A truth about UK inequality

The people of Hertfordshire pay more inheritance tax than the whole of Wales and Northern Ireland combined, analysis of state figures has shown.

Residents of the home county forked out £175m to the 40pc death duty in the 2018-19 tax year, compared to £102m paid in Wales and £40m in Northern Ireland, according to latest figures by region.

The South East of England contributed more than £1bn of the overall £4.6bn haul of that year – nearly five times the £233m paid in the entirety of Scotland.

A significant chunk of UK inequality is regional inequality. Incomes are higher in some areas than others. This is different from US inequality where each individual state has inequality about the same as the national average – not exactly, but about.

But regional costs in the UK also differ wildly – as we can see from the manner that house prices are driving those inheritance tax differences. If we control UK inequality for those local price differences – so that we’re measuring consumption inequality, not income – then it drops markedly.

Actually, perhaps we should measure it properly before trying to do something about it?

12 thoughts on “A truth about UK inequality”

  1. An acquaintance told me once that his house was worth about half a million. He had bought his first flat with a £300 deposit and had traded up across years, adding no new capital. House price inflation must form a large part of the huge deposits of wealth in the south eastern quadrant of England.

    Everyone knows this in a general sort of way but the £300 story does put it into focus for me.

    Some of the rest of the wealth in that quadrant is probably generated in those jackal trades that live off government – lawyers, BBC people, that sort of riff-raff.

  2. Tim, that surely depends upon *why* you want to measure inequality. If you are the Labour Party, the main aim is to tar the Conservatives with the claim that they are greedy heartless oppressors of the poor so you redefine “inequality” every year or so to exclude any category of wealth that doesn’t fit into your narrative and include any “wealth” that does.
    Consumption inequality is more important but since women spend more than men it is a complete “no-no” – also it reflects personal choice to a great extent, not just ability to spend.

  3. The solution is obvious. Tax the shit out of the Welsh, Scottish and Northern Irish and reduce taxes in the home counties.

  4. Is the US actually that different from the UK? There are (relatively) poor states and rich states – average earning in California or New York are higher than Tennessee or Alabama, but I’m happy to accept that the differences within states are broadly comparable. But isn’t much the same true of the UK? Average earnings in the home counties are higher than in Yorkshire, but you won’t find many hedge fund managers living in Doncaster. I’m not sure that inequality within regions is that different across the UK (compared to the US).

  5. …. My move to Doncaster 2 years ago was eminently sensible. A solid old coal board semi, fully modernised and extended to 4 bedrooms, 2 bath with a long garden including a 7m by 5m brick built workshop for my woodworking for £125k. Nice friendly Yorkshire neighbours, great countryside in walking range. Local shops, not chains with, great food. One of the best indoor markets in England three days a week. On a motorway to go N S E or W within 2 miles. 5 cities with their museums and theatres within 45 min drive. 2 stations in walking distance from my home and I can be in London by train in 2 1/2 hours door to door. There is life, (and it’s a great life) outside the home counties.

  6. I’ve sometimes wondered whether it would be possible to buy an attractive house within an easy walk of Darlington station. Lots of trains to London and Edinburgh, plus local services, an easy drive on to the N York Moors, east of the Pennines so rainfall less than 30″.

    5 miles to the local airport and close to the A1(M).

  7. @dearieme

    Think Darlington property prices might be about to head north with this Treasury North lark, so get in quick!


    (In principle I’m not opposed to moving civil servants around to experience a bit more of the country they’re governing, but I do worry if Darlington will be as attractive a proposition to the more talented and option-rich ones as it might be to @dearieme! Some of the work done by the ONS has declined in quality since their move to South Wales, which I’m told – how reliably I’m not sure – is linked to the reluctance of some of the better statisticians to relocate there.)

  8. @ dearieme
    Depends upon your definition of an easy walk. Lots of attractive houses in the outskirts of Darlington and the surrounding villages. The station is, inevitably, surrounded by Victorian-era housing.

  9. Quite so, Obligato, there is a lot to say for living in and around the quadrilateral formed by Barnsley, Wakey, Ponti and Doni. There are certain villages I would avoid, typically those that never really recovered from the demise of the NCB, but there are some really nice villages and great countryside in the area. Good pubs and restaurants, and usually someone with a minibus in the village who will take a group to and from a restaurant for a reasonable price. Of the markets, I’d plump for Barnsley, during what were, before being imprisoned in Australia, our annual two week visits to the area to visit the in-laws, we’d usually call in to have lunch and buy fresh food.

  10. @ dearieme
    I reckon there must be a few within a mile of the station, quite a lot about two miles from it.

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