Alf Dubs on the need to tackle head on the trends towards greater inequality and poverty in the UK
There is a morass of statistics about inequality and poverty in the UK, but one thing that they all do is highlight how the level for both is high. A question for government ministers and politician more broadly therefore, is whether or not this is the price we have to pay for our present relatively high living standards? Or if they believe – as I do – that the price is too high, then what can be done?
Second only to the United States, the UK has the highest levels of inequality of any advanced democracy. Without our redistributive tax and welfare system, the situation would be much worse. So, it is rather surprising that a contender in the Conservative leadership contest has committed to reducing the tax on people earning over £50,000 a year. Hardly the most impoverished group in society.
The recently published Deaton Review on inequalities in the twenty-first century includes some clear statistics on the problem and seeks to track the issues over a further five year study. But there has been an even more critical United Nations report on the impact of austerity on human rights within the UK that predicts close to 40% of children will be living in poverty two years from now. Millions of people in jobs meanwhile, are dependent on various forms of charity including food banks.
There has been a runaway rise in incomes, with those in the richest households almost tripling their salaries in the last four decades. In 2017, pay among FTSE100 CEOs was on average 145 times that of the average worker – compared to just 47 times in 1998. In addition, real wages are still below the pre-crisis level. And in the financial year ending 2018, the wealthiest fifth of individuals in the UK saw a 4.7% increase in their disposable income – compared to a 1.6% decline for the poorest fifth.
There are of course, other income inequalities, impacting variously on women, the young (with a knock on impact on their life chances within the housing market), older people, the black and ethnic minority population, and those with disabilities – with the latter suffering more than most.
But inequality is not just about income. As the Deaton report makes clear, there is a divergence in life expectancy between deprived and affluent areas of our country, and a growing burden of poor mental health among disadvantaged groups. There is also a geographical divergence between our successful cities and our former industrial towns and coastal areas.
So, inequality cannot be reduced to one dimension – stemming as it does from many forms of privilege and disadvantage. The real question however, is whether the immorality of increased inequalities in our country are sustainable. Or whether they should be condemned and tackled with urgency.
I am very much of the latter view, and it is good to see my party bringing forward imaginative – and costed – solutions, including a National Transformation Fund aimed at rebalancing the economy and a National Investment Bank (with regional arms). I also welcome plans for tackling tax avoidance and evasion, increased corporation tax and a hike in the living wage, with the latter including a more equitable system that benefits younger workers.
As it stands however, we are not yet the party of government and a general election could be as far off as the early summer of 2022. I hope therefore, that the minister responding to my debate in the Lords this week will give some indication of what his party plans to do to reverse the current, depressing trends.
Lord Alf Dubs is a Labour Peer. He tweets @AlfDubs
Published 11th June 2019