inequality‘Cause when you’re laid in bed at night 
Watching roaches climb the wall’ 

The rich get richer and the poor get poorer. 

  • Income inequality in the UK, as measured by the Gini coefficient (1) , increased by 1.3 percentage points to 35.7% when comparing financial year ending 2021- 2022. 
  •  This was driven by a 3.4% reduction in mean disposable income in the fifth poorest households, attributed to reduced original income and cash benefits.  
  • There was an increase in mean disposable income of the fifth richest households of 3.3%, driven by increased original income. 

Source: Office for National Statistics (‘ONS’) 
The UK has the 9th most unequal incomes of 38 OECD countries (OECD, 2022) but is about average in terms of wealth inequality (Global Wealth Databook 2022). (2)  

A survey this week from Warm Welcome campaign, a UK-wide network of over 4,200 warm spaces, found that  C. 550,000 people visited community ‘warm rooms’ to escape freezing homes and escalating poverty during the winter. 

Warm Welcome may have underestimated, another survey that suggests the figure may be as high as 2.5 million. Its network represents only a fraction of the UK’s warm rooms: a Labour party survey in December indicated there were about 13,000. 

From warmth to eating; the Trussell Trust distributed a record numbers of food parcels in the past year, as the cost of living crisis caused >750,000 people to use food banks for the first time. 

Their network distributed nearly 3m food parcels in 2022-23, its highest ever total, a year-on-year increase of 37%. More than a million children were living in households receiving the trust’s food parcels. 

’caused >750,000 people to use food banks for the first time’

One in five people using a Trussell food bank over the period were in work, reflecting the difficulties many low-income households have in affording everyday essentials amid soaring energy bills and food prices. 

Trussell’s chief executive, Emma Revie, said the demand for food parcels last year was higher than it had been during the first year of the Covid pandemic, ‘which we had all assumed was a once-in-a-lifetime level of need’. 

The number of Trussell Trust food parcels distributed had grown by 120% over the past five years, Revie said. In 2017-18 it gave out 1.4m parcels, at the time a record. The figure increased in four of the following five years before hitting its current peak. 

The scale of demand has forced the trust to ‘think through the logistics’ of charity food distribution. Levels of food donations – traditionally from individuals and local charity food drives – have failed to keep pace, and Trussell had to spend £7.5m last year – £4.5m more than in the previous year – replenishing food bank stocks. 

Food bank use soared across all regions of the UK,  the biggest annual increase in food parcel distribution was 54% in the NE. No region or nation of the UK saw less than a 28% rise in food parcel numbers given out. 

The trust does not cover C.25% of UK local authority areas, and thousands of food banks and food aid charities exist outside its network. Food banks as a whole do not capture the full extent of hunger, with government figures suggesting just 14% of people in severe food insecurity visit food banks. 

‘one-off cost-of-living payments to help low-income households made no lasting difference’

The governments one-off cost-of-living payments to help low-income households made no lasting difference. Food bank use fell slightly in the weeks following these payments in August and December, then quickly rose once more. 

Earlier this year research by the Trussell Trust and the Joseph Rowntree Foundation estimated core benefit levels were at least £140 a month less than basic living costs. 

The Resolution Foundation, an independent think tank, forecasted in January 2023 that absolute low income (poverty) will increase from 17.2% in 2021/22 to 18.3% in 2023/24. This means an additional 800,000 people in absolute low income.(3) 

Note – Absolute low income: This refers to people living in households with income below 60% of median income in a base year, usually 2010/11. This measurement is adjusted for inflation 

What does the government think? Perhaps the Tory’s attitude can be summarised by these comments from Lee Anderson, the party’s deputy-chair: 

  • generation after generation’ of people ‘cannot budget’ or make meals properly.’ 


  • ‘Anybody earning 30-odd grand a year – which most nurses are – using food banks, then they’ve got something wrong with their own finances,’ 

Anderson is famed for his inflammatory remarks, most of which are either ill-conceived, or ill-intentioned. 

By comparison you would have expected someone such as the Bank of England’s chief economist, Huw Pill, to be a little more circumspect. Unfortunately he isn’t. 

Speaking on a podcast produced by Columbia law school, Pill said it’s natural for a household to seek higher wages in response to soaring energy bills, or for a restaurant to increase its prices. Here comes the but….. 

If the cost of what you’re buying has gone up compared to what you’re selling, you’re going to be worse off. 

‘So somehow in the UK, someone needs to accept that they’re worse off and stop trying to maintain their real spending power by bidding up prices, whether higher wages or passing the energy costs through on to customers. 

‘And what we’re facing now is that reluctance to accept that, yes, we’re all worse off, and we all have to take our share.’ 

‘And what we’re facing now is that reluctance to accept that, yes, we’re all worse off, and we all have to take our share.’ 

The BoE is looking increasingly inept; the IMF’s chief economist, Pierre-Olivier Gourinchas, said: ‘Should we worry about the risk of an uncontrolled wage-price spiral? At this point, I remain unconvinced. Nominal wage inflation continues to lag far behind price inflation, implying a steep and unprecedented decline in real wages.’ 

