Opinion: Support the Equality Pledge

For many years the researchers Richard Wilkinson and Kate Pickett have been investigating the relationship between wealth, inequality, and measurements of a good society. The measurements of a good society would be low levels of crime, low levels of teenage pregnancy, good health in terms of long life expectancy, low levels of obesity – and many other measures besides.

During their research they have published books on this, and finally they published the book “The Spirit Level“, which has had the biggest impact of all.

There are many countries that are poor, and clearly they need economic growth in order to ensure that their populations can satisify their basic needs in life.

There are some countries, including the UK, which are rich enough to acheive that. When you compare these countries that have reached that level of prosperity, then when you plot a graph with wealth on one axis and quality of life measurements on the other, there is no obvious relationship.

From a certain level, a society does not become better simply because it becomes richer.

Yet when you plot the quality of life measurements against the levels of inequality, the correlations are remarkebly strong. And this is not just between countries, it is within them too. Nick Clegg often remarks how life expectancy alters from the prosperous suburbs of Sheffield to that of the inner city. The relationship is more likely to be to do with the levels of inequality rather than the quality of service from the NHS.

In The Spirit Level, the comparisons are made between the states of the US and the same trends are found there as well. Vermount and New Hampshire are the best places to live there, being more equal and having the best statistics for quality of life, whilst Alabama, Mississippi, West Virginia and Louisana are the worst for the opposite reasons.

Of the 20 countries compared, Portugal, the US and the UK have the worst statistics of all, whilst the best are from Japan, Sweden, Belgium, the Netherlands and Denmark.

The book is worth buying and goes into far more detail than I possibly can here.

The point of course is that relative inequality matters. If you consider that a Liberal society is one where more is spent on colleges and less on prisons, then less inequality will help bring that about.

As far as the UK is concerned, levels of inequality increased dramatically during the premiership of Margaret Thatcher, and have not improved since, even under Labour.

Since the publication of the Spirit Level, Richard Wilkinson and Kate Pickett have set up the Equality Trust pressure group which has been campaigning hard to put their case. Indeed when I invited them to speak at a Hackney Lib Dem event, they were happy to do so, despite being based near York. For the general election they are encouraging everyone in general, and candidates for elections (both general and local) in particular to sign their Equality Pledge. You can see the signatories here.

Many Greens, Labour and Lib Dems – including Vince Cable – have already signed it. Even some Conservatives and UKIP candidates have supported it.

But this is NOT a soft option pledge. It means we are committing ourselves to reversing a 30 year trend that up until now has not been taken seriously by the governing parties.

There were some ideologues that influenced the Thatcher government in the 1980s who argued that wealth creation is more important than reducing inequality, and that inequality did not matter as long as the poorest did not get any poorer. This was known as the trickle down effect. However the popularity of the trickle down effect was aided by a media who sought to demonise benefit claimants – the poorest members of society – so that they got even poorer as a result. Even today it is often tempting for politicians to attack “dependency” in order to win votes and seek to make life even more miserable for these people.

For Liberal Democrats our tax politicies aim to redistribute wealth by taxing the poor less and the rich more. The emphasis on mutualism in which there is more industrial democracy ought to also improve the lives of working people and reduce income disparity. Redistribution of wealth may well have other economic benefits; those with low wealth would spend more if they had more, whilst those with high wealth would keep a large part of that wealth rather than spend it.

Historically the question of equality has been a fundamental one in politics, and always high on the liberal agenda, notably the people’s budget of 1909, the Keynsian economics that rescued the British economy from the 1930s depression and the 1942 report Social Insurance and Allied Services by William Beveridge. Liberals should be making the case for equality as strongly today as they have done before during these historical periods where we were proved to be right.

I am pleased to see that many Liberal Democrat Voice readers have already signed the pledge, and I would urge you to do so as well.

Geoffrey Payne is the events organiser for Hackney Lib Dems

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8 Comments

  • Liberal Eye 8th Apr '10 - 12:55pm

    That extreme wealth inequality leads to all sorts of social problems seems to me a reasonable proposition but is redistributing wealth the best way to tackle these problems? On the face of it nothing could be more obvious and yet Labour’s best efforts (not very good I grant you) have failed. I think the real underlying problem is one of POWER inequality that we are overlooking. Fix that and the wealth inequalities will reduce very fast.

    For example the reason that CEOs can pay themselves excessive amounts is that shareholders and employees (whether unionised or not) have too little power. In such circumstances it is not difficult for a CEO to award themselves obscene amounts by gutting the company. This may be by ‘saving’ money on the R&D budget or trashing pension benefits as per Kraft/Cadbury. Kraft boss Irene Rosenfeld was awarded a 41% increase bringing her 2009 pay to $29 million for her “exceptional role in the Cadbury transaction” and her “commitment to fiscal discipline”. Presumably that means failing to do due diligence! She will be long in comfortable retirement before the consequences really bite back.

    For another example consider ‘big retail’. It now operates in a regulatory framework that permits, and in practice encourages, deceitful pricing verging on the outright fraudulent. Supermarket customers are routinely shaken down and finish up paying up to 33% more than they ought in the UK. Needless to say this is a cost burden that falls disproportionately on the poor. Meanwhile suppliers are crushed by the oligopsony power of the big players. Hence big retail is a powerful motor of wealth inequality but the reason that this is so springs from underlying power inequalities in both the supplier-facing and customer-facing markets in which they operate.

  • David Allen 8th Apr '10 - 5:13pm

    Liberal Eye makes a key point. Labour have failed to reduce inequality because all their well-meaning activists who would have liked to do so, do not have the power. Their government has been captured by the rich.

    Charles Kennedy famously said that Britain does not need three conservative parties. Sadly, there are people around who take the opposite view, that it is vital the Britain has three conservative parties, because otherwise the Lib Dems might get somewhere, offer a real alternative, and change things!

  • It must be because there’s an election on .. I’m agreeing with David Allen again! 😯

    If we tackle inequalities of power, then inequalities of wealth will look after themselves.

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