Income and Wealth Inequality

Lord Dubs Excerpts

Wednesday 26th November 2014 Lords Chamber

Asked by

[Lord Dubs]

To ask Her Majesty’s Government what assessment they have made of the current levels of income and wealth inequality in the United Kingdom.

[Lord Newby (LD)]

My Lords, according to the latest ONS statistics, income inequality in the UK is lower than when this Government came into office. Recent ONS data have also found that wealth inequality has remained unchanged since this measure began in 2006.

[Lord Dubs (Lab)]

My Lords, there may be some dispute about those figures, but for the moment let us go along with them. Is the Minister aware that today, or yesterday, the Institute of Directors, hardly a hotbed of left-wing views, denounced a pay package for a senior executive as being “excessive and inflammatory”? The chief executives of our leading companies have seen their average pay go up from £4.1 million to £4.7 million. That is at a time when the largest network of food banks says that increased demand for food bank services has gone up by 38%. Is that not a gross condemnation of our society?

[Lord Newby]

My Lords, I completely agree with the noble Lord that many directors have had pay increases which bear no relation to either pay increases that other people have had or the performance of their company, and that is why this Government have introduced a raft of measures to make firms more accountable to their shareholders for the pay packages that directors get. However, I remind the noble Lord that those people who are in the top 1% of wage earners and whose pay has gone up now contribute some 28% of the total income tax collected.