The facts bear this out: headline inflation is 10.1%, whilst wages are rising by only 5.9%. 

As I wrote in ‘How Low Can we Get?‘, profiteering is the main cause. Globally, companies producing essentials have benefitted exponentially from soaring prices. Research by the union Unite has shown that the profits of the four largest agribusinesses globally, less well-known names like Cargill and ADM, rose 255% from 2019 to 2021. 

This has fed down the supply chain into domestic profiteering. The big three UK supermarkets – Asda, Tesco, and Sainsbury – doubled their profits over the same time period. The eight largest UK food manufacturers saw their profits rise 21%.(4) 

The BoE is gaining a growing reputation for thoughtless comments; last year governor Andrew Bailey, was widely criticised after saying workers should not ask for big pay rises, to try to stop prices rising out of control. 

‘The big three UK supermarkets – Asda, Tesco, and Sainsbury – doubled their profits over the same time period’

Bailey was paid £495,000 in the year to 28 February 2022, while Pill was paid £88,000 for his first five months and 24 days, according to the central bank’s annual report, taking his annual salary to £180,000. According to the latest official data, median average household disposable income last year was £32,300. 

Pill’s comments came on a day in which Nestlé, PepsiCo and McDonald’s have all reported that higher prices boosted their sales this year, and as UK families face 17.3% grocery inflation in supermarkets. 

To combat inflation the BoE has increased borrowing costs at the steepest rate in history. The success of this I leave readers to decide. But, as a guide, the headline rate of inflation in the UK in March was  10.1%, a fall of a spectacular 0.3% from 10.4% in February. 

All their increases have achieved is to create more problems for households as mortgage costs have increased exponentially.  

Purchasing the average detached UK property on the same terms in December 2022 would have resulted in a monthly mortgage repayment of £2,041 (up by 60.7% on December 2021). For terraced houses, it would have been £1,063 (up by 59.6%). For flats and maisonettes, it would have been £1,028 (up by 54.6%). 

Source: ONS 

This has made the situation even more desperate for first-time buyers, according to the housebuilder Persimmon, as higher interest rates make mortgages less affordable. 

‘All their increases have achieved is to create more problems for households as mortgage costs have increased exponentially’

The company, which is one of the UK’s largest domestic property developers, said people looking to get on the housing ladder were facing ‘stretched affordability‘ and less choice on home loans. 

Rising mortgage rates have led to higher loan-to-value ratios for first-time buyers, ‘particularly in regions with higher house prices‘, Persimmon said in a statement to the stock market on Wednesday. 

As first-time buyers are considered vital for the health of the housing market – they are often the start of chains between other buyers and sellers – this doesn’t bode well for house prices in general. 

Still, given the debts that graduates have when they leave university, it’s unlikely any will be houseowners anytime soon. 

But, for ever loser there is a winner, in this case the government who have more than doubled the amount of money it makes from charging interest on student loans. Official figures show graduates face borrowing costs of almost twice the rate set by the Bank of England. 

‘graduates face borrowing costs of almost twice the rate set by the Bank of England’

According to the latest snapshot of the public finances from the ONS, accrued interest on student loans swelled to £4.8bn in the 12 months to March. Up from £2.3bn in the previous year, the highest annual total on record. 

The surge comes despite ministers intervening last year to cap the interest rate on student loans in England and Wales in response to inflation hitting the highest levels for 40 years, preventing an even larger rise in borrowing costs. 

The forecast average debt among the cohort of students who started their course in 2021-22 is £45,800 when they complete their course. 

‘growth is flat, and will lead to a longer and deeper recession’

Each interest rate increase makes the situation worse, continually sucking demand out of the economy, which is why growth is flat, and will lead to a longer and deeper recession. The only outcome of which will be to increase income inequality. But, if like the chaps at the BoE, you’re earning 15 and  5.5 times the average annual salary that’s hardly your problem! 

Continuing with the winners, the owner of the Drax power plant will give its shareholders a £150m windfall after reporting its highest ever annual profits of £731m for 2022, up from £398m the year before, after the cost of electricity soared in the wake of Russia’s invasion of Ukraine. 

To be clear, Drax did nothing new, clever or original, they are simply benefitting from Putin’s aggression. This sounds like ill-gotten gains!  

Of course, we can’t let this end without mention of the Royals, who are still doing terribly well. So much so, that they don’t want us to know.  

The Guardian has revealed that Prince Andrew, the last Queen, Prince Philip, the then Prince Charles, and Princess Margaret held their investments through a government-backed shell company that was created to conceal them from public scrutiny. 

The shell company, Bank of England Nominees, which was set up in the 1970s to prevent the ’embarrassing’ public disclosure of Queen Elizabeth II’s investments. 

The monarch successfully lobbied the government to alter a draft law in order to permit the Windsors to hide the size and value of their shareholdings from the public. The shell company operated for more than 30 years. 

‘Most don’t have enough, the minority just can’t get enough’

Andrew’s use of the shell company is significant because he was a government ‘special trade envoy’ at the same time. Through this role he would have had access to commercially sensitive information. 

