UK most unequal country in the West

Huge gap between rich and poor in Britain is the same as Nigeria and worse than Ethiopia, UN report reveals

Britain is now the most unequal country in the Western world, an authoritative new United Nations report reveals. The gap between rich and poor is as great as in Nigeria.

Detailed statistics in the Human Development Report published last week also demonstrate that inequality has grown sharply during Conservative rule and that the poor in Britain now have to live on much the same incomes as their equivalents in Hungary and Korea.

While growing inequality might once have been a cause for congratulation - Margaret Thatcher called on us to "glory" in it - the consensus among experts in such bodies as the Organisation for Economic Co-operation and Development, the rich nations' club, and even the World Bank is now moving against.

Lady Thatcher, like Ronald Reagan, believed that if the rich got richer, everybody would benefit. Now many economists believe that inequality hinders growth. In an unpublished paper Michael Bruno, chief economist of the World Bank, says: "Reducing inequality not only benefits the poor immediately but will benefit all through higher growth."

The United Nations Development Programme, which published the Human Development Report, said last week: "The United Kingdom, unfortunately, has an exceptionally high degree of inequality."

The report shows that the poorest 40 per cent of Britons share a lower proportion of the national wealth - 14.6 per cent - than in any other Western country. This is only marginally better than in Russia, the only industrialised nation, east or west, to have a worse record. Measurements of the gap between rich and poor tell a similar story. The richest fifth of Britons enjoy, on average, incomes 10 times as high as the poorest fifth. Britain ties for the worst performance by this yardstick among Western nations with Australia. That country was run for more than a decade by a Labor government which has heavily influenced the policies of Tony Blair.

The gap in Britain and Australia is exactly the same as in Nigeria, much worse than in Jamaica, Ghana or the Ivory Coast and twice as bad as in Sri Lanka or Ethiopia.

The British poor are much better off in absolute terms than the poor in most Third World countries, but they are worse off than those in other Western nations. The poorest fifth of Britons have an average per capita income 32 per cent lower than their equivalents in the US and 44 per cent lower than in the Netherlands.

Comparison with earlier Human Development Reports shows that inequality is growing fast in Britain. The 1991 report ranks Britain around the middle of industrialised countries both for the share of national income that went to the poorest two fifths of the population (17.3 per cent) and for the gap between the richest and the poorest fifth (6.8 times).

Mr Bruno's paper identifies Britain as one of only a handful of countries where inequality is increasingly rapidly. The Human Development Report also highlighted the world's billionaires - observing that the 358 people with assets of more than $1bn were worth more than the combined annual income of 45 per cent of the world's people.

But last week's issue of Forbes Magazine showed that the figures were out of date. There are now 447 billionaires. According to calculations by an American think-tank, their combined wealth is now worth more than the annual incomes of at least half the world's population.