Get Red Pepper's email newsletter. Enter your email address to receive our latest articles, updates and news.

×

The irresponsibility of the rich

Inequality has widened: the child poverty figures are up by 100,000 for the second year running and pensioner poverty is once again on the rise. Faced with these shocking figures, Ruth Lister argues for a radical shift in the terms of the debate

September 18, 2008
11 min read

The most recent statistics show that the government has to more than redouble its efforts if it is to have any chance of meeting its target of halving child poverty by 2010. While it was right to prioritise children and pensioners, its lack of concern about poverty among childless adults of working age has come back to haunt it in the 10p tax band fiasco. The poverty rate for working-age childless adults is now close to a modern record, according to the Institute for Fiscal Studies (Poverty and Inequality in the UK: 2008 by Mike Brewer, Alastair Muriel, David Phillips and Luke Sibieta).

More generally, the government’s unwillingness to acknowledge underlying structural inequalities, such as of class, gender and ethnicity, or how its own economic policy has fuelled inequality, particularly at the very top of the income distribution, means that economic inequality is slightly wider than when Labour came to power more than a decade ago.

In 2006/07, the top fifth of earners enjoyed 44 per cent of the country’s post-tax income; while the bottom fifth made do with just 6 per cent (1 per cent less than in 1997/98). While it is important to contrast this with the massive widening of the wealth gap under the Tories, and to acknowledge that without Labour’s anti-poverty policies the gap would be wider still, we have to say loud and clear that this is just not good enough.

Beyond meritocracy

Equality stands at the heart of the progressive agenda. As a material reality inequality distorts our lives and our social and political relationships with each other. The ideal of equality offers us hope of a better society and way of being. It is rare to hear New Labour politicians talking in such terms. Instead, the talk is of meritocratic opportunity, aspiration and social mobility.

Not everyone can or wants to climb the meritocratic ladder. Why, for instance, should someone who sees their vocation as caring for others – be it children or older people – have to make do with a pitiful fraction of the rewards enjoyed by those in the City or on a football pitch?

The very fabric and construction of the ladder is unfair in terms of the skills and experience it values and, as the reference to care work suggests, the bias in its construction is heavily weighted against women. Moreover, the ability to live a full and flourishing life should not be the preserve of the privileged, but should exist for everyone regardless of their place on the ladder.

Changing the terms of the debate

One reason for New Labour’s timidity is that even those who subscribe to a more egalitarian agenda fear that it will alienate the electorate. It is one of the paradoxes of public attitudes that surveys consistently show a large majority unhappy about the disproportionate rewards at the top and about the gap between rich and poor. Yet a much smaller and diminishing group supports redistributive policies to narrow the gap.

This may be indicative of the limits of a policy of redistribution by stealth without a clear articulation of egalitarian values in mainstream political debate. If even a Labour government is not prepared to make the case for redistribution, then perhaps the public comes to believe the case is a weak one and that government does not have a legitimate role to play in narrowing the gap.

If that is what has happened, then one of our main challenges is how to change the terms of the public debate and make the case for tackling inequality. What follows does not claim to be the answer but simply offers some ideas.

The first step is to convince the public and the government that urgent action is essential for the health of our society; the second is to make a persuasive case for government action. This means painting a tangible picture of how inequality harms us and of what a more equal society might look like.

The statistics about inequality and poverty do not get us very far. They are important in measuring change and holding governments to account. But they don’t engage people; indeed they can have the opposite effect, as often people simply don’t believe them.

Can we therefore find ways of bringing home the reality of inequality’s corrosive impact on everyday lives? On people’s health – for instance, Michael Marmot’s example of the 11-year life expectancy gap between Hampstead and St Pancras, the same as between the UK and Guatemala? (‘Reducing inequalities in heath: a policy choice’ by Michael Marmot in Live Longer Under Labour!, Fabian Review vol 120, no 1, 2008). On access to housing? On children’s educational experiences and life chances? On the environment in which people live, and the quality of their social relations?

