Widening Income Gap in UK

Gazelle SG

Huge bonuses spark divided nation fears

Aug 28 2007

Record City bonuses will have been cheered by sellers of luxury items but met with concern by those warning of an ever increasing wealth divide.

Analysis of official data today found that performance-related windfall pay-outs in the Square Mile have increased by almost a third, to £14 billion.

The hike is likely to intensify fears that the UK is becoming an increasingly divided nation, with the uber-rich pulling further away from the hoi-polloi. And they are pulling away in style, with spending on luxury cars and yachts seemingly benefiting from the good fortune of city workers.

Reports suggest that sales in Bentleys have increased by almost a fifth over the last year, while the waiting time for a new Rolls-Royce has risen.

Likewise yacht sales have been boosted from an increase in disposable income in the square mile.

Delphine Kittlety, marketing co-ordinator at luxury yacht distributor Princess Motor Yacht Sales, said: "It is a booming industry. We are seeing a lot of people from the city willing to spend money on a yacht."

But it is housing market where the effect of bonuses is arguably most noticeable. Top-end apartments and houses in Londons wealthiest areas are being snapped up by the super-rich.

Estate agents Knight Frank said luxury property in areas such as Kensington, Chelsea and Westminster is increasing in value by 36% year-on-year.

But with an influx of super-rich emigres into the capital and a dearth of suitable properties on the market, those wanting to exchange their bonus for bricks and mortar need to be quick off the mark.

Melanie Bien, director of Savills Private Finance, said: "At the prime end of the market there is a real issue with supply and demand."

Paul Willans, chief executive at Mazars Financial Planning - advisers to high net-worth individuals - said he had noticed an increase in people coming to the firm with large bonuses.

He said city highflyers are entitled to blow part of their bonus but should not neglect looking after their future financial wellbeing at the same time.

Mr Willans added: "They should treat themselves, but it is also an appropriate time to make sure you are planning your finances."

As to what city highflyers spend their money on, he said: "Aston Martins seem to be very popular at the moment, and it costs at least £103,000 to buy a decent one. Luxury yachts are also being bought and I wouldnt be surprised if the upmarket boutiques in Bond Street are doing very well."

The size of city bonuses has led to criticism that not enough is being redirected to good causes.

Earlier this year, Peter Hain, the then Northern Ireland secretary, said multi-million-pound bonuses created a "grotesque" wealth gap that fuelled envy and crime.

He suggested that city-types should give up two-thirds of their bonus to deprived communities.

Following in the footsteps of the great philanthropist Andrew Carnegie, who famously wrote that "the man who dies rich, dies in disgrace", some high-flying businessmen are taking a lead in distributing their vast wealth.

British retail entrepreneur Sir Tom Hunter recently pledged to give away £1 billion before he died.

Likewise, hedge fund manager Christopher Horn donated £50.4 million of his fortune to good causes.

It has been suggested that high bonuses are indeed being reflected in higher levels of giving.

A total of £10.9 billion was donated to the top 500 charities in 2006 - up nearly £1 billion on the year before, according to the Charities Aid Foundation.

But others are less convinced about the positive impact of high bonus levels. Causing concern is the fact that a "trickle down" effect is seemingly doing little to alleviate the plight of the poor.

Analysis of Government statistics by the Institute of Fiscal Studies (IFS) revealed that the wealth gap is increasing.

In 2005/06, incomes for the the poorest fifth of the UK fell by 0.4%, while income for the richest fifth rose by 1.5%, the IFS said.

Dr Michael Orton, senior research fellow at the University of Warwick and author of a recent Joseph Rowntree Foundation report on wealth inequality, said: "There is widespread public concern about the level of inequality in the UK and level of City bonuses.

"We are becoming an egg timer society. There is a big bulge at the top, a big bulge at the bottom and the middle is getting squeezed."

"There is no real empirical evidence that the trickle down works. But there is research that shows that an unequal society creates problems in the housing market, education - people can buy into areas with better schools, and happiness."

reddressman SG

Singapore also widening income gap.

Will singpaore head in this direction slowly but eventually?

Gazelle SG

purpose of this thread it highlight (especially to those white di.ck suckers) that widening income gap is a global problem and not a local one. hence please stop accusing the government of setting policy that take money from the poor to benefit the rich.

Arapahoe SG

widening of income disparity is a global issue and not to point at single nation.

hloc SG

Dog eat dog World..... what to do Sad

reddressman SG

Is singapore heading in that direction too. That was my question. You need to google / wiki / dictionary the meaning of 'question' and 'answer' in order to differentiate the 2 words.

From your reply, you have admitted that Singapore is heading in the same fate direction as UK. I din say that. You did. And you used a convenient reason called 'GLOBALIZATION'.

All blame it on Globalization. So convenient. you so smart you. Well done, bright future. Say Yes, always.

