An unexpected cut

In 1974, the Labour government established a Royal Commission on the Distribution of Income and Wealth, which was known as the Diamond Commission. This paper, firstly, looks at what this Commission found and compares that to the shape of inequality in Britain today; secondly, examines the impact of the Commission’s findings on policy and the public debate and, finally, uses the story of the Diamond Commission to reflect on what can be learnt by those trying to secure a more equal Britain today. The Diamond Commission highlights how we must not think of the politics of equality as solely about taxation and the welfare state. The spread of pensions and broadening of home ownership were crucial to a more equal distribution of wealth in the post-war period. On the income side the power and influence of trade unions kept income inequality down. Much has changed in the make-up of income and wealth inequality since the mid-1970s. We are a much less equal society when it comes to incomes. But more positively pensioners are now far less likely to be poor. The place of self-employed in our economy has shifted with those involved, on average, no longer better off than employees. Inheritance is also becoming a much bigger feature of the country than it was forty years ago, with implications for growing wealth gaps.

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