Tuesday 10 January 2017 9:43 am

No, Jeremy Corbyn - income disparity is not getting worse in the UK

Labour leader Jeremy Corbyn has proposed putting a cap on earnings in the UK, saying that the income disparity in the UK "is getting worse".

Speaking on the BBC Today programme, Corbyn said: "I can't put a figure on it and I don't want to at the moment.

Read more: Corbyn's only hope of power may be an SNP coalition, Labour group says

"The point I'm trying to make is that we have the worst levels of income disparity of most of the OECD countries in this country. It is getting worse. And corporation tax is part of it. If we want to live in a more egalitarian society, and fund our public services, we cannot go on creating worse levels of inequality."

He then said he wanted "a maximum earnings limit". 

But how valid is his claim that income disparity is getting worse in the UK?

The latest OECD data shows that, between 2007 and 2014, incomes for low-income workers (the bottom 10 per cent) have increased 10 per cent. The income of the average person in the UK has dropped 10 per cent, and the income of the highest earners (top 10 per cent) have fallen eight per cent.

During the same period in France and the U.S., incomes for those in the bottom 10 per cent of earners fell by 25 per cent and 21 per cent respectively. The story in Greece and Spain is far worse, as summarised in the table below.

Cumulative income growth in OECD countries (2007-14)

  Bottom 10% Mean Top 10%
Greece -67% -50% -45%
Spain -69% -30% -20%
Portugal -57% -19% -19%
Slovenia -35% -14% -10%
Italy -36% -14% -12%
Netherlands -17% -5% -3%
Denmark -32% -4% 7%
United Kingdom 10% -10% -8%
United States -21% -4% -2%
France -25% 0% 6%
Germany 5% 6% 9%
Finland -14% 1% 0%
Belgium -38% -1% 1%
Austria -17% 3% 2%
Slovak Republic -23% 8% 14%
Canada -20% 5% -1%
Ireland -50% -12% -2%

In addition, the World Bank's Gini index, a measure of wealth distribution, showed that income inequality in the UK fell between 2004 and 2012.

Corbyn's suggestion that national earnings should be capped came on the day that the Office for National Statistics (ONS) reported typical disposable incomes rose by £600 in 2016 to £26,300.

The ONS also said real incomes for the poorest fifth of households increased by £700 last year, with incomes in the richest households falling £1,000.