Gazelle SG

nah. globalization is only one aspect of the problem, technology advancement which to make human and manufacturing processes more efficent is another

http://www.sgforums.com/?action=thread_display&thread_id=250502&page=0

qlqq9 SG

Hi, people, we should focus and be concern of the widening of income gap in Singapore, UK is irrelevant unless you are residing there. The gahmen in Singapore is concern about the widening of income gap here, so we should focus just on Singapore.

fox_hound_33 SG

Emm......are you implying that once a "problem" becomes global it is no longer a "problem"?? If that logic gets applied to everything, i guess all of the world's countries would be "problem free".

I do agree that widening income gap is not just restricted to Singapore, but happening all over the world. But that does not mean we can't debate over the issue or try to find out the reasons behind it or even find ways to mitigate it.

qlqq9 SG

There is no need to divert people’s attention to focus on UK, we are in Singapore. The gahmen of singapore is getting the highest pay in the world, so much more are demanded of them to deal with the widening of income gap, whereas UK government are not the highest paid govt in the world. They the highest paid gahmen have better come out with excellent, practical solution, with focus on serving the nation on their mind and not to do it for their selfish interest and desire.

oxford mushroom SG

Nobody is stopping you from saying anything. A global problem indicates that that nobody has a perfect solution. The reasons for a widening income gap is clear: technological advances which render old services/skills obsolete and free movement of funds and labour in a global market which depresses salaries in developed nations. Incidentally, whilst salaries of low-skilled workers in developed nations are depressed, salaries of cheap workers from developing nations are raised as a result.

The problem with a widening income gap is that it highlights the failure of low-skilled workers in places like Singapore to move out of low-skilled industries and/or improve productivity.

Gazelle SG

It is a problem and a problem which Singapore government is aware off and they are doing someting to help those being left behind. However would appreciate if you could read the other thread about income distribution and let us know if you agree with how the whiners like to put all the blame to government.

I wont be surprise that one day, they will start to blame the government for their constipation

maurizio13 SG

I suggest you switch the position of your mouth with your anal orifice, since so much crap is coming out from your mouth. Might as well, with an arsehole for a mouth, nobody would notice the difference in you. Trying to discredit another democracy without fundamental knowledge of facts.

If UK's widening income gap is a problem, Singapore's widening income gap is a bigger problem.

From your description of UK, I shudder at the thought of Singapore's problems.

Also, look through the Gini Coefficient for all the countries, notice what type of countries have high Gini Coefficient, mostly third world countries, while places like Sweden have 25.0, Denmark 24.7 and Finland 26.9.

Singapore's Gini Coefficient is 42.5, while UK's Gini Coefficient is 36.0.

The Gini coefficient is a measure of inequality of income distribution or inequality of wealth distribution. It is defined as a ratio with values between 0 and 1: the numerator is the area between the Lorenz curve of the distribution and the uniform distribution line; the denominator is the area under the uniform distribution line. Thus, a low Gini coefficient indicates more equal income or wealth distribution, while a high Gini coefficient indicates more unequal distribution. 0 corresponds to perfect equality (e.g. everyone has the same income) and 1 corresponds to perfect inequality (e.g. one person has all the income, while everyone else has zero income). The Gini coefficient requires that no one have a negative net income or wealth.

The Gini coefficient was developed by the Italian statistician Corrado Gini and published in his 1912 paper "Variabilità e mutabilità" ("Variability and Mutability").

The Gini coefficient is also commonly used for the measurement of the discriminatory power of rating systems in credit risk management.

The Gini index is the Gini coefficient expressed as a percentage, and is equal to the Gini coefficient multiplied by 100. (The Gini coefficient is equal to half of the relative mean difference.)

Gazelle SG

Originally posted by maurizio13:

Rock^Star SG

Yes, one would shudder at the thought of Singapore's problems if UK were as bad as Gazelle has made it out to be.

Obviously, in his eagerness to post, he has forgotten to check if UK's gini coefficient is less than S'pore. Well, so now we can see that their gini is not only better than us but also a lot more.

Is this thread still worth further discussion? I hardly think so.

Gazelle SG

Singapore's fish head curry taste better than british fish and chip, and we have got more sunshine here in Singapore.

Rock^Star SG

Sadly, food and loved ones are the only things I miss here. From an overseas Singaporean's perspective.

I cannot possibly (many others too) be retiring in this country if they force feed their policies on us this way.

Let's wait and see if the annuity turns out as truly beneficial.

oxford mushroom SG

The UK is turning into a nation of debtors, riding on the bullish stock market and low interest rates. The property prices have skyrocketed and the western culture of leaving the home early, living apart from parents and the high divorce rates all place an increasing demand for properties.

Many young people in UK cannot even dream of owning a home. If Singaporeans think the UK is better, let them come over and see for themselves. London is wonderful for those of us who have made it in the finance sector and are paid handsome sums each year at Christmas. For many others, they cannot even get on the first rung of the property ladder.

reddressman SG

Is singapore heading the same way?

Its too early right? singapore just turned 1st world. A Baby by UK's 1st world age. you never know right?

So, are you saying we're heading UK, USA way?

Yes / No.

oOprinceOo SG

yes. big yes.