As the work of Marmot and Richard Wilkinson, professor of social epidemiology at the University of Nottingham and author of The Impact of Inequality: how to make sick societies healthier (Routledge, 2005), demonstrates, it is not just those living in poverty who suffer but those on low to middling incomes too; indeed the whole fabric of society is damaged.

The need for such examples points to a missing space in political debate between the details of specific policies and the generality of abstract values. This space needs to be filled in with a more concrete vision of what a more equal society might look like. And we have to show that we believe that such a society is possible.

The irresponsible rich

One of the values upon which New Labour places great emphasis is responsibility. Responsibility is an important element of citizenship but I am tired of constantly hearing about the responsibilities of ‘the poor’ and the need to change their behaviour and nothing about the responsibilities of the privileged. It is time to expose their irresponsible behaviour, which is considerably more damaging to society. Three examples of this irresponsible behaviour relate to the economy, the exchequer and the environment.

Most visible in recent months has been the irresponsible behaviour of those in the City and the boardroom driving high-risk, bonus-crazy, irresponsible capitalism, leading to the credit crunch, which hurts other people much more than themselves.

During the boom the rich distorted the housing market, particularly in London, contributing to unprecedented levels of housing inequality, and now the credit crunch is squeezing those at the lower end of the housing market. The TUC has recently drawn attention to the irresponsibility of tax evasion and avoidance by individuals and companies, who cheat society of resources and act as if it is their right not to pay their dues.

From a global perspective, Christian Aid has argued that the lives of almost 1,000 children could be saved every day if only the super-rich and the world’s largest companies paid their fair shares in taxes. And that figure relates only to illegal, trade-related tax evasion; it would be far higher if it included other forms of tax evasion and legal methods of tax avoidance. The report (Death and Taxes: the true toll of tax-dodging, May 2008) points out how the pursuit of profit trumps social responsibility.

Finally, we should name and shame the ecological irresponsibility involved in the ways in which many of the rich spend their money. Earlier this year I watched in fascinated horror Robert Peston’s BBC programme on the super-rich. The only woman to whom he spoke was part of the industry that has grown up to help the super-rich spend their money; as more than 90 per cent of the richest 0.1 per cent is male this gender bias is not surprising. We’re not just talking gas-guzzling cars here but massive ‘super’ yachts, private jets, submarines and a Valentine’s Day dinner on an Arctic iceberg.

It is those in poverty both domestically and globally who pay a higher price for climate change. Globally, a series of reports has underlined how the costs of global warming are borne disproportionately by the poorest countries, with predictions of growing numbers of environmental refugees as a result. In the UK, to take just one example from a new book on social justice and public policy, half of all carcinogenic emissions occur in the 20 per cent most deprived wards, in contrast to 9 per cent in the 20 per cent least deprived (‘Understanding environmental justice’ by Maria Adebowale in Social Justice and Public Policy eds Gary Craig et al, Policy Press 2008).

We need, therefore, to do more to link the inequality and environmental agendas. The notion of environmental justice has been developed but it is not yet part of mainstream political debate and the extent to which the rich are fuelling environmental injustice is not being exposed.

Policy agenda

The second step in changing the nature of the debate on inequality involves rebuilding public confidence in the state (with all its flaws) as an instrument of fairness, with reference to both distribution and redistribution. There needs to be another look at the remuneration structures that fuel inequality. Giving shareholders the power to vote on directors’ pay has not worked.

It is depressing to contrast the German Christian Democrat chancellor Angela Merkel’s call for a crackdown on fat cat abuses with John Hutton’s celebration of super-high salaries as an indicator of success. Indeed, the British government intends to lead the opposition when it comes to EU finance ministers’ plans to attack the ‘social scourge’ of excessive executive pay and bonuses. The political mood among EU leaders and the evidence of public disquiet about the distribution of original incomes and about excessive high salaries and bonuses creates potential space for a debate about inequality.

