There are three striking things about the distribution of income in the UK. Inequality - The top fifth earn on average 6 times as much a year as the lowest five percent.
Welfare dependence - Over half of household income of the bottom five percent takes the form of state support.
Redistribution - Without that state support, households in the top five percent would earn almost 14 times the income received by the lowest five percent.
It is doubtful that the UK can continue to support redistribution of this magnitude. Nevertheless, we should understand the implications of further cuts in welfare - more inequality.
(Data for 2007/8. Source: Households Below Average Income, Department for Work and Pensions. Equivalised household disposable income before deduction of housing costs, using OECD equivalisation scale.)
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