How do the parties’ commitments to tackling inequality stack up?

The vast gap in living standards is the political issue of the moment



Inequality has become one of the most contentious topics in political and economic debate. Technological advances and financial innovation (or con-artistry) are generating vast sums of money for quite a small number of people, while at the same time, over a million food parcels were handed out in Britain last year to households who couldn’t afford to feed themselves. In the developing world, millions continue to lack such basic human requirements as drinking water and sanitation.

Whether or not we could reduce this vast gap in living standards a bit more substantially and a bit more quickly is perhaps the most important political question of the moment.

So what do the political parties propose to do tackle inequality?

Conservatives – It’s a sign of how serious the issue of inequality has become that the Conservatives are aggressively talking about how they’re the best party to reduce it. Their manifesto claims that the rich are paying more income tax and inequality is down under the Coalition and that this is something to be proud of.

The Conservatives’ signature policy in terms of raising the incomes of the lowest-paid is the increase in the income tax threshold. But most of the benefit from this change will accrue to higher earners, rather than the lowest-paid who already don’t pay much tax on their earnings. They focus on job creation as a means of tackling inequality, achieved mainly through cuts in taxes on business – a laissez faire approach that rather assumes that if government just gets out of the way, the problem will take care of itself.

Unfortunately, the same section of the manifesto includes an utterly dismal section on curbing trade union rights. Research repeatedly shows that empowering workers to secure a better deal on pay and rights at work – largely through trade unions – is one of the most effective means of cutting the gap between rich and poor.

Furthermore, only a complete fool could argue that overly-powerful trade unions were a significant problem for the UK economy, or had caused anything other than the most minor inconvenience on very rare occasions for the overwhelming majority of businesses and the UK public. Making it harder for unions to organise and reducing the means available to them to exert pressure for a better deal is the exact opposite of what a sensible government should be doing.

Similarly, for anyone concerned about inequality, the Tories’ pledge to raise the inheritance tax threshold is also troubling. This is a tax cut for the very rich on income they haven’t worked for – the very antithesis of fairness.

Labour – Rhetorically at least, Labour’s manifesto is much more forceful on the issue of inequality, with frequent references to how the economy isn’t working for ordinary people and how those at the top need to play by the same rules.

Unlike the Conservatives or the Lib Dems, Labour also recognise that a more equal distribution of wealth probably does necessitate higher taxes on the rich. Data shows that the richest one per cent of the population have a lower share of total incomes in countries with a higher top rate of tax. Importantly, the International Monetary Fund has found that redistribution doesn’t negatively impact on economic growth, though unfortunately for Labour, it probably does impact on the Maserati-driving, swan-eating habits of certain influential business leaders and newspaper-owners, meaning that other modest redistributive measures in the manifesto, such as the abolition of non-dom status or the mansion tax will continue to prove contentious.

Labour also pledge to raise the minimum wage, abandon the prohibitive costs that the Tories have applied to employment tribunals and introduce tax rebates for Living Wage employers, but perhaps their most interesting policy for tackling inequality involves giving worker’s representatives a seat on the ‘remuneration committees’ that set executive pay at listed companies.

This will mean that when Britain’s biggest corporations want to award their CEO with a seven or eight figure pay package, they’ll need sign-off from their employees. This represents a real challenge to the rancid culture of huge bonuses for those at the top and pay freezes for everybody else.

Lib Dems – Like Labour, the Lib Dems propose a new tax on high-value properties. Like the Tories, they are proposing a further hike in the income tax threshold. They also identify more technical points around closing capital gains tax loopholes and removing rights for rich pensioners to free TV licenses and the winter fuel payments.

On top pay, the Lib Dems have a slightly confused version of Labour’s policy. On page 47 they promise merely to hold a consultation on whether companies should consult employees on executive pay, while on page 137 they commit to worker representation on remuneration committees. This probably needs some clarification as the two points appear to contradict each other.

The Lib Dems would also require companies to disclose the ratio between the highest paid individual in an organisation and the median level of pay. This is a potentially useful way of raising awareness of the scale of pay gaps in the UK –It is now commonplace for CEOs to be paid hundreds of times their average worker and the Lib Dems are right that companies who think this is justifiable should be forced to put the information in the public domain and defend it.

Finally, the manifesto’s section on education emphasises ‘unfair divisions in our society’ and ‘the gaps between rich and poor’. This is a laudable focus for education policy, but does also reflect a worrying trend for solutions of inequality to take the form of vague promises of ‘better education.’

High quality schools, teaching and childcare are critical to a fair society, but so is power – and Britain ranks 27th out of 28 European countries in terms of worker representation in company decision-making, giving UK workers less opportunity to improve their pay and working conditions. The failure of the Liberal Democrats to boost democracy in the workplace, where people spend half their waking life, feels like a bit of a missed opportunity.

