There is no consensus on how to measure inequality. Do we measure it by gini efficient or top 10% versus bottom 10%? What about the top 1% versus the rest (haves and have yachts)? Is GDP per capita the most useful? However you measure it, the rich have gotten richer and the poor have gotten poorer. The UK ranks 102nd for equality in terms of gini efficient. The GDP per capita for inner London is €80,000, compared to the UK’ average of €27,000.
GDP per capita in Kensington, Liverpool is roughly £17,000, but £107,863 in Kensington, London.
Under this government alone, the top 1000 families wealth has increased by 113%, all the while the average family has lost £1600 through tax and benefit changes. Welfare reforms, charities warn, have reversed child poverty figures that improved markedly in the 1990s. In other words, the rich are eating banquets and the poor are eating in foodbanks.
As this gap between rich and poor grows, so too do social tensions. The worlds we inhabit, whichever side we are on, become more and more isolated from the other. The rich feel less of a responsibility to the poor and the poor feel antagonistic toward the rich, unless they wish to and believe they can become rich themselves (though Britons are less inclined to the American Dream). And both increasingly feel less social responsibility to contributing to public services. We are, as Cameron demands, becoming a low tax, low welfare society. And Cameron is at the helm of a second Thatcherite project that will tear the two worlds even further apart.
Politically, this benefits the Tories. They don’t need to create a catch-all party, but rather a blame game. Declare redistribution a politics of envy, then enact their own politics of envy between poor working and unemployed neighbours. The angrier and more fearful the people, the less generous they become. Studies have shown this; with growing inequality, welfare generosity declines and demands for low tax increase. And as welfare and investment declines with no attempt at a living wage or reducing rent, inequality increases even more. This is great for the Tories, but for a Labour Party that has, in recent weeks since a defeat on a supposed 35% strategy, that has been calling for ‘big tent politics’, it seems an impossible challenge.
A big tent politics based on a broad coalition requires some social cohesion. You can offer concessions to Middle England and solace to the poor if the worlds respect, care for and mutually benefit one another, but as inequality increase, such is not the case. Blairism was a short term form of politics that could not sustain itself –and in fact became a source of grievance- because its tent had to keep increasing in size. The rich got richer, spectacularly, and as Labour tried to cater to their needs and wants, as they catered by not interfering with wages, exploitation, tax avoidance, rents, or house prices, there was a group that was eventually going to feel left behind and leave the tent; the working class. And while in 1997 Mandelson had predicted the working class ‘had nowhere else to go’, they do now. Suddenly, new, smaller tents have cropped up to appeal specifically to them as a more distant Labour Party’s tent became ever less hospitable. The SNP and UKIP’s tents were more desirable. Our vote share of C2s began to decline in 2005 and had collapsed completely in 2010, and in 2015 post-independence referendum and European elections –the triggers for a new consciousness that new players were in town- had migrated to nationalists. A rerun of a two party contest in 1997 will not work in a multi-party, ‘split the left’ 2020.
In order to encourage the smaller tent occupiers back into a bigger tent, we must tackle inequality. Our tent cannot house Kensington, Liverpool and Kensington, London in their current states.
But the established ways of tackling inequality –redistribution- means that a big tent politics with an increasingly socially irresponsible rich base of voters who feel less inclined to the voters now determined to be scroungers, as well as being in an era when spending is no longer accepted, is hard to construct. A 50p rate of tax and mansion tax were modest proposals, but were not well placed in a big tent. Such moves were still necessary, however, to remedy inequality and build on the preconditions for a future big tent politics. But our failure in 2015 means those preconditions will not exist to build on in 2020. Instead, Cameron’s One Nation will be even more uglier, more brutish. A land of welfare cuts for the poor and tax cuts for the rich. If we try to build a big tent a la the Blair era in an austerity-ravaged and thus socially incoherent 2020, it will be doomed to fail.
The task now for Labour is to ask how it can redistribute wealth to tackle inequality and still appeal to Middle England. It feels like a juxtaposition, so we must find a way to make it not so. As unpopular as it is to say right now, as much as Milibandism has been thrown to the dogs in –wrongly- its entire form, we have to invent and build on ‘predistribution’. You will have to intervene when markets and businesses do not pay the living wage, in a private renting sector that continues to greedily leach off housing benefit while demanding ever more from their tenants. There are going to be ‘vested interests’ that simply cannot be in the tent. But we can make the case that these interests harm Middle England and the poor, by educating the electorate on inequality’s negative effects on growth and production.
We can build a big tent and still stand up to exploitation.
Inequality hurts everyone, no big tent can be built over two wholly different worlds.