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Ruth Lister
© Ruth Lister 2007
I didn't know whether to laugh or cry. No sooner had inequality emerged as a key issue in the Deputy Leadership debate than two of the contenders - Alan Johnson and Hazel Blears - had trotted out the tired old right-wing cliché of a 'politics of envy' in an attempt to shut down further argument. Blears went further and ridiculed Harriet Harman's concerns about an increasingly divided society (and the proposal to reinstate the standing Royal Commission on the Distribution of Income and Wealth, but 21st century style) as a return to the Life on Mars Britain of the 1970s, complete with 'flares, tank-tops and Austin Allegros'. Well, I'm sure none of us wants to do a Sam Tyler and have to face the casual and explicit sexism, racism and homophobia of 1970s Britain, never mind wear the flares. But despite much that was wrong with the 1970s, they ended with Britain a much more equal society than it is today.
Three decades on, it's been more of a case of time-travelling back a century to Edwardian England with its luxury class. 'As Britain's rich get richer, supply of butlers dries up' was a recent headline in The Independent (30 May). In an earlier piece (27 June 2006) it pointed to 'an astonishing' rise of the 'super-rich' indulging in conspicuous consumption - private jets and yachts and £85 sandwiches from Selfridges. £85 - the equivalent of just under 16 hours at the minimum wage or marginally less than the weekly retirement pension.
So, from the perspective of economic inequality, Britain has regressed since the Life on Mars era - which of course ended with Margaret Thatcher's rise to power and the triumph of neo-liberalism (discussed in other contributions to the Soundings debate). Both poverty and inequality soared during the Thatcher years. Official figures show that the richest tenth of the population now enjoys nearly three-fifths of total national income while the bottom tenth makes do with 1.6 per cent. This compares with a fifth and four per cent respectively in 1979. The top one per cent owned 24 per cent of all marketable wealth in 2002. At the other end of the scale, just over a fifth of the population, including 3 in 10 children, lives in poverty.
The New Labour government has had some success in reducing child and pensioner poverty (even if it didn't meet its first child poverty target) but has ignored poverty among childless working-age adults, which has increased slightly to its highest level since 1961 according to the Institute for Fiscal Studies (IFS). Reducing inequality has not been a goal. Indeed, during the first term income inequality continued to rise and it was only in the second term that it started to fall slightly so that at the end of the second term it was about level with when New Labour came to power. But it has since risen again, as measured by the Gini coefficient, reflecting in particular the growth in incomes at the very top. Nevertheless the general consensus is that, without New Labour's tax-benefit policies, inequality would be even higher.
The statistics are important in measuring change. But they don't of themselves get across the damaging impact that inequality has on society or how inequality is fuelling the 'social recession' identified by Compass. In terms of the fabric of our everyday lives many of us are probably more aware of, say, the effects of intensified pressures at work and the difficulties of finding time for friends, family and ourselves than of inequality's insidious impact. Yet, research points to how physical and mental health, housing, educational chances and social relations are all profoundly shaped by inequality. One of the challenges facing us is how to make these links more visible so that it is harder to dismiss the politics of inequality as the 'new hatred of wealth', as blazoned on the cover of last week's Spectator.
We also have to expose the limitations of the individualistic, meritocratic model of social justice adopted by New Labour. Rather than the ladder of opportunity its proponents promise it serves as an engine of inequality by fuelling 'winner takes all' tendencies and by legitimising unequal outcomes as the deserved rewards of merit or the crumbs of failure. It also does nothing to question the (gendered) value we place on different kinds of work and on their contribution to society. So, for instance, should we not be doing more to improve the pay, conditions and status attached to care work, rather than equating success and aspiration with better paid, but probably less useful, jobs?
However, while I think we should reject the meritocratic model, politically we can't ignore the dominant discourse of aspirations associated with it. Of course people have aspirations for themselves and their children. But, whenever politicians counter demands for action to reduce privilege with the mantra that we must not 'cap aspiration', we should point to the evidence of how aspirations are more likely to be achieved in more egalitarian societies. Social mobility is higher in these societies than in more unequal ones, which peddle the myths that everyone can make it to the top, and that the problem of poverty is primarily a problem of the 'poverty of aspirations'.
