Introduction

This chapter looks at trends in social inequality in Britain and how the operation of the housing system and housing policy has contributed to this. It is divided into three parts. In the first, it looks at the development of housing policy in Britain from the mid-1970s on. It argues that the late 1970s and early 1980s were a turning point which committed British policy to a path of ‘bifurcation’, leading to an increase in inequality, and an entrenched process of tenure polarisation. To some extent, the trends observed in Britain – the expansion of homeownership, the residualisation of the social rented sector and the switch from supply-side (‘bricks and mortar’) subsidies to demand-side (means-tested) support – are in common with trends observed in other European countries. However, there are important aspects that are very specific to Britain, such as a rejection of social corporatism, a stress on economic individualism and a weak role for private renting. This chapter argues that there is no single reason for the particular path taken by housing policy in Britain. Rather, there is a variety of contributing factors: social and economic changes interrelate with policy innovations and development.

The second part of this chapter looks more generally at the growth of social and economic inequality over the same period. In Britain, income inequality grew rapidly between 1977 and 1990, when it reached its highest postwar level. During this period, inequality increased faster in Britain than anywhere else in the world (with the exception of New Zealand). This increase was driven by three factors: growing inequality of earnings; an increase in the number of people dependent on benefits; and a widening gap between those with earnings and those on benefits. One important change has been an increase in the numbers both of ‘no-earner’ and ‘multiple-earner’ households. Nearly one in five British households with children has no working adult, significantly higher than all other European countries. As a result of the increase in inequality, poverty and social exclusion have also increased in Britain over the last 25 years.

The third part of this chapter looks at the current policies tackling inequality and social exclusion, including the contribution of housing and regeneration policies. In its first three and a half years in office, New Labour has followed policies of ‘redistribution by stealth’.