Britain Doesn't Have an Inequality Problem

Is UK wealth inequality actually rising? Wes Streeting calls inequality "the fracture running through modern Britain", and the coming budget leans on the same story. Neil Woodford has spent weeks in the data, and it says something very different.

In this episode, Neil and Jon work through what the official numbers show: the top 10 percent's share of British wealth was 56 percent in 1980 and 57 percent four decades later, flat through the biggest asset boom in the country's history. They explain why compounding means wealth gaps should widen automatically, and what cancelled it: the occupational pension revolution, faster pay growth at the bottom, and a tax system where the top 1 percent of earners now pay 28 percent of all income tax.

Then the measurement problem. The gap between Britain's richest and poorest fifth is 12 to 1 before taxes and benefits, and 3.3 to 1 after. Same country, same year, same statisticians. Which number you get quoted depends on who is quoting it.

Finally: does inequality actually damage growth? Neil's answer, and what it means for the tax rises now being floated ahead of the budget.