Britain: our divided nation

The income gap between rich and poor goes on getting bigger, yet we seem remarkably unconcerned

Income inequality is at a historic high in Britain, but according to new research from the Joseph Rowntree Foundation, the public is becoming pessimistic about the possibility of changing this. In a report last month on British attitudes to inequality, the social policy research charity found that although a large and enduring majority of people think the income gap between rich and poor is too large, there is little understanding about the extent of inequality in Britain and a poor grasp of how wide the gap has become in recent years.

People still express concern about unequal distribution of wealth, but are clear that they don't want to pay higher taxes. Many consider today's income inequalities unfair but equally they firmly believe that people get what they deserve. Most significantly, among complex and, the report's authors admit, contradictory results, they found a strong pessimism that poverty would fall within the next ten years.

The extent to which inequality has increased has been well documented in recent years. An Institute for Public Policy Research report in May showed that the proportion of wealth held by Britain's richest 10 per cent rose from 47 per cent in the 1990s to 54 per cent in 2004. And another report, from the Rowntree Foundation in July, noted that over the past 15 years, more households had fallen below the poverty line. In 2001, one in four households was classed as "breadline poor".

But though a large majority of Britons still find the growing income gap unacceptable, we appear less certain now than before Labour came to power in 1997. Back in 1993, 87 per cent agreed that the income gap was too large. In 2004, only 73 per cent found the (even greater) gap unacceptable.

More worrying for policymakers who believe in increasing equality as a social goal is that the public appears confused and ignorant about the extent of the problem. The Rowntree Foundation describes the general knowledge of actual distribution of wealth as "limited".

"The gap between high- and low-paid occupations is far greater than people think it should be, or would consider appropriate," the authors write. For example, asked what they think a chairman of a large national corporation earns, most would say about £125,000. A more appropriate salary, they believe, would be about £75,000. In fact, at the time of the research (2004), the real average salary of a chairman of large national corporation was £555,000. Similarly, those questioned thought an Appeal Court judge would be overpaid at £80,000 and should earn £50,000; the actual salary then was £139,900. Despite the old Tory gibe of "the politics of envy", the public tends to estimate the pay gap rather benignly. The Rowntree Foundation's respondents believed that the income of a company chairman was 12.5 times higher than that of an unskilled worker. In fact, it was more than 40 times higher.

Nor does the public hold particularly trenchant or united views on how to deal with huge pay discrepancies. Support for wealth redistribution increased between 1985 and 1995 - two years before Labour came to power - but then declined substantially from 44 per cent in 1996 to 32 per cent in 2004.

Karen Rowlingson, professor of social policy at the Uni versity of Birmingham and co-author of the Rowntree Foundation report, told the New Statesman that this may be connected to values in the UK. "These are a bit of a mix between Europe and America. [Britons] think that if you work hard you can make it, and therefore if you don't succeed it is because you haven't worked hard enough."

The report points out that even those who agree the income gap is too large may not believe that governments should intervene to force a redistribution of wealth. Younger people are the most hostile to redistribution, Rowlingson finds: "Scepticism of young people towards inequality in general and redistribution in particular is quite worrying."

She elaborates: "Taking from the rich and giving to the poor is not something that most people in the UK want. They are more willing to invest in services, like education and health."

Why this lack of support for redistribution? Certainly, the "r" word was banned from Labour vocabulary for some time, even if the reality was that, as chancellor, Gordon Brown practised redistribution by stealth to avoid even deeper inequalities. The Office for National Statistics showed in May that Brown used tax credits, for example, to boost incomes for the less well-off. The former Treasury financial secretary John Healey told the BBC recently that, as a result of such policies, families from the poorest fifth of the population were £3,000 a year better off than in 1997.

But a culture hostile to equality was created by remarks such as that of Prime Minister Tony Blair in 2005: "It's not that I don't care about the gap [between high and low incomes], so much as I don't care if there are people who earn a lot of money. They're not my concern. I do care about people who are without opportunity, disadvantaged and poor."

