This is an important book. It is the culmination of a five-year research project at the Institute for Fiscal Studies, which provides a detailed analysis of various forms of inequality in the UK, their interaction and ways to address them. Everyone should read it, probably more than once given its rich seams of analysis.

Inequality in popular debate typically focuses on the incomes of the very rich. Perhaps contrary to conventional wisdom, recent history in fact suggests little recent change in income distribution on this measure. The income shares of the top 1% and 0.1% (two-thirds of whom live in London, and 90% are male) have been stable for two decades. Johnson attributes this stability to the poorer cohorts’ relative earnings holding up after 2008 (again perhaps contrary to conventional wisdom) and higher taxes on the rich, offset by a significant reduction in welfare spending.

So is there really nothing to see here? This would seem to challenge the view that the level of inequality in the UK has material social and economic costs, A broader view challenges such complacency, however. The 1980-2010 period had seen the income share of the top 1% rise back very close to its level before the first world war. By its own historic standards, the UK is a very unequal society as measured by incomes, recent stability notwithstanding.

Why does this matter? Johnson argues that there are multiple costs. High inequality fuels resentment and distrust, hindering effective collective decision-taking. It creates extreme disparities in terms of enhanced opportunities for political influence for the wealthy, with low-income adults increasingly less likely to vote at all. It can also constrain economic efficiency. Modern technology brings benefits but also facilitates abuse market power by some firms.

Furthermore, a pernicious interaction between inequality and weak economic growth has become more relevant. As earnings have stagnated, UK family wealth, driven to a significant extent by rising house prices, has become more important in determining lifetime outcomes. Johnson points to the rising importance of wealth in assessing inequality. In aggregate, wealth relative to incomes has risen to five times national income, compared to three times in 1970. It is also much less equally distributed compared to incomes: the top 1% account for 10% of national income and 23% of wealth. The very rich are different on a further dimension, with 40% of their income derived from business ownership and investments.

Inheritance and gifts from parents have, in Johnson’s view, created ‘dynasties of privilege’ which cascade through the generations. Three-year olds of the rich are three times as likely to be in the top 20% by cognitive development compared to those with less financially robust parents, merely the start of an entrenched process which materially limits social mobility. Security of employment and progression in work are other important aspects of inequality not captured fully by current incomes. Wider wealth inequalities also show up in health and life expectancy, with ‘depths of despair’ rising by 25% between 2019 and 2023, concentrated amongst those living in the poorest areas. Evident regional inequalities are a further manifestation of the unequal balance in incomes.

Johnson is not seeking to eliminate all inequalities; rather he seeks to integrate them more systematically into policy considerations, in three main ways. First, equality of opportunity does not ‘fix’ the inequality issue, as outcomes still matter and need to be addressed. For example, wider access to education in isolation does not solve inequalities of opportunity. Second, allowing inequality to rise and then dealing with the consequences through the tax and benefit system does not work, not least because well-being comes from earning a living, not handouts. Concerns about inequality need to be woven into the fabric of policy-making, not addressed downstream after the event, even if such concerns are not always the final arbiter on decisions. Third, growth matters: slow growth has exacerbated inequalities and made them harder to bear.

This is not a book for those looking for simple political solutions. Indeed, much of his factual analysis cuts across political trenches. Johnson argues against ‘broken Britain’ and the desirability of turning the clock back. Recent decades have seen substantial social and economic advances made by women and ethnic minorities, reflecting educational advances, equal pay laws and changing social attitudes. There is, nevertheless, still work to be done, given the stability of the male-female wage gap since 2008. Moreover, once housing and childcare costs are considered, disposable income of those over pension age are equivalent to the average disposable income of the rest of the population. Pensioners are now less likely to be in poverty than younger cohorts. This, of course, has contributed to a further dynamic: wealth is disproportionately held by the older generations.

Neither will advocates of a wealth tax or higher income taxes on the rich in general find much solace in the book. Johnson argues that ‘high incomes are generally taxed quite effectively.’ High wealth is not, but that does not lead to him to advocate a wealth tax, in part on pragmatic grounds, given evidence that the most successful innovators’ behaviour is also particularly responsive to tax rates. He advocates measures in other areas. In particular, he supports aligning capital gains rates with income taxes, while also providing new relief to remove the disincentive to put equity into a company, potentially leading to higher revenue and investment, and superior capital allocation.

One slight quibble is that Johnson is better at diagnosis than detailed cure: he suggests three major challenges which policy makers should be focused upon – specifically health, wealth and geography. He does not, however, articulate what such focus might imply. In his defence, this would probably take another book, and a much longer one than this excellent - and short - volume.