Lucy Shaddock writes:
The Budget next month should end speculation about where government spending will be directed and where any cuts will fall.
For some policy areas like welfare, it’s not difficult to see how proposed changes could increase inequality, but there are other unexplored areas where existing spending is already entrenching inequality.
Take transport for example, an unglamorous policy area which is continually overlooked.
There is an annual £5.4bn spend on transport subsidies – more than double the amount we spend on NHS A&E services across the country.
For those of us regularly stranded by ‘leaves on the track’, it’s understandable that transport headlines focus on price hikes, poor services and frustrated commuters.
But our new report Taken for a Ride reveals a more fundamental and troubling problem with our system of public transport funding: it actually perpetuates inequality, and has been doing so for decades.
When looking at transport subsidies we found that, in total, the richest ten per cent of households benefit from £978 million in transport subsidy – over three times more than the £297 million received by the poorest ten per cent.
This inequality persists even when you look at household level and adjust for their different sizes, with the richest ten per cent still gaining £294 per year per household compared to the poorest households’ £162.
Perhaps more worrying is just how long this inequality has been going on.
For most of the last 20 years, the richest ten per cent has received over four times the level of subsidy of the poorest ten per cent.
This matters because it means we’re doing a fine job spending huge amounts of money ferrying the relatively well-off into decent paying jobs.
But we’re doing far less to provide those on low incomes with similar prospects.
The result is not only that the poorest are effectively locked out of decent jobs; they’re also prevented from accessing good health and education services and even cultural activities.
The problem isn’t just one of rich and poor either.
The development of a ‘Northern Powerhouse’ will be a major project this parliament, and the economic benefits of the greater connectivity that comes from infrastructure investment should be celebrated.
But investing in transport links alone is a job half done and an opportunity wasted if the poorest can’t afford to benefit, and if some regions are receiving far less support than others.
A household in the north east or north west receives about half the rail subsidy received by a household in London.
It’s even worse in Wales, where a household receives almost four times less rail subsidy than one in London.
If we can’t fix this, we’re in danger of creating growth that benefits some but leaves many others behind.
It’s not easy to turn around such institutionalised inequality, but it is possible.
Our report recommends that all government departments’ cost-benefit evaluations should consider whether new proposals increase inequality, and that the net effect of their policies as a whole should also be measured against this.
Inequality permeates every area of life in the UK, even the way we travel.
Addressing it should be a government priority.
The Budget next month should end speculation about where government spending will be directed and where any cuts will fall.
For some policy areas like welfare, it’s not difficult to see how proposed changes could increase inequality, but there are other unexplored areas where existing spending is already entrenching inequality.
Take transport for example, an unglamorous policy area which is continually overlooked.
There is an annual £5.4bn spend on transport subsidies – more than double the amount we spend on NHS A&E services across the country.
For those of us regularly stranded by ‘leaves on the track’, it’s understandable that transport headlines focus on price hikes, poor services and frustrated commuters.
But our new report Taken for a Ride reveals a more fundamental and troubling problem with our system of public transport funding: it actually perpetuates inequality, and has been doing so for decades.
When looking at transport subsidies we found that, in total, the richest ten per cent of households benefit from £978 million in transport subsidy – over three times more than the £297 million received by the poorest ten per cent.
This inequality persists even when you look at household level and adjust for their different sizes, with the richest ten per cent still gaining £294 per year per household compared to the poorest households’ £162.
Perhaps more worrying is just how long this inequality has been going on.
For most of the last 20 years, the richest ten per cent has received over four times the level of subsidy of the poorest ten per cent.
This matters because it means we’re doing a fine job spending huge amounts of money ferrying the relatively well-off into decent paying jobs.
But we’re doing far less to provide those on low incomes with similar prospects.
The result is not only that the poorest are effectively locked out of decent jobs; they’re also prevented from accessing good health and education services and even cultural activities.
The problem isn’t just one of rich and poor either.
The development of a ‘Northern Powerhouse’ will be a major project this parliament, and the economic benefits of the greater connectivity that comes from infrastructure investment should be celebrated.
But investing in transport links alone is a job half done and an opportunity wasted if the poorest can’t afford to benefit, and if some regions are receiving far less support than others.
A household in the north east or north west receives about half the rail subsidy received by a household in London.
It’s even worse in Wales, where a household receives almost four times less rail subsidy than one in London.
If we can’t fix this, we’re in danger of creating growth that benefits some but leaves many others behind.
It’s not easy to turn around such institutionalised inequality, but it is possible.
Our report recommends that all government departments’ cost-benefit evaluations should consider whether new proposals increase inequality, and that the net effect of their policies as a whole should also be measured against this.
Inequality permeates every area of life in the UK, even the way we travel.
Addressing it should be a government priority.
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