Two-nation Britain

WHEN Iain Duncan Smith resigned on March 18th in protest at curbs to disability benefits, eyes in Westminster rolled. How odd for the man who has run the Department for Work and Pensions (fairly incompetently) for the past six years to turn on his own policies. How transparently his animus towards George Osborne, the chancellor of the exchequer, motivated his accusations. How conveniently these bolstered Mr Duncan Smith’s complaints, as a pro-Brexit campaigner, about an aloof and elitist Europhile establishment. “Disappointed” by the resignation and using sturdier language privately, a red-faced David Cameron went before his MPs in the House of Commons on March 21st to offer his retort and confirm that the disability cuts would not go ahead. He also reminded them of his government’s “one nation” achievements, including falling inequality, soaring employment and school reform.Mr Duncan Smith’s motives may be dubious and his complaint off-target (the proposed disability cuts were less egregious than some others). But he has stumbled on something that matters. The budget was regressive, cutting welfare as it reduced income tax for the top 15% of earners and capital-gains taxes mostly paid by the asset-rich (see ). Ministers say that a forthcoming increase in the minimum wage compensates for the cuts. In fact it most benefits middling households (since its recipients often support a higher-earning partner) and is part of a wider post-election tilt towards the better off. According to one estimate, changes announced since the Conservatives won a majority last year will leave the average annual income of the top 30% of households £280 ($400) higher and that of the bottom 30% £565 lower. Meanwhile the jobs engine is slowing, wage growth is faltering and the wealthiest are roaring ahead. The fall in inequality over the previous parliament will probably be wiped out over the course of this one.