With such statements, the Labour Party failed to combat the public's gloomy view that inequality is inevitable.

"You cannot have equality of opportunities when people don't start from the same point. Inequality is a barrier to aspirations," says Rowlingson.

Will the former redistributive chancellor change the culture? His March Budget was short on handouts and, in response to new statistics on child poverty, he concentrated on measures to encourage parents to work. There is little parliamentary push for major tax realignments. The Liberal Democrat shadow secretary for children, schools and families, David Laws, recently said: "It is a national disgrace that Britain is the developed country where your chances in life are most dependent on your family background." But the Lib Dems have abandoned as a party their policy of a 50p rate of income tax for those with incomes above £100,000.

The Conservatives, too, who talked of redistribution in 2005, have recently been silent on the issue.

The Rowntree Foundation findings suggest that Britain risks falling into a gulf of apathy made even deeper by ignorance of the true nature of our current economic segregation.

"In Africa, the feeling you cannot do anything about things is called compassion fatigue," says Rowlingson. "Leaders have to prove action against inequality is possible."

Rich and poor

1997 "The boundaries of the welfare state are going to have to change"
Tony Blair, days before becoming prime minister

2001 "It's not a burning ambition for me to make sure that David Beckham earns less money"
Tony Blair, rejecting higher tax rates for the rich

2006 "I don't think making the top 1 per cent richest poorer makes the 10 per cent poorest richer"
David Cameron, leader of the opposition

2007 "This Budget was an opportunity to rebalance the tax system in favour of the less wealthy and the Chancellor has failed to do that"
Menzies Campbell on Gordon Brown's final Budget as chancellor

This article first appeared in the 13 August 2007 issue of the New Statesman, Road fix

Picture: David Parkin
Show Hide image

The humbling of Theresa May

The Prime Minister has lost all authority. The Tories will remove her as soon as they feel the time is right.

Being politicians of unsentimental, ruthless realism, the Conservatives did not linger in the grief stage of their collective disaster after the general election. Disbelief, too, was commendably brief.

Currently, their priority is to impose some sort of order on themselves. This is the necessary prelude to the wholesale change that most see as the next phase in their attempt at recovery, which they all know is essential to their career prospects – and believe is vital to a country whose alternative prime minister is Jeremy Corbyn.

For that reason, talk of Theresa May enduring as Prime Minister until the end of the Brexit negotiations in two years’ time is the preserve of just a few wishful thinkers. Some sort of calm is being established but the party is far from settled or united; there is a widespread conviction that it cannot be so under the present leader.

Elements of the great change have been executed, as Nick Timothy and Fiona Hill, May’s former advisers, will testify.

However, this is only beginning, as shown by the debate in the media about how long May can survive in Downing Street. There is dissatisfaction about elements of her recent reshuffle, but it is quieted because few believe that some of the more contentious appointments or reappointments will last more than a matter of months. Her colleagues are also alarmed by the meal she has made of doing what was supposed to be a straightforward deal with the DUP.

The climate in the party at the moment is one in which everything – jobs, policies and, of course, the leadership – will soon be up for grabs. Debate over “hard” and “soft” Brexits is illusory: anyone who wants to be Conservative leader will need to respect the view of the party in the country, which is that Britain must leave the single market and the customs union to regain control of trade policy and borders. That is one reason why the prospects of David Davis, the Brexit Secretary, are being talked up.

Some of May’s MPs, for all their hard-mindedness about the future, speak of feeling “poleaxed” since the general election. Even before the result changed everything, there was dismay about the bad national campaign; but that, it was felt, could be discussed in a leisurely post-mortem.

Now, instead, it has undermined faith in May’s leadership and credibility. “The social care disaster was key to our defeat,” an MP told me. “It wasn’t just that the policy damaged our core vote, it was the amateurishness of the U-turn.” A more seasoned colleague noted that “it was the first election I’ve fought where we succeeded in pissing off every section of our core vote”.

