Rising inequality in the UK will become an electoral battleground

Households face falling real-term income growth and a spike in home-heating costs. Failure to tackle those will hurt when voters go to the ballot box, writes Phil Thornton

Rising energy bills are adding to householders’ woes (PA Wire)

Inequality of wealth and income looks set to become the dominant economic issue this year, now that Brexit has receded to become a debate over how best to implement that botched deal.

The yawning divide between the best and worse off in the UK was already well embedded before Covid-19, but the impact of the measures taken to control the pandemic have widened it. According to figures from the Office for National Statistics (ONS), the wealthiest 10 per cent of households held 43 per cent of all the wealth in Great Britain between April 2018 and March 2020. The bottom half held less than a tenth. The richest 1 per cent of households held wealth of more than £3.6m, while the least wealthy had £15,400 or less.

However, the divide is likely to have widened since March 2020, the month of the first Covid-19 lockdown in the UK, according to a survey of households released last month. It showed that more than a quarter (27 per cent, or 7m households) were either struggling to manage (4m) or in serious financial difficulties (3m). It found that for while a fifth of all UK households saw their financial situation get a little or a lot better, more saw their financial situation get a little or a lot worse (almost one in four)