The gap between the rich and the poor continues to increase in the UK…

Like many other countries, the United Kingdom has been facing serious financial difficulties, which the Conservative-Liberal Democrat coalition government that took office in May is having to deal with. Inevitably — such is politics — we have witnessed a blame game, with the government blaming the previous Labour administration for causing the mess, and the Labour Party, now in opposition, criticising many of the measures taken as being motivated by party point-scoring.

That is par for the course, but no rational person can doubt that the financial problems have to be addressed. We can argue about how this ought to be done, but there is no tenable argument that things can simply be left as they are.

No easy answers

The measures taken, or planned, by the government are not, of course, painless. Many jobs are likely to be lost. Concerns are being expressed that many people may lose their homes, or may have to move to areas where rents are cheaper. That kind of thing, of course, is by no means simple. It brings pain, and huge disruption to family life. Furthermore, even if people are able to move, they will probably have to travel much further to find work — adding considerable travel costs.

It is, in short, a gloomy situation. If the country is to tackle the financial problems and return to a more stable position, major problems of this kind are inevitable.

This underlines another problem, the consequences of which are difficult to predict. It can be stated starkly: UK society is more divided financially, more unequal, than it has been for decades. The incomes of poor people have been falling and those of rich people rising. Financial disparity of this kind inevitably brings with it social disparity. Britain has become a more socially divided society.

The Institute for Fiscal Studies, a leading respected thinktank, took the view that the increase in poverty in 2007-08 was due to weak income growth for those on low pay. Indeed, the figures suggest that those at the bottom of the heap have, in recent years, experienced in real terms a fall in their incomes. By contrast, those in the top 10 per cent of earners have enjoyed a growth in income greater than that of any other parts of the working population.

There has, of course, been a general awareness of this, an awareness which in recent months has led to strong criticism of senior bankers, who form a highly visible cohort of the well paid — and who are also seen, as a group, to be responsible for many of the country's economic ills.

I am no economist, but I am convinced of the seriousness of the situation, and of the need for tough measures. The increasing disparity between the rich and poor, however, in my view has the potential to produce far more serious consequences than have so far been officially recognised.

People are already commenting with some bitterness on the apparent detachment from ordinary people of many of our leading politicians — a detachment that can be attributed to the fact that they do not seem to have much awareness of the lives which “ordinary” people lead. For example, when politicians suggest that if people have to live further from their jobs in order to find cheaper housing they can travel to work by bus, it may well be a perfectly reasonable suggestion. When it is made by politicians who have no experience of travel by bus, and no need to acquire such experience, the reasonable suggestion can quickly become the basis of a social and political grievance.

Potential problem

Political leaders, I suggest, need to take this kind of thing seriously, and recognise that huge divisions of wealth constitute a potentially major political problem. Certainly, in my lifetime, the UK has often drawn strength from being able to face major problems with a sense of unity. (It was true during the Second World War and the years immediately following it. It was not true in the years immediately before that war, which was another period of social division.)

To put what I am saying in perspective, I do not for one moment think that we are on the verge of a revolution. To make such a claim would be farcically unrealistic.

What I do think is that if the disparities in income are allowed to continue at their present level, the measures needed to tackle the financial problems that the country faces are quite likely to lead to a whole raft of social problems.

Bill Kirkman is an Emeritus Fellow of Wolfson College Cambridge, UK. Email him at: bill.kirkman@gmail.com