GORDON Brown rightly raised escalating child poverty at the Edinburgh Book Festival. and to be fair he made efforts when he was Chancellor, even if he failed to address growing inequality in so many other ways. But it’s worse than ever now and only one manifestation of the growing divide between rich and poor.
Income inequality is not the only sign of a divided and increasingly fractured society; rising crime, mental health, and even obesity are also indicators. It also threatens our democracy, as power, not just wealth, is concentrated in the few not the many.
The election of President Trump is a clear example, which was brought about not so much by the despair and anguish of the left-behinds, most of whom didn’t vote for him anyway, but by the rich and powerful. American oligarchs delivered the cash and influence for him and are now being rewarded with tax cuts whilst welfare and Medicare are cut.
Received wisdom when I was Justice Secretary and the financial crash occurred was that crime would rise. It didn’t even as poverty increased, as after all, the poor are disproportionately victims rather than perpetrators of crime – though it wasn’t rocket science that showed the postcode of prisoners correlating with the areas of highest deprivation.
But, as inequality has increased crime, and violent crime has also grown as London evidences. Opulence cheek by jowl with no hope of ever achieving those trappings breeds resentment and a willingness to get them any which way.
A recent article in the Economist detailed research showing that fat, once argued to be a feminist issue, is now one of inequality. Studies of childhood obesity in neighbouring London boroughs showed a decline of two per cent in affluent Dulwich Village but an increase of 11 per cent in poverty-stricken Camberwell Green.
There are still those who say it’s a lifestyle choice and condemn the undeserving poor. Tragically, many in positions of influence show that the same takeover by the rich and powerful has taken place in this country, as in the US. With a Cabinet of millionaires, it’s hardly surprising but the crassness of statements by wealthy pundits or elected representatives about feeding a family for pennies on a bag of porridge are still revolting, reminiscent of Marie Antoinette and “let them eat cake” to the starving sans culottes seeking bread.
They show neither compassion nor understanding of our society where the poor are excluded from so much and the costs for them disproportionately high. Areas of New York described as “fruit free” and where cheap fast food outlets abound are now replicated here. It’s not ignorance or lifestyle choice but imposed by necessity and geography.
A premium is also paid with other necessities of life simply for being poor . Banks reward high rollers and punish the poor, utility companies likewise. A relative’s washing machine recently broke down and it was £7, just for the laundrette’s basic wash and double if there was a big load. That might well see the kids go hungry in many a household but it’s less than others pay their daily dog walker.
Of course, the most obvious manifestation is in pay. Recent statistics showed that whilst the earnings of most had stagnated at best and mostly declined, certainly in real terms, that of the top earners had grown. With no sense of shame, it was announced that chief executive pay had jumped by 11 per cent. At the same time statistics from the Equality Trust showed that a care worker earned 0.45 per cent of the salary of the average FTSE-100 CEO, the average wage was 0.73per cent and the minimum wage a paltry 0.38 per cent. That’s neither morally right nor good for our society .
It’s many years since Wilkinson and Pickett’s book The Spirit Level aptly and succinctly detailed how more equal societies were healthier, more productive and environmentally better across 11 different indices. Now, tragically, the UK in particular, and many other western countries, are playing it out in reverse.
Of course, it’s often said that the poor are always with us and there’s some truth in that. But, the progress made in narrowing the gap has gone into reverse and the ostentatious flaunting of wealth has increased. Thatcherism bred the “loadsamoney” culture lampooned by Harry Enfield but sadly all too prevalent in the City of London. It wasn’t just inflated salaries but a glorification of wealth. But it’s widened and worsened in recent years as “Thatcher’s children” have grown up, venerating Mammon and taunting the poor, the very nadir being the story last of the archetypal Cambridge University Tory Boy burning a high denomination note in front of a homeless man.
Once upon a time our tax system was designed to try and at least mitigate against that. It didn’t stop the rich remaining rich even when Denis Healey pledged to “tax the rich until the pips squeaked”. But, it did at least place a greater burden on those with most and reflected a society seeking to tackle poverty and narrow the gap.
Now, our tax system is broken with companies like Amazon avoiding a fair share of their huge profits and not offset by paying their staff even moderately well. Meanwhile the Institute for Fiscal Studies, an organisation I wouldn’t normally reference, showed it’s not so much income but wealth where real inequality lies. That’s where the real money and power exist.
They showed how the system “allows those lucky or skilful in the accumulation of capital to pay much less tax than those whose income is derived as earnings”. This is self-evident when the Panama Papers show a Prime Minster and even the Royal Family hiding their wealth and avoiding tax whilst the low-paid PAYE earner is caught.
The wealthy must pay their share and the gap between rich and poor be narrowed. It’s not just a moral argument but how to achieve a healthy and productive society. If we don’t then bitter and angry people will react and gated communities won’t offer enough protection.
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