The limited ministerial reshuffle was inevitable given May’s lack of authority, and summed up her untenability beyond the short term. Most of her few important changes were deeply ill judged: notably the sacking of the skills and apprenticeships minister Robert Halfon, the MP for Harlow in Essex, and a rare Tory with a direct line to the working class; and the Brexit minister David Jones, whose job had hardly begun and whose boss, Davis, was not consulted.

George Bridges, another Brexit minister, who resigned, apparently did so because he felt May had undermined the government’s position in the negotiations so badly, by failing to win the election comprehensively, that he could not face going on.

Much has been made of how Philip Hammond, the Chancellor, was marginalised and briefed against, yet reappointed. Patrick McLoughlin, the party chairman, suffered similarly. Conservative Central Office was largely shut out from the catastrophic campaign, though no one got round to briefing against McLoughlin, who kept his head down – unheard-of conduct by a party chairman in an election.

As a political force, Central Office is for now more or less impotent. It has lost the knack of arguing the case for Conservatism. MPs are increasingly worried that their party is so introspective that it just can’t deal with the way Corbyn is spinning his defeat. “An ugly mood is growing,” one said, “because militant leftism is going unchallenged.” That cannot change until May has gone and the party machine is revived and re-inspired.

***

Nobody in the party wants a general election: but most want a leadership election, and minds are concentrated on how to achieve the latter without precipitating the former. One angry and disillusioned ex-minister told me that “if there were an obvious candidate she’d be shitting herself. But most of us have realised Boris is a wanker, DD isn’t a great communicator and is a bit up himself, Hammond has no charisma, and Amber [Rudd] has a majority of 346.”

On Monday a group of senior ex-ministers met at Westminster to discuss next steps. It was agreed that, with the Brexit talks under way, the most important thing in the interests of restoring order was securing the vote on the Queen’s Speech. Then, May having done her duty and steadied the proverbial ship, the party would manage her dignified and calm evacuation from Downing Street.

Those who agree on this do not always agree on the timing. However, few can make the leap of imagination required to see her addressing the party conference in October, unless to say “Thank you and goodnight” and to initiate a leadership contest. Many would like her out long before then. The only reason they don’t want it this side of securing the Queen’s Speech is that the result, as one put it, would be “chaos”, with a leadership contest resembling “a circular firing squad”.

That metaphor is popular among Tories these days. Others use it to describe the ­apportioning of blame after the election. As well as Timothy and Hill, Lynton Crosby has sustained severe wounds that may prevent the Tories from automatically requesting his services again.

Following the Brexit referendum and Zac Goldsmith’s nasty campaign for the London mayoralty, Crosby has acquired the habit of losing. And then there was Ben Gummer, blamed not only for the social care debacle, but also for upsetting fishermen with a vaguely couched fisheries policy. These failings are becoming ancient history – and the future, not the past, is now the urgent matter – yet some Conservatives still seethe about them despite trying to move on.

“I haven’t heard anyone say she should stay – except Damian Green,” a former minister observed, referring to the new First Secretary of State. Green was at Oxford with May and seems to have earned his job because he is one of her rare friends in high politics. He is regarded as sharing her general lack of conviction.

Older activists recall how the party, in 1974, clung loyally to Ted Heath after he lost one election, and even after he lost a second. Now, deference is over. Most Tory activists, appalled by the handling of the campaign, want change. They would, however, like a contest: annoyed at not having been consulted last time, they intend not to be left silent again.

That view is largely reflected at Westminster, though a few MPs believe a coronation wouldn’t be a problem, “as we don’t want a public examination of the entrails for weeks on end when we need to be shown to be running the country effectively”. Most MPs disagree with that, seeing where a coronation got them last time.

With the summer recess coming up, at least the public’s attention would not be on Westminster if the contest took place mostly during that time: hence the feeling that, once the Queen’s Speech is dealt with, May should announce her intention to leave, in order to have a successor in place before the conference season. It is then up to the party to design a timetable that compresses the hustings between the final two candidates into as short a time as compatible with the democratic process, to get the new leader in place swiftly.

