They reveal a marked difference between London and the South-east and the other regions. In London only a quarter (24 per cent) of taxpayers earned less than £10,000 a year compared with a third in the North-east, North-west and Northern Ireland. The Government has questioned the existence of a North-South divide. But although there are pockets of high incomes in the Midlands and the North, and major concentrations of poverty in London and the South-east, the Inland Revenue data by regions show that the differences are very sharp.The middle and bottom graphs show, respectively, the regional distributions of the proportion of the number of people and the proportion of total incomes (amount) by income band. Conversely, the share of the bottom 50 per cent fell from 15 per cent to 11 per cent.
The rich are paying a bigger slice of income taxes than 10 years ago.Not surprisingly, given the nature of the regional economy, the concentration of high earners and earnings in London and the South-east of England, the geographical distribution of earned income is also unequal. By 2000-01, these proportions had risen to 22 per cent and 41 per cent respectively. In 1990 the top 1 per cent of earners paid 15 per cent of income taxes and the top 5 per cent paid 32 per cent. Incomes of the top earners have increased faster than ever aided by the development of what Robert Frank and Philip Cook in their 1995 book termed the "winner-take-all society", whereby earnings for top performers, whether footballers, chief executives or investment bankers, have risen dramatically, allegedly to reflect their global scarcity value.Interestingly, given the recent (and speedily quashed) suggestion that Labour should consider reintroducing a 50 per cent top rate of income tax, the share of total income taxes paid by high earners has increased significantly. Income inequalities began to increase in the late 1970s and New Labour has not been successful in reducing them. The total income of the top 1 per cent exceeds the bottom 30 per cent The average earnings for each band explain why.
Average incomes for the top 1 per cent were £201,000 compared with just £4,500 at the bottom.Britain has become one of the more unequal Western countries over the course of the last 20 years, though it is still well behind the US. At the bottom end, the 18 per cent of individuals on less than £8,000 a year take under 6 per cent of total earned income. The top 4 per cent of individuals earning more than £50,000 take almost 22 per cent of total earnings, and the top 1 per cent takes 11 per cent. Ten per cent of people earn between £30,000 and £50,000 a year, 3 per cent earn between £50,000 and £100,000 a year and just under 1 per cent earn more than £100,000 a year. This may seem small, but it's still a lot of people: just more than 300,000 people, with another 960,000 earning between £50,000 and £100,000.