He stepped down in 2011 after a series of revelations about his close links with unsavoury businessmen, including the American billionaire Jeffrey Epstein, and foreign dictators. 

His suitability for the post was questioned after it was disclosed that he had taken a holiday with a Libyan gun smuggler, criticised a Serious Fraud Office investigation into corruption involving the arms giant BAE, and lunched at Buckingham Palace with a leading member of the deposed Tunisian dictatorship. 

Rose Whiffen, senior researcher for anti-corruption campaign group Transparency International, said of the Guardian’s revelation that Andrew used the shell company to mask his investments: ‘Trade envoys are privy to insider knowledge, which is why transparency is key to reveal potential conflicts of interest so that they may be properly addressed.’ 

Whilst there is no suggestion of impropriety it certainly calls into question peoples judgement.  

At a time when so many people are struggling there is mountains of evidence that shows we aren’t all in this together.  

Most don’t have enough, the minority just can’t get enough.  

‘And I just can’t get enough 
I just can’t get enough’ 



Inequality has been a long-running theme in Philip’s column, but I don’t recall things ever feeling quite so dire; maybe when the cumulative beating of the black swans’ wings drive down everybody’s wealth, the circumstances of those at the bottom becomes more stark because it poses an existential threat to them.

A commentator observed recently that those attracted to the magnetic glow of BoJo’s joie de vivre regularly ended up making humiliating speeches of reignation and shuffled off with their reputations irrevocably tarnished; he questioned if Boris was in possession of the Merdeas Touch.

So, after the Liz and Crazy show, thank heavens for Rishi’s safe pair of hands.

Or maybe not; just a week after Dim Dom Raab flounced off like a grumpy toddler, Richard Sharp surprised nobody by standing down as Chair of the BBC. As Sunak’s ex boss at Goldman Sachs, Sharp bridges the gap between the ex- and current PM in a way that sets neither in a positive light. To lose your deputy and the head of the Ministry of Truth in one week could be considered more than a little careless.

If the mythical little green men did make it down, they may consider the unlovely Raab and Patel, watch 30p Lee abusing Sir Mark Rowley and witness Suella Braverman goose-stepping around, biting the heads off bats in anticipation of a first ‘kill’, and question the wisdom of allowing bombasts and psycopaths to run the show. Just saying.

It’s been quite interesting to compare and contrast the behaviour of a PM anxious to put a positive spin on things, and the complete bankers in Threadneedle Street, disinterested in trying to sweeten the Pill.

It’s been all good news from Sunak – 20,000 bobbies and bobbis, more money for the NHS than ever before, cost of living payments, blah de blah. Crisis, what crisis?

Aviation is one sector that has virtually no chance of decarbonising. Probably ever. So, is Rishi going to tell people that they need to cut back on their ‘olidees or, heaven forbid, pay luxury tax on a luxury pursuit?

Not on your nelly – his gaslit, greenwashing ‘Jet Zero’ plan based on sham offsetting, fantasy fuels and carbon capture is so ludicrous that it is being challenged in the High Court by Possible.

But there’s no way Rishi is going to willingly get between Engerland’s finest and a sun lounger.

Compare and contrast that with the message from the BoE Chief Economist, unconcerned by popular opinion, which can be summarised as – ‘so, you’re all poorer; get over it’. 

So what was Philip thinking?

Whilst we are seemingly immune to the stupidity and incompetence of government, there is, or perhaps was, a hope that central bankers might be better. Alas, no.

This week’s comments from Bank of England’s chief economist, Huw Pill, is one of those watershed moments. One when you realise that not only does he not get it, he doesn’t really care.

Not only is the policy of continually raising interest rates be shown up as a blunt instrument that is achieving next to nothing, he ignores the data that shows there is no wage/inflation spiral. The IMF, the ECB can see it, but old blind Pill apparently can’t.

The fact there is very clear profiteering at all levels of the food supply chain is being conveniently ignored. It begs the question, what is the point of government? Government is there at the behest of the people, elected to benefit the people.

The UK is a standout example of governmental failure. Their every action seems only to benefit the few, rentiers with assets who need the least help. They are the main beneficiary of rising interest rates, at the expense of those trying to buy a home, or still paying for it.

Any rentiers who are buy-to-let owners with rising mortgage costs, hard luck!

To my mind the Royal’s sum-up everything that is wrong. They have, and continue to benefit, in ways we don’t even know about. The fact they hide behind so much secrecy illustrates how they fear peoples reaction to the truth of just how much they have.

Perhaps, Envoyez-les à la banque alimentaire is the 21st century’s version of Qu’ils mangent de la brioche.

We are a third-world country. Poverty is rife, food banks proliferate, and people seek warmth where they can find. If people are taking to small boats to come here, I shudder to think what the situation in their countries is like.

Lyrically we start with Pulp’s “Common People, and end with early Depeche Mode and “Just Can’t Get Enough”. Enjoy!


Philip Gilbert 2Philip Gilbert is a city-based corporate financier, and former investment banker.

Philip is a great believer in meritocracy, and in the belief that if you want something enough you can make it happen. These beliefs were formed in his formative years, of the late 1970s and 80s

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