said.

It was a paradox, said the OECD, that such moves had not been grounded in popular support. Michael Förster, author of the OECD's Divided We Stand report, said: "In almost all countries apart from the US and Japan, more than 50% of people say that inequality is too high. In the UK, it is 65% so I think everyone agrees it is a problem."

To rebalance society "for the 99%", the authors call for a series of measures focusing on job creation, "increased redistributive effects" and "freely accessible and high-quality public services in education, health and family care".

When it was pointed out that British government plans would instead lead to public sector job cuts of 710,000, more child poverty and a hike in university fees, the OECD's authors said debt was an issue for governments but urged them "not to cut social investments".

Monika Queisser, the head of OECD's social policy division, said: "The OECD agreed that fiscal consolidation was important. We want to governments to see social expenditures as investment so we would want to see, say, early years [funding] rising."