Professor Tim Callan:

It is 20% for the bottom income group and around 14% and 15% for the top income group. That points to something going on in the income distribution which a single number such as the Gini coefficient, which is the most commonly used, cannot capture.

The fall at the bottom is disequalising, while an above average fall at the top is an equalising factor. They are washing out in the two and thus one gets a full picture from the income deciles.

I compliment Professor Dorothy Watson and Professor John FitzGerald on what they have been saying. Another point concerns isolating what is going on when comparing income distribution in two years. Policy effects are coming through on two routes, one of which is the structure of policy such that one can set up a tax system and a welfare system with certain characteristics. The other is the structure of market income. Consequently, with a given policy structure - if it is a progressive system as most modern European systems are - as one has more unemployment or more people with very high incomes, they do more work on account of this. Consequently, when one is comparing figures for two years or two countries, one is simply not comparing systems but an effect that has to do with pre-existing income distribution. In order to isolate the effect of changes in policy structure, we use a tax benefit model. SWITCH is the ESRI's model which is very much along the lines of other international models. When we do this and look at the full picture in the period from 2009 to 2015, we get the graph shown as figure 2 in the submission, where the greatest reduction in income imposed by changes in policy structure is at the top decile and next at the bottom decile. It is a complex picture in between, but for many groups, the loss in disposable income is close to 10%. This is quite different from what people sometimes perceive as being the squeezed middle as it is the top and bottom groups that are being squeezed more. We have not yet had the chance to update the figures since 11 a.m. and will do so as soon as we can, but I would not expect them to shift to a major degree in respect of the policy impact. This is to explain why what may at first appear to be different answers from different parts of the ESRI and so on are actually answers to different questions.