Questions such as what is a fair differential between top and bottom earnings and about the rewards attached to different kinds of work should be part of the debate. A responsibility agenda opens up the space to talk about taxation, not as a burden but as an exercise of citizenship responsibility. There is still a strong case for a higher rate of tax for those earning over £100,000. This could raise nearly £8 billion – more than twice the minimum needed to meet the next child poverty target, even allowing for behavioural changes (primarily tax avoidance) in response to any tax increase. Such changes could be minimised if a higher rate were combined with tougher action on tax abuses, as called for by the TUC.

In addition, other reforms could make the tax and national insurance systems more progressive and wealth inequalities could be reduced through reform of inheritance tax, as proposed recently by the Fabian Society.

At the other end of the income distribution, a focus on the responsibilities of the rich would fit well with the government’s call in its latest child poverty strategy document for a new ‘contract out of poverty’ in which ‘all parts of society will do their bit’. Paying more tax is one way the rich can ‘do their bit’. This would help to pay for the improvements in benefits and tax credits, which have to be one element in achieving the child poverty targets.

Current benefit up-rating policy, which links most benefits to prices but not average household incomes, is criticised for fuelling economic inequality in a recent Joseph Rowntree Foundation-funded report (Keeping up or falling behind? The impact of benefit and tax uprating on incomes and poverty by Holly Sutherland, Ruth Hancock, John Hills and Francesca Zantomio, Institute for Social and Economic Research, 2008).

While the government is to be congratulated for improving financial support for children in real terms, it has ignored their parents’ benefits. Moreover, the differential impact of inflation on those on low incomes, as the prices of necessities such as food and fuel soar, eats into low wages and benefits and means that inflation-proofing is not providing adequate protection.

As the government places more and more emphasis on the responsibilities of benefit recipients, and as benefits become increasingly conditional, it should articulate a clear goal of a right to benefit sufficient to enable people to live decently and with dignity in keeping with human rights principles.

At the Compass conference on equality in June, ministers sympathetic to the equality agenda acknowledged its importance but lacked any sense of urgency with regard to the action needed. If Labour only has two more years in power, it should use the time to turn the tide of inequality decisively; otherwise it would be a tragedy of missed opportunity if, after three full terms, it left Britain more unequal than when it came to power.

Ruth Lister is professor of social policy at Loughborough University. This article is based on her keynote presentation at the Compass Robin Cook Memorial Conference on equality in June 2008

Red Pepper is an independent, non-profit magazine that puts left politics and culture at the heart of its stories. We think publications should embrace the values of a movement that is unafraid to take a stand, radical yet not dogmatic, and focus on amplifying the voices of the people and activists that make up our movement. If you think so too, please support Red Pepper in continuing our work by becoming a subscriber today.
Why not try our new pay as you feel subscription? You decide how much to pay.

Contribute to Conter – the new cross-party platform linking Scottish socialists
Jonathan Rimmer, editor of Conter, says it’s time for a new non-sectarian space for Scottish anti-capitalists and invites you to take part

Editorial: Empire will eat itself
Ashish Ghadiali introduces the June/July issue of Red Pepper

Eddie Chambers: Black artists and the DIY aesthetic
Eddie Chambers, artist and art historian, speaks to Ashish Ghadiali about the cultural strategies that he, as founder of the Black Art Group, helped to define in the 1980s

Despite Erdogan, Turkey is still alive
With this year's referendum consolidating President Erdogan’s autocracy in Turkey, Nazim A argues that the way forward for democrats lies in a more radical approach

Red Pepper Race Section: open editorial meeting – 11 August in Leeds
The next open editorial meeting of the Red Pepper Race Section will take place between 3.30-5.30pm, Friday 11th August in Leeds.

