How Labour can embrace a new approach to tackling inequality

High rates of in-work poverty combined with falling support for state safety nets has resulted in a complex equality challenge for Labour. However, it can win public backing for a new approach to collectivism.

Inequalityj

Penny Young is chief executive of NatCen Social Research

The British public is bothered about inequality. NatCen’s British Social Attitudes survey finds that in 2012, pretty much everybody (eight in ten) thought the income gap too large.

And it is not surprising that so many feel like this, given the levels of poverty and the extent of income inequality in the UK. For example, in 2011-12 4.7 million households in the UK were below the Joseph Rowntree Foundation’s Minimum Income Standard; the income that people need in order to reach a minimum socially acceptable standard of living.

We also know that most people believe the government has a responsibility to do something about inequality and poverty. Two thirds (69 per cent) think that it is the job of government to reduce income differences between the rich and the poor; 62 per cent believe government should find a job for those who want one and a majority (59 per cent) say that it is government’s role to provide for the unemployed.

Having said this, on the third point there has been major change over the last few decades. 81 per cent of people thought the government should provide for the unemployed in 1985, which tells us something about changing attitudes to the way Britain should support people in need. And we also know that the public attributes a lot of importance to hard work and aspiration as factors in getting on in life.

Jobs that work

So what can government do? The government is keen to tell us about the number of new jobs being created; the prime minister hailed employment hitting 30 million for the first time as evidence that ‘the plan is working’.

But we should also ask if the types of jobs being created are the right ones. There are millions of people in work who do not earn enough to free them from poverty. Many of the working poor are in low paid, insecure, jobs and reliant on in work benefits. In fact, recent NatCen research showed that the most common family structure for households in poverty in the UK is couples with a single male breadwinner.

Less well known is the fact that low quality jobs can also have a negative impact on wellbeing. Creating very low skilled, very low paid jobs may give people a source of income, but evidence from the UK’s largest survey of mental health, the Adult Psychiatric Morbidity survey, shows that the lowest paid jobs also have a correlation with ‘common mental disorders’, such as depression and anxiety.

While this problem is not unique to Britain, we do seem to fare much worse than some of our near neighbours on job satisfaction and work life balance. Findings from the European Social Survey show that the UK does slightly better than Poland and Hungary when it comes to job satisfaction and work life balance, but worse than most of the rest of Europe, including Germany, France, Belgium and much lower than the Nordic countries.

So while a higher minimum wage or living wage might help support the lowest paid, it’s also the case that any policy should also consider the quality of jobs.

Falling support for a safety net

Social security was created, to quote the Beveridge report, as ‘an attack upon Want’. However, Beveridge also demanded that behind social security stood the principle of offering security in exchange for ‘for service and contribution’. And it seems to be in this mutual arrangement that the British public have lost faith; they no longer believe that recipients of state benefits are doing their fair share.

Attitudes are particularly harsh towards the unemployed. Eight in ten wrongly believe that large numbers of people falsely claim benefits (this stood at 67 per cent in 1987) and more than half (54 per cent) think that most unemployed people could find a job if they really wanted one – even in an age of austerity.

Recently there have been signs of a slight softening of attitudes that could be a reaction to recent public spending cuts, but there is no appetite for the extra spending on social security that might pull some people out of poverty; only 22 per cent of the public agree that benefits are too low. The coalition has recognised that it can make cuts to welfare and be consonant with the public’s view.

The challenge: a new approach to collectivism

So any government faces a real problem in trying to reduce inequality.  Low paid jobs are not necessarily better than being unemployed in terms of wellbeing, and they do not solve the problem of a high benefits bill, which the public wants to reduce.

So what are the alternatives?

Last year’s British Social Attitudes report had something of a clue. IPPR’s Nick Pearce examined the hypothesis that we are becoming more individualistic and expecting people to stand on their own two feet. It is true that people have become harsher towards those on unemployment benefits, but he also found enduring support for some collectivist principles; the importance of the state pension and the value of the NHS, for example.

Our challenge to policy makers and political activists in the run up to the election is as follows: if the founder of the NHS, Aneurin Bevan, was alive now and asked to solve the problem of reducing income inequality rather than solving health problems, what would be his modern day answer?

And for those on the left in particular, who believe passionately in the power of the state to improve lives, is it possible to look at new ways of directing state spending? Might you find public support for investment in skills and jobs if everyone contributed and everyone could see a tangible benefit for them personally, especially if public money was carefully targeted towards building the right skills and creating properly paid jobs?

The Fabian pamphlet ‘How Labour Can Change Britain’, which includes this essay, is out now

One Response to “How Labour can embrace a new approach to tackling inequality”

  1. GO

    Two points:
    Firstly, if you focus *solely* on boosting the incomes of people towards the bottom of the income distribution, you can’t expect any reduction in the gap between those people and the people towards the top. This is one of the lessons of the New Labour era; for all their success in tackling poverty (e.g. through tax credits), they didn’t reduce inequality because they didn’t do anything to hold down the incomes of high earners.
    Secondly, it’s not just the gap between the bottom and the top that matters; it’s also the gap between the bottom and the middle (since this is what relative poverty is all about). It’s an uncomfortable truth that measures taken to boost the income of low-income workers (e.g. a Living Wage) will tend to increase this gap, since those who are (more) reliant on pensions, benefits etc. will be left behind. So the issue of increasing welfare spending cannot be dodged.

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