That inequality has risen since Labour came to power in 1997 is seen by some critics of the government as its most damning failure. But the good news is that the picture is not as bleak as they would have it. While traditional indicators do suggest rising levels of inequality, they present a false picture distorted by the super-rich in the top one percent.
In reality, under Tony Blair the bottom 20 percent have seen their incomes grow by a comparable rate to the richest fifth. So, while we might prefer that those with the least gain disproportionately more than those with the most, we should recognise that at the moment we are, at least, going in the right direction.
Were we not to recognise that the actions Labour has taken so far – the minimum wage, rises in income support and the plethora of tax credits for working families – have produced a different political economy to Thatcherism, we would throw into question the notion that state intervention can indeed make a difference. And, despite the achievements of the past six years, more action is most definitely what Labour should be embarking on.
We need to recognise that reducing inequality on the quiet has probably reached its limits. To push forward, the government must make the case for equality and change the nature of the political debate (just as it did on the issue of tax and spend). For too long, equality – the animating spirit of the Labour party – has been the principle that dare not speak its name. We have for too long allowed the right – with its ridiculous distortions of the concept – to set the terms of the debate.
So let’s be clear: a push for greater equality is neither antithetical to a belief in greater liberty, nor is it a recipe for drab uniformity. True freedom for all can, in fact, only be built where there are equal choices and opportunities for all. By undermining social cohesion, inequality provides a breeding ground for crime and disorder. More equal societies, furthermore, tend to be more successful at creating wealth through more dynamic economies and higher growth.
Politically, explicitly embracing a vision of a more equal Britain could reap Labour’s leaders great rewards. It would reassure party members that the government’s individual achievements, of which most are rightly proud, are part of a coherent Labour vision for Britain. As we argued last issue, it is not only the party that needs a clearer sense of where Labour is taking it. The country, too, has not been won over solely by managerialism and an emphasis on delivery.
Those popular, progressive policies to which Labour needs to give greater prominence would be unified and pushed forward by a pledge to tackle the inequality gap. Just as privatisation and council house sales epitomised and popularised the Thatcher vision of individualism and entrepreneurialism, so this agenda perfectly embodies Labour’s commitment to equality. The new Child Trust Fund – or ‘baby bond’ – is the perfect example of a policy that Labour needs to shout from the rooftops, as well as working to expand and entrench. Any assault by the Tories on the fund would then be met with genuine and outraged howls of indignation and protest from voters.
In its third term, Labour should continue to tackle inequality at its roots. We recognise that it is investment in pre-school children that has the greatest impact on a child’s life chances. So let’s turn Sure Start from a brilliantly innovative pilot scheme into a nationwide advertisement for the kind of practical and radical policies that Labour is capable of producing. And let’s build on the childcare tax credit to ensure high-quality, affordable childcare is available to everyone, everywhere.
Instinctively, Labour’s leaders know that building a more equal society is the party’s great mission and the underlying purpose of this government. Now is the time to spell that out.