Mogg-mentum? Thatcherite die-hard Jacob Rees-Mogg is no man of the people
Adam Peggs says Rees-Mogg is no joke – he is a living embodiment of Britain's repulsive ruling elite

Power to the renters: Turning the tide on our broken housing system
Heather Kennedy, from the Renters Power Project, argues it’s time to reject Thatcher’s dream of a 'property-owning democracy' and build renters' power instead

Your vote can help Corbyn supporters win these vital Labour Party positions
Left candidate Seema Chandwani speaks to Red Pepper ahead of ballot papers going out to all members for a crucial Labour committee

Join the Rolling Resistance to the frackers
Al Wilson invites you to take part in a month of anti-fracking action in Lancashire with Reclaim the Power

The Grenfell public inquiry must listen to the residents who have been ignored for so long
Councils handed housing over to obscure, unaccountable organisations, writes Anna Minton – now we must hear the voices they silenced

India: Modi’s ‘development model’ is built on violence and theft from the poorest
Development in India is at the expense of minorities and the poor, writes Gargi Battacharya

North Korea is just the start of potentially deadly tensions between the US and China
US-China relations have taken on a disturbing new dimension under Donald Trump, writes Dorothy Guerrero

The feminist army leading the fight against ISIS
Dilar Dirik salutes militant women-organised democracy in action in Rojava

France: The colonial republic
The roots of France’s ascendant racism lie as deep as the origins of the French republic itself, argues Yasser Louati

This is why it’s an important time to support Caroline Lucas
A vital voice of dissent in Parliament: Caroline Lucas explains why she is asking for your help

PLP committee elections: it seems like most Labour backbenchers still haven’t learned their lesson
Corbyn is riding high in the polls - so he can face down the secret malcontents among Labour MPs, writes Michael Calderbank

Going from a top BBC job to Tory spin chief should be banned – it’s that simple
This revolving door between the 'impartial' broadcaster and the Conservatives stinks, writes Louis Mendee – we need a different media

I read Gavin Barwell’s ‘marginal seat’ book and it was incredibly awkward
Gavin Barwell was mocked for writing a book called How to Win a Marginal Seat, then losing his. But what does the book itself reveal about Theresa May’s new top adviser? Matt Thompson reads it so you don’t have to

We can defeat this weak Tory government on the pay cap
With the government in chaos, this is our chance to lift the pay cap for everyone, writes Mark Serwotka, general secretary of public service workers’ union PCS

Corbyn supporters surge in Labour’s internal elections
A big rise in left nominations from constituency Labour parties suggests Corbynites are getting better organised, reports Michael Calderbank

Undercover policing – the need for a public inquiry for Scotland
Tilly Gifford, who exposed police efforts to recruit her as a paid informer, calls for the inquiry into undercover policing to extend to Scotland

Becoming a better ally: how to understand intersectionality
Intersectionality can provide the basis of our solidarity in this new age of empire, writes Peninah Wangari-Jones

The myth of the ‘white working class’ stops us seeing the working class as it really is
The right imagines a socially conservative working class while the left pines for the days of mass workplaces. Neither represent today's reality, argues Gargi Bhattacharyya

The government played the public for fools, and lost
The High Court has ruled that the government cannot veto local council investment decisions. This is a victory for local democracy and the BDS movement, and shows what can happen when we stand together, writes War on Want’s Ross Hemingway.

An ‘obscure’ party? I’m amazed at how little people in Britain know about the DUP
After the Tories' deal with the Democratic Unionists, Denis Burke asks why people in Britain weren't a bit more curious about Northern Ireland before now

The Tories’ deal with the DUP is outright bribery – but this government won’t last
Theresa May’s £1.5 billion bung to the DUP is the last nail in the coffin of the austerity myth, writes Louis Mendee

Brexit, Corbyn and beyond
Clarity of analysis can help the left avoid practical traps, argues Paul O'Connell

Paul Mason vs Progress: ‘Decide whether you want to be part of this party’ – full report
Broadcaster and Corbyn supporter Paul Mason tells the Blairites' annual conference some home truths

Contagion: how the crisis spread
Following on from his essay, How Empire Struck Back, Walden Bello speaks to TNI's Nick Buxton about how the financial crisis spread from the USA to Europe

How empire struck back
Walden Bello dissects the failure of Barack Obama's 'technocratic Keynesianism' and explains why this led to Donald Trump winning the US presidency