Away from the rarefied atmosphere of Davos, the reality of tackling inequality is not at all palatable to elements of the UK's business community.
Chris Johnes is director of the UK Poverty Programme at Oxfam GB
This year’s World Economic Forum meeting, usually known as Davos, has on the face of it accepted that inequality is a growing global problem. An official paper for the Forum outlines a number of serious risks to the global economy from entrenched extreme inequality.
For Oxfam, who published our own report on rocketing inequality and its political consequences just before the summit, this was very welcome news: the global political and financial elite recognising that extreme inequality threatens their interests and the well-being of the rest of the planet.
However, as some sceptics warn, translating warm words into action may be another thing, as the super rich are forced to confront what action on inequality might really mean.
This has been illustrated here in the UK as soon as Davos ended, with a backlash against a political proposal from the shadow chancellor Ed Balls to bring in a slightly more progressive tax policy, namely reintroducing the 50 per cent tax rate on earnings over £150,000 a year. Away from the rarefied atmosphere of Davos, the reality of tackling inequality is not at all palatable to elements of the UK’s business community.
And of course in terms of tackling inequality these are very modest proposals: at most the main impact will be to shift a little of the burden of paying for the deficit away from those on the lowest incomes. Marginal tax rate changes will make only a small difference to the major inequalities in income and opportunities that characterise life in the UK today.
The reaction does, however, graphically underline Oxfam’s point about how wealth has translated into political power and how difficult it is for politicians to take decisions that even marginally challenge the interests of the very wealthy.
However it’s frankly difficult to see how the current situation in the UK is remotely socially sustainable with millions stuck on stagnant low wages whilst prices rise and the housing market, especially in the south east, spirals out of reach of so many.
An economy depending on large amounts of low wage labour that can’t afford to live is in trouble, especially with few prospects of improvement for so many.
Reflecting on this, it’s clear that the conclusions reached at Davos are highly relevant for the UK. Let’s hope it doesn’t take us too long to recognise it.
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