Will focusing on inequality really tackle poverty?

Tower Hamlets: ground zero for London's inequality problem. Image: Getty.

Each year the Centre for Cities’ Cities Outlook offers a health-check on the UK’s 63 largest city economies, and this year’s edition features a new benchmark: how levels of equality vary across different cities across the country.

One of the measures economists use to gauge inequality is the Gini coefficient. It determines equality on a scale from 0 to 1 – with 0 representing perfect equality, and 1 representing extreme inequality. New experimental data from the Office of National Statistics has allowed us to construct a Gini coefficient for every city in England and Wales.

Using this measure, Outlook reveals that BurnleyMansfield and Stoke are tied for the title of most equal city in the UK. At the other end of the scale, Cambridge is the UK’s least equal city, followed by Oxford and London.

The most striking finding from this is how the Gini coefficient relates to wider economic performance. Looking at the cities at the top and bottom of the spectrum, we can see that places which have the strongest economies are the most unequal, while those with some of the weakest economies tend to be most equal.

For example, if we look at unemployment (as measured by those claiming unemployment benefits) compared to the Gini coefficient, we can see that cities which have high levels of inequality have low unemployment, while in more equal places average unemployment is high.

This raises an important question which is highly relevant to the growing debate about inequality and “inclusive growth”: what is the most important issue that the UK should address to help the poorest and “least included” in society?

Alleviating poverty should, I would argue, be a top policy priority for national and local leaders, and there are many policy prescriptions that flow from this that we should be considering. But our findings suggest that the case for policy focusing on trying to reduce inequality is much less clear cut. Our most successful places are more unequal because they have such successful components of their economies.

Cities with weaker economies, on the other hand, are likely to be more equal precisely because they lack these components – so while levels of income are more even, they are also lower overall than in more economically vibrant places.

If the policy focus is on reducing inequality, it’s entirely possible to end up arguing that it is better for a city’s residents to be poorer but more equal, than to be more unequal but wealthier overall. But should that really be the ideal outcome of policy?

As the debate about inequality and inclusive growth develops, we need to ensure we are clearer about what tackling inequality really means and what a desirable end result looks like. Our data suggests that boosting economic growth is the most effective way to increase job opportunities and income – and to tackle poverty – in the UK’s poorer cities, rather than trying to sustain their position as one of the most equal cities.

In our most successful cities, where inequality is a bigger problem, dealing with the costs of growth, such as unaffordable housing which will hit the poor the hardest, should be the top priority.

You can explore the Gini coefficient and other city data on our data tool.

Paul Swinney is senior economist at the Centre for Cities, on whose blog this article was first published.

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22 reasons the hyperloop and driverless cars don't mean we don't need HS2

Yeah, this is not real. Image: Hyperloop Transportation Technology.

I’m on holiday. Bloody hell, lads I’m literally on holiday. As I write I am on a high-speed train hurtling south through France to the Mediterranean. The last thing I should be doing right now is reading the dumb-ass tweets sent by an essentially irrelevant Tory MEP, let alone obsessing about them, let alone writing about the bloody things.

But it turns out 6.5 hours is quite long as train journeys go, and the fact I can take this journey at all is making me feel quite well disposed towards high-speed rail in general, and for heaven’s sake just look at it.

That Tweet links to Hannan’s Telegraph column, of which this is an excerpt:

Hyperloop may or may not turn out to be viable. Driverless cars almost certainly will: some of them are already in commercial use in the United States. So why is the Government still firehosing money at the rather Seventies idea of high-speed trains?

The short answer is that firehosing money is what governments do.

Well, no, that’s not the only reason is it? I can think of some others. For example:

1. Trains are faster than cars, driverless or otherwise.

2. High speed trains are faster still. Hence the name.

3. The biggest problem with cars as a form of mass transportation isn’t either pollution or the fact you have to do the driving yourself and so can’t do anything else at the same time (problems though those are). The biggest problem is that they’re an inefficient use of limited space. Trains not only move people faster, they take up less room while they do it. So driverless cars, marvellous though they may be, will not render the train redundant.

4. The hyperloop is still unproven, as Hannan himself admits, so the phrase “become a reality” seems just a teensy bit of a fib.

5. Honestly, nobody has ever travelled a single inch by hyperloop.

6. At the moment, like Donald Trump’s Twitter feed, it’s basically one big fever dream backed by an eccentric billionaire.

7. Frankly, I am pretty stunned to see one of Britain’s leading Brexiteers buying into a piece of fantastical utopian nonsense that would require detailed and complex planning to become a reality, but which is actually nothing more than a sketch on the back of a napkin.

8. (That last point was me doing a satire.)

9. Even if it happens one day, a hyperloop pod will carry a tiny fraction of the number of people a train can. So once again Hannan is defeated by his arch nemesis, the laws of space and time.

10. In other words, Hannan’s tweet translates roughly as, “Why is the government spending billions on this transport technology that actually exists, rather than alternatives which don’t, yet, and which won’t solve remotely the same problem anyway?”

11. High speed trains definitely exist. I’m on one now.

12. I really shouldn’t be thinking about either the hyperloop OR Daniel Hannan if I’m honest.

13. I wonder why the French are so much better at high speed trains than the British, and whether their comparative lack of whiny MEPs is a factor?

14. It feels somehow typical that even in a genuinely contentious argument (“Is HS2 really a good use of public money?”) when he has a genuinely good point to make (“The way the cost of major projects spirals during the planning stage is a significant public concern”), he still manages to come up with an argument so fantastically dim that bored transport nerds can spend long train journeys ripping it to shreds.

15. He could have gone with “let’s cancel HS2 and use a fraction of the saving to sort out the northern railway network”, but no.

16. Somehow I suspect he’s not really bothered about transport, he just wants to fight strawman about debt.

17. Also, of course we’re using debt to fund the first new national railway in a hundred years: what else are we going to do?

18. “Unbelievable that at a time when I need new shoes we are borrowing money to buy a house.”

19. Can I go back to my book now?

20. I said I was going to stop this, didn’t I.

21. This is a cry for help.

22. Please, somebody, stage an intervention.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason.

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