TOUCHSTONE EXTRAS - Fairness and prosperity

This Touchstone pamphlet asks whether a more equal distribution of income would jeopardise the UK's economic prospects. Indeed, is more equality just what we need to improve our prosperity and well-being?

The assertion that less inequality is 'part of the good society' resonates strongly with most people on the left and centre-left. This pamphlet shows that this is a sensible belief:

The UK is a very unequal country, and this inequality is the result of a major shift in income distribution in the 1980s and 90s.

There is a conventional economic view that asserts that inequality is a price a country has to pay to achieve economic success. But a comparison of the performance of equal and unequal countries does not back this up.

Indeed, there is evidence that some redistribution enhances economic performance. International comparisons provide very strong evidence that inequality is linked to poor health and social outcomes.

The theories to explain this relationship are still being developed. This pamphlet outlines two of these - that inequality has harmful psychological effects and that poor outcomes follow on from deprivation, which is more common in unequal societies.

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Report (300 words) issued 18 Jul 2011