Labour shortage

11 January 2017 By Peter Thal Larsen Follow @Peter_TL

Labour Party leader Jeremy Corbyn’s clumsy plans to rein in executive pay overlook an inconvenient fact: UK income inequality has fallen. Since the crisis retirees have done better than workers, though. Tackling the tensions caused by this divide makes a better political target.

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Median household disposable income in the United Kingdom rose by 600 pounds to 26,300 pounds in the financial year to March 2016, figures from the Office for National Statistics showed on Jan. 10.

Disposable income for the poorest fifth of households rose by 700 pounds, or 5.1 percent, compared with the previous year. Meanwhile the income of the richest fifth fell by 1.9 percent, or 1,000 pounds.

The Gini coefficient, a measure of inequality where a lower number shows a more even distribution of income, fell to 31.6 in 2016 from 32.6 in the previous year, based on disposable income.

The ONS data showed that the median income of retired households has risen by 13 percent since the financial year ending 2008. The median income of non-retired households has fallen by 1.2 percent over the same period.

Jeremy Corbyn, leader of Britain's opposition Labour Party, on Jan. 10 set out a range of measures to rein in high executive pay as he vowed to tackle inequality.

Corbyn suggested that companies which capped pay disparities between junior workers and senior executives could pay lower rates of corporate tax, or receive a government-approved kitemark. He also floated the idea that companies which receive government contracts limit the pay of top executives to 20 times the minimum living wage of 16,000 pounds a year.

"What we cannot accept is a society in which a few earn, in two and a bit days, what a nurse, a shop worker, a teacher do in a year," he said.

However, he backed away from suggestions earlier in the day that Labour would advocate a cap on maximum wages.

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