Other parties – Polling suggests that Green Party supporters are particularly exercised about poverty and inequality, and the issue is more prominent here than in any other manifesto. Commitments include a Wealth Tax on the top one per cent, Robin Hood Tax on financial speculation and 60 per cent rate of income tax on the highest earners. Proceeds would be invested in public services and in energy efficiency and renewable energy programmes.

UKIP offer a programme based on tax cuts that would largely benefit high earners, including the complete abolition of inheritance tax. This would surely exacerbate inequality even more starkly than the Conservative plans raise the threshold.

Both the SNP and Plaid Cymru oppose social security cuts and support higher taxes for the rich and worker representation on company boards, a sign that in Scotland and Wales, inequality is likely to be an even more important election issue than in England.

Luke Hildyard is a contributing editor at Left Foot Forward. Follow him on Twitter

10 Responses to “How do the parties’ commitments to tackling inequality stack up?”

  1. littleoddsandpieces




    Just the same as Tories, Lib Dems, The Greens and UKIP, who all offer an impoverished penniless starving old age to many low waged, with never any chance of any other pension provision than the state pension, or as low as £30 per week works pensions.

    The average low incomed works pension is only £400 a month. Pensioners to survive need on average about £10,000 a year not to fall into food and fuel poverty.

    Huge numbers of men and women will get a state pension as low as £38 after 45 years work or even

    NIL STATE PENSION FOR LIFE from next year.

    See why, at end of my petition, in my WHY IS THIS IMPORTANT section, at:



    – Reverse Rise in Retirement Age

    – Pay Decent State Pension

    – £10 per hour Living Wage

    – Ban sanctions and stop benefit cuts and workfare


  2. littleoddsandpieces




    – Reverse Rise in Retirement Age

    – Pay Decent State Pension

    – £10 per hour Living Wage

    – Ban sanctions and stop benefit cuts and workfare

  3. littleoddsandpieces


    People say just vote Labour and not the National Health Action party.

    But Labour has not stopped one hospital closure, not one privatisation of the NHS, nor any of the council cut backs effecting home disabled or elder care.

    The National Health Action party is only running in England, because the SNP in Scotland and Plaid Cymru in Wales has stopped any privatisation and cut backs to the extreme levels in England, where the bulk of Labour MPs are.

    I voted Labour all my life. But my Labour is now inside TUSC, sacked out of the Labour party, with members who joined the Labour party at 16 and now my age.

  4. Leon Wolfeson

    “inequality is down under the Coalition and that this is something to be proud of”

    Let’s remember why it’s down – wages have fallen, but at the low the there’s a block on further falls called the “minimum wage”. Wages have compressed down towards it, and “inequality is down” therefore.

    Oh dear, yes. I also note their election leaflet saying “higher rate tax threshold 50k” as it’s headline here.

    Labour have also set out a pretty low CAP on how much they’ll raise the minimum wage, let’s not forget that. They do get credit from me for promising to abolish the fees for tribunals, though.

    LibDems? Expensive means testing for richer pensioners rather than say adjusting tax rates to reclaim benefits. Now that’s over-complex, as the entire mess surrounding higher rate taxpayers and child benefit shows. Also, that “ratio” is not going to be useful afaik – if anything, it encourages outsourcing i.e. cleaners.

  5. sarntcrip

    nobody is talking about the tory gaging law designed to curb both free speech and opposition to their unequal policies

  6. sarntcrip

    1. we now have more people on minimum wage zero hour contracts than at anytime in our history we also have more billionaires attracted by unequal 40% tax cuts for the very wealthy way more generous than the trumpeted uplift of tax thresholds for those with least the gap between the super rich and the rest has never been as huge inequality ded under the coalition

  7. Leon Wolfeson

    For obvious reasons, that’s political and brings you into the scope of the law.

  8. Leon Wolfeson

    To make one point there more clearly – there’s been a pretty fixed % of workers on the minimum wage since it was introduced. Until 2011, when it started rising, sharply. Due to Tory policies.

    (There’s been “more” quite a few times, due to population growth, % workers is the measure that matters most)

  9. Faerieson

    I have ‘supported’ the Labour Party for most of my adult life. Their stated values have always ticked more of the egalitarian boxes. However, a consolidated sense of betrayal, has found me now voting entirely against, rather than for any current lot. As you state, looking for a less conforming party, now seems the best of many poor options.

  10. Mike Stallard

    Luke, are you thinking of us nicking off the people who are richer than us?
    Or are you thinking about people who are considerably poorer than us nicking our goodies?

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