Income Inequality

Lord Foulkes of Cumnock Excerpts

Thursday 21st January 2016 Lords Chamber

Asked by

[Lord Foulkes of Cumnock]

To ask Her Majesty’s Government whether they intend to commission research into the impact on social cohesion of income inequality.

[The Commercial Secretary to the Treasury (Lord O'Neill of Gatley) (Con)]

My Lords, income inequality is falling and is close to its lowest level since the mid-1980s. The Government have taken action to reduce inequality and poverty by boosting the incomes of those in work through the new national living wage, by taking 3.8 million working-age individuals out of income tax since 2010 and by reducing worklessness, with more people now in work than ever before.

[Lord Foulkes of Cumnock (Lab)]

My Lords, with FTSE 100 chief executives—only four of whom actually founded their companies—earning 183 times the median earnings for a full-time worker, and with the chief executive of HSBC, for example, receiving £7.5 million in the year that its profits went down by 17%, does the Minister agree that it is a miracle that there is not more social unrest in this country? Will the Government consider setting up a commission to make recommendations on ways in which this terrible income inequality can be dealt with?

[Lord O'Neill of Gatley]

My Lords, as I suggested in my opening formal comments—and I am happy to provide plenty of data to back up the substance because it is so wide—true measures of income inequality, whether in terms of disposable income or of what is called original income, have for many years shown a decline in income inequality. How chief executives are remunerated by their companies, particularly in the quoted sector, depends on the decisions of their boards and shareholders.