British unite against unequal society

90% agree distribution of income is unfair

An overwhelming majority of Britons think incomes have become too unequal. For the first time, all social groups agree the gap between high and low incomes is excessive.

In a result that will sound a warning-bell for the Government days before a Budget expected to include pre-election tax-cuts, nine out of 10 Britons, the highest proportion yet, think the distribution of income is unfair. There is also a remarkable consensus between high- and low-income groups, a survey will show later this week.

The increase in the proportion agreeing the gap between high and low incomes is too big is not too surprising, given outrage over "fat-cat" pay awards. However, high earners used to be far less likely than average to agree. Concern about inequality has increased most among this group.

According to the 13th annual survey of British Social Attitudes, to be released on Thursday, concern about inequality has increased steadily since 1983, when 72 per cent said the income gap was too large. This climbed to 80 per cent by 1990 and 85 per cent in 1994. The latest survey shows another increase to 87 per cent last year.

This occurred despite the fact that the income gap has stopped growing for the first time in 15 years. Figures last week showed the shares of total income taken by the top and bottom tenths of the population have remained static since 1990, at 26 per cent and 2.5 per cent respectively. For the second year running, high earners said they are broadly satisfied with their pay. In previous surveys they, like low earners, were disgruntled.

The likelihood that inequality will increase is shown by the fact that expectations about pay have diverged. The survey, conducted last year of more than 5,000 people, shows the proportions expecting to do either very well or very badly in the earnings league have risen. Even though the survey also provides evidence that there is little concern about job insecurity, the results will provide ammunition for the Labour Party. It points out that tax cuts since 1980 have disproportionately favoured the well-off, and the shadow chancellor, Gordon Brown, has pledged to introduce a bottom rate of income tax of 10p to 15p in the pound.

Earnings inequality has risen faster in Britain since 1980 than in any other industrial country apart from the US. Britain has the third- highest proportion of low-paid workers after the US and Canada.

But the Government has been almost alone in lack of concern about the trend towards greater inequality. Despite criticism by the Organisation for Economic Co-operation and Development, which praised most other aspects of government policy, ministers oppose US and Japanese proposals for the OECD to study ways of slowing the trend.

The Government is likely to draw comfort from the fact that the survey, by Social and Community Planning Research, found almost no evidence of job insecurity. Though people think it would take longer to find a new job, the proportion of the workforce in the same job for more than five years has increased. The proportion expecting to lose their job through redundancy has fallen.

Nor is there any evidence that the recession hit managers and professionals particularly hard.

They are much less likely than people from other social backgrounds to have experienced unemployment, with only 14 per cent having been unemployed compared with 29 per cent of the bottom two income categories.

However, reported hours worked have increased in successive surveys. The proportion working more than 40 hours a week has risen from 26 per cent to 31 per cent between 1985 and 1995, while the proportion working 60 hours or more has climbed from 2 per cent to 3 per cent.

Directors of privatised utilities could make pounds 30m in the Budget if John Major honours his pledge to abolish capital-gains tax, Labour said. The biggest winner, with pounds 180,000 from share options, would be Sir Desmond Pitcher, head of United Utilities, who has already been dubbed "King of the Fat Cats".