Two heavyweight reports on inequality have thumped onto the desks of ministers and journalists in the past few weeks. Together they present us with a clear ‘we can’t go on like this’ moment. The question is whether politicians, business leaders and those in the City will take it. Or will they fall back on the notion, now thoroughly discredited, that inequality throughout society – and all the health, human and financial costs associated with it – is a price worth paying?
First up we had the National Equality Panel’s Anatomy of Income Inequality. The report warned readers they might be shocked by the sheer scale of inequality and its effects… and duly delivered a picture of a Britain that makes uncomfortable reading. As Harriet Harman referred to in her preface, no one can now say inequality doesn’t matter. It demonstrably does: it affects the quality of our lives, the health of our economy and the state of the communities that we live in.
Most recently, we have had the Marmot Review into Health Inequalities in England. The findings from the review were perhaps even starker: we are all hurting and in need, except for the few at the very top. For Marmot, the “social gradient” was an ever-present spectre: almost every aspect of health and quality of life was hugely affected by income and resource distribution, even if there were ways of ameliorating some of that impact.
The poorest suffer most and require the most support to boost their life chances and wellbeing, that is clear. However, both reports tread new terrain in their emphasis that inequality is not just something that affects the poorest. The NEP’s report calls for action to address inequality between those who are quite well-off and those who are below the average, but not at the bottom. As Marmot points out, your position relative to others matters as well as your absolute position. Improvements can only happen once there are fewer gaps between all sections of society. This echoes what The Spirit Level and other studies have found: people throughout the income scale bear the costs of a more unequal society… and all stand to benefit from a more equal one.
The Marmot Review’s ‘proportionate universalism’ approach is the right one. But there needs to be a more explicit focus too on reducing the gap at top – those who have seen their incomes, wealth and health disproportionately increase over the past thirty years, but at a cost to everyone else. This additional approach fits with the immediate challenge in front of us: making sure that inequality is not further entrenched by our response to the economy’s exit from recession.
Business leaders as well as politicians should take note that inequality does not make us more economically successful. At the bottom, potential is wasted and spending power reduced. In wider terms, a more stressed workforce, the perpetual pressures for wage increases to keep up with the top earners, and higher externality costs all have a negative impact. As other countries prove, you can have growth without being so unequal.
That perhaps is the key positive message coming from the reports: public policy has a big role to play in tackling inequality. Government action – not just top-down but a whole series of approaches – can have a significant effect.
Together the reports gives a significant boost to the case that a more equal society is necessary, possible and credible. Key Marmot policy recommendations – the living wage, emphasis on early years support, a ‘life premium’ for disadvantaged children and a series of progressive taxation measures – were also put forward by Demos in pamphlets they have just published on tackling income inequality. ‘Society of Equals’ is of particular interest to Labour politicians and supporters.
The evidence, the analysis and the policy options are all stacking up in favour of decisive action. Now it is over to the political parties to reflect this in their manifestos and beyond.
Malcolm Clark is campaign director of One Society a new campaign (set up in association with The Equality Trust) to highlight the negative effects of income inequality and promote policies which would take us towards a more equal society that would benefit all. Visit www.onesociety.org.uk and follow @one_society