Income Distribution (Hansard, 27 October 2003)

§ Ruth Kelly

The information requested falls within the responsibility of the National Statistician. I have asked him to reply.

Letter from Len Cook to Mr. Meacher, dated 27 October 2003:

Percentage shares of equivalised total gross income for ALL households¹^,², 1979 to 2001–023
	1979	1980	1981	1982	1983	1984	1985	1986
Gross income
Top 10 per cent	24	25	25	25	25	25	26	28
Top 20 per cent.	37	38	39	39	39	39	40	41
Bottom 20 per cent.	9	8	8	9	9	9	8	8
Bottom 10 per cent.	2	2	2	2	2	2	2	2

	1987	1988	1989	1990	1991	1992	1993	1994–5
Gross income
Top 10 per cent.	27	27	26	28	27	27	28	28
Top 20 per cent.	43	43	42	44	44	43	44	43
Bottom 20 per cent.	7	7	7	7	7	7	7	7
Bottom 10 per cent.	3	3	3	3	3	3	3	3

	1995–6	1996–7	1997–8	1998–9	1999–00	2000–01	2001–02
Gross income
Top 10 per cent.	27	28	28	29	28	28	30
Top 20 per cent.	43	44	44	44	44	44	45
Bottom 20 per cent.	7	7	7	7	7	6	6
Bottom 10 per cent.	3	3	3	3	3	3	3
¹ Estimates for top and bottom 10 per cent ranked by unadjusted gross income up to 1986
² Ranked by equivalised disposable income from 1987 onwards
³ From 1990 this includes company car benefit and beneficial house purchase loans from employers. From 1996–97 values are based on estimates for the sample grossed up to population totals.

40WS

As National Statistician, I have been asked to reply to your recent request for estimates of the percentage of national income accrued to the (a) top and (b) bottom (i) one per cent., (ii) five per cent., (iii) 10 per cent. and (iv) 20 per cent. of the income distribution in each year since 1979. (134101) Estimates for national income are not available but estimates for gross household income are shown in the following table. These are produced from the Office for National Statistics' analysis "The effects of taxes and benefits on household income" and the latest analysis for 2001–02 was published on 21st October 2003 on the National Statistics website. Results for earlier years are also published in Economic Trends, which can be can be obtained from the House of Commons library. The analyses for each year since 1997–98 can also be obtained from the National Statistics website at: http://www.statistics.gov.uk/CCI/SearchRes2. asp?IPS = 5&CT = 6&Term = taxes%20and%20benefits The analysis includes measures of income inequality for the United Kingdom as a whole based on data from the Expenditure and Food Survey (EPS), formerly the Family Expenditure Survey (FES). Results for each quintile (including the top and bottom 20 per cent) are published in table 26 of the analysis. The Family Resources Survey would have been an alternative source with a larger sample size, however it would only have provided a time series from 1994/5. The table shows the proportion of total gross income received by groups of households in different parts of the income distribution, where households are ranked by equivalised disposable income. Gross income includes income from earnings, occupational pensions and investments and cash benefits such as state retirement pensions and income support. It does not take account of deductions for taxes. For the data that you have requested, sample sizes are only sufficient to allow a breakdown to be given by deciles and quintiles of income distribution and not for the top or bottom one per cent. or 5 per cent. Equivalisation is a standard methodology that takes into account the size and composition of households and adjusts their incomes to recognise differing demands on resources.