It may seem like a lifetime ago, but it was merely a year past last weekend that Boris Johnson led the Tory party to a thumping victory set to the beat of Brexit and accompanied by lyrics of “levelling up”. At the core of this anthem was the view that Britain, set free from the shackles of overbearing EU bureaucracy, could now embark on a journey to overhaul its desperately lopsided economy by spending money on projects that would bring prosperity to all.

As Christmas hits go, it was a resounding success in the campaign to win over legions of traditional Labour voters in the north of England who were at the front of the queue for this spending spree. Then, three months later, coronavirus took hold in the UK. The pandemic hasn’t eradicated the Government’s levelling up message – which featured prominently in last month’s spending review statement – but it leaves serious questions about whether the campaign to drive lasting change in the most disadvantaged areas has moved to mission impossible status.

The lessons from recent history certainly aren’t promising. Economic crisis almost invariably reinforces the gaps between the “Haves” and the “Have-nots” as productivity drops off and money gravitates towards safe havens such as property, rather than being invested in the production of goods and services that create jobs, generate incomes and recycles cash into the economy through consumption.

That is why the monthly wage tracker issued earlier this week by the National Institute of Economic and Social Research (NIESR) is concerning. Based on latest statistics from the Office for National Statistics, NIESR believes 2020 is shaping up to be the worst year for total pay growth since the nadir of the fall-out from the banking crisis more than a decade ago.

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Average weekly earnings, including bonuses, are forecast to rise by a mere 1 per cent in the fourth quarter of this year as lockdown restrictions to control the spread of the virus, plus continued uncertainty regarding the pandemic, put downward pressure on private sector pay. Meanwhile, half of workers in the public sector – which has led the way in pay growth in 2020 – have now been put under a pay freeze.

“2020 will probably end up being the worst year for total pay growth since 2009,” NIESR senior economist Cyrille Lenoel said. “Pay freeze for a large part of the labour force, in addition to lost income during the time spent in furlough, have put more strain on the labour market than the modest rise in unemployment suggests.

“Even with the roll-out of an effective Covid-19 vaccine, the recovery in the labour market will take time.”

That increase in unemployment can only be described as “modest” in the context of the enormous shock that is still reverberating through the economy. As we discovered earlier this week, redundancy levels across the UK hit a record high of 370,000 jobs lost between August and October, up from the previous all-time record of 317,000 in the preceding three months.

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And though the unemployment rate in Scotland dipped ever so slightly to 4.2% in the latest reading, the number of people claiming benefits in this country now stands at 214,200 – an increase of 87% from the same period a year ago.

None of this takes account of those still on furlough, the UK Government support scheme that was meant to close at the end of October, but is now set to finish on March 31. Worryingly, NIESR suspects that the number of furloughed workers has probably increased for the first time since April. As the March 31 deadline comes closer, it is widely acknowledged that many of those jobs will inevitably be axed.

The cost of this is not falling evenly throughout society. According to researchers from University College London, the pandemic is worsening inequalities and making the poor even poorer.

Their study found that almost half of those who were already struggling financially prior to the first national lockdown said their situation was now “much worse”. A further quarter said they were “worse” off.

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By contrast, only 20% of those who reported being financially comfortable prior to the pandemic believed they were now worse off. More than a quarter – 27% – said they were actually doing even better than before.

Considering the geography of where the Prime Minister’s “levelling up” message made a particular impact last year, it’s interesting to note the regional differences uncovered by the study from University College London. Those from the north-east of England – the very folk identified as living in areas most in need of an economic hand-up – are also most likely to have been hit in the wallet by the pandemic. Almost two-fifths said they were worse off than before the first lockdown.

Of course it’s not just specific regions that suffer disproportionately, but specific groups as well. Women and young people are over-represented in part-time, lower-paid work, and this is exactly where the brunt of the decline in employment has so far landed. The self-employed, those with low levels of education and people living in large families are also bearing an unequal share of the burden.

A study earlier this year from the London School of Economics (LSE) found that for employees earning less than £151 per week in February, the probability of being furloughed or having their hours cut by at least half was almost three times higher than for those earning more than £600 per week.

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Those aged 18-24 who were still employed in June were 18 percentage points more likely to suffer furlough or a reduction in hours than 35- to 54-year-olds, the LSE said. Meanwhile, those with only GCSE equivalent qualifications were 17 percentage points more likely than those with a degree to be on furlough or have their hours slashed.

Inequality is dangerous because, once it reaches a certain level, it causes deep financial and economic instability. Wealthy people channelling their money into financial markets or property creates economic bubbles where prices strongly exceed an asset’s intrinsic value, while also strangling productive economic activity. Such was the case in 1929, and again in 2007.

Since the 1970s, income inequality has risen sharply in most advanced economies on the planet. According to figures from the World Bank, the UK is the most unequal nation in Europe, though it is more equal than the US, which is the most divided wealthy nation in the world.

The UK has made some marginal improvement in the 21st century, but that now looks set to be thrown into reverse. “Levelling up” might seem like mission impossible, but a recovery from this crisis that leaves a substantial proportion of the population behind will only sow the seeds for the next round of economic misery.