The 2008 financial crisis led the UK government to bail out British banks
at an estimated cost of £141bn, with exposure to liabilities of over £1
trillion.8 This unprecedented state intervention was undertaken to prevent
a collapse of the British banking system. At the same time, the
government began a £31bn stimulus effort, which included reducing VAT,
bringing forward capital spending on schools and social housing, and
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deferring an increase in corporation tax. The stimulus programme lasted
until 2010; during that time, incomes grew fastest for the poorest fifth of
the population (at 3.4 per cent) and slowest for the richest two-fifths (at
0.3 per cent).9