Arguments similar to these have been made by the other main New Labour position on inequality: the 'new egalitarianism', which was enunciated in a collection edited by Tony Giddens (the New Labour peer) and Patrick Diamond (former Special Adviser at No 10). The new egalitarianism acknowledges that genuine equality of opportunity requires greater material equality. However, it shares with the meritocratic model a primary concern with the distribution of opportunities rather than of income and wealth.
In contrast, what I have called 'the real egalitarianism', promoted by organisations such as Compass, prioritises the distribution of income and wealth over the distribution of opportunities. Of course, it doesn't argue for unequal opportunity. But it believes that the good society is a more equal society in which all are able to flourish and in which genuine recognition of equal worth and common citizenship is not undermined by the social distance created by the yawning gap between rich and poor. From this perspective, it is socially unjust and morally obscene that some enjoy such huge rewards, irrespective of how they gained them, when others have to make do with so little.
The knee-jerk Blairite response to such arguments, as exemplified by Hazel Blears' retort to Harriet Harman, is to warn that they will drive 'hard-working families' with aspirations into the arms of the Tories. Yet, the British Social Attitudes Survey suggests that the real egalitarians are not so out of line with public opinion as is often assumed. Over the past two decades the survey reveals consistently high majorities who believe that the income gap is too wide. Interestingly, the public appears to be more affronted by the level of incomes at the top than at the bottom - and that's even when they underestimate just how high incomes are at the top.
Admittedly, these views do not translate into majority support for the principle of redistribution and enthusiasm for it has been falling in recent years. Nevertheless, when the survey asked whether the public thought that the government was doing too much, too little or about the right amount 'to redistribute income for the better off to those who are less well off', the largest group - 38 per cent - said 'too little' or 'much too little'. The authors of a forthcoming Joseph Rowntree Foundation report (Public Attitudes Towards Economic Inequality, which usefully pulls together what evidence there is on public attitudes towards inequality, suggest that public attitudes should be seen as quite fluid, with potential for change - either way. Thus the fact that even a Labour government is uncomfortable with the 'r' word - and feels the need to redistribute by stealth - could mean the wider public has become more inclined to believe that redistribution must be a 'bad thing'.
This, of course, is a challenge when it comes to arguing for policies to reduce the income and wealth gap. Not all these policies are necessarily about redistribution through the tax-benefit system. For instance, policies could address inequality at source in the education system and the overall wages structure. But political resistance to such policies is likely to be at least as great as to calls for the more progressive taxation of income and wealth. No doubt they would be branded 'punitive' or as 'penalising success' in the same way that the proposal to raise the top rate of income tax to 50 per cent for those earning over £100,000 is. When I hear politicians object that this would cap the aspirations of 'ordinary working families', I wonder if they really believe that 'ordinary' workers can hope to earn such sums? We're talking about a highly privileged small minority. I am a university professor, whose earnings are well above the average, yet I don't expect to be earning over £100,000. And when people dismiss the idea as a 'totem', my response is that we need a few egalitarian totems; moreover, the estimated £3.8bn that it would raise is about the same sum identified by the IFS as necessary to meet the next interim child poverty target.
It's dispiriting when Labour politicians promote a view of taxation as a punitive 'burden' rather than as part of the citizenship contract of rights and responsibilities that they are so happy to talk about when it comes to social security claimants. It's also dispiriting when a government minister - Jim Murphy at the Department for Work and Pensions - argues that social security benefits should never be high enough to lift people out of poverty.
So, much of the mainstream political debate about inequality is profoundly depressing. Nevertheless, the fact that the debate is happening at all gives cause for some optimism. How can the left now capitalise on this to win the argument for greater equality and for a range of policies to achieve it?
Ruth Lister is Professor of Social Policy at Loughborough University and author of Poverty (Polity Press). Some of the arguments in this piece are developed at greater length in a chapter in Gerry Hassan's After Blair (Lawrence & Wishart).
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