Some letters requesting a contest are said to have reached Graham Brady, the chairman of the 1922 Committee of backbenchers. One MP told me with great authority that there were eight; another, with equal certainty, said 12. Forty-eight are needed to trigger the procedure. However, engineering such a contest is not how most Tories would like to proceed. “She has had an international humiliation,” a former cabinet minister said, “and it is transparently ghastly for her. Then came the [Grenfell Tower] fire. There is no sense our rubbing it in. I suspect she knows she has to go. We admire her for staying around and clearing up the mess in a way Cameron didn’t. But she is a stopgap.”

MPs believe, with some justification, that the last thing most voters want is another general election, so caution is paramount. None doubts that the best outcome for all concerned would be for May to leave without being pushed.

Her tin-eared response to the Grenfell disaster shocked colleagues with its amateurishness and disconnection. “I’m sure she’s very upset by Grenfell,” someone who has known her since Oxford said. “But she is incapable of showing empathy. She has no bridge to the rest of the world other than Philip.” Another, referring to the controversial remark that torpedoed Andrea Leadsom’s leadership ambitions last year, said: “You would get shot for saying it, but not having had children hasn’t helped her when it comes to relating to people. Leadsom was right.”

***

May was quicker off the mark on Monday, issuing a statement condemning the appalling attack at Finsbury Park Mosque swiftly after it occurred, and going there shortly afterwards to meet community leaders. No one could fault her assurance that Muslims must enjoy the same protection under the law as everyone else, or the speed and sincerity with which it was made. She is learning what leadership entails, but too late.

Her administration has become unlucky. This happened to John Major, but, as in his case, the bad luck is partly down to bad decisions; and the bad luck that comes out of the blue simply piles in on top of everything else. Grenfell Tower, lethal and heartbreaking for its victims and their families, was merely more bad luck for the Prime Minister because of her slow-witted response and failure – presumably because shorn of her closest advisers – to do the right thing, and to do it quickly.

But then it turned out that her new chief of staff, Gavin Barwell, had in his previous incarnation as a housing minister received a report on improving fire safety in tower blocks and done nothing about it. That is either more bad luck, or it shows May has dismal judgement in the quality of people she appoints to her close circle. Form suggests the latter.

The idea aired last weekend, that May had “ten days to prove herself”, was a minority view. For most of her colleagues it is too late. It was typical of Boris Johnson’s dwindling band of cheerleaders that they should broadcast a story supporting Davis as an “interim” leader: “interim” until Johnson’s credibility has recovered sufficiently for him to have another pop at the job he covets so much.

They also sought to create the impression that Davis is on manoeuvres, which he resolutely is not. Davis has been around long enough to know that if he wants to succeed May – and his friends believe he does – he cannot be seen to do anything to destabilise her further. It is a lesson lost on Johnson’s camp, whose tactics have damaged their man even more than he was already.

Andrew Mitchell, the former international development secretary and a close ally of Davis, told the Guardian: “. . . it is simply untrue that he is doing anything other
than focusing on his incredibly important brief and giving loyal support to the Prime Minister. Anyone suggesting otherwise is freelancing.” That summed up the contempt Davis’s camp has for Johnson, and it will last long beyond any leadership race.

There is a sense that, in the present febrile climate, whoever is the next leader must be highly experienced. Davis qualifies; so does Hammond, who before his present job was foreign secretary and defence secretary, and who has belatedly displayed a mind of his own since May was hobbled. Hugo Swire, a minister of state under Hammond in the Foreign Office, said of him: “He’s got bottom. He was very good to work for. He is an homme sérieux. I liked him very much and he would calm things down.”

But, as yet, there is no contest. Calls for calm have prevailed, not least thanks to Graham Brady’s steady stewardship of the 1922 Committee, and his success in convincing the more hot-headed of his colleagues to hold their fire. Yet MPs say the 1922 is not what it was 20 years ago: ministers have become used to taking it less seriously.

However, many MPs expect Brady, at a time of their choosing, to go to Downing Street and deliver the poison pill to Theresa May if she is slow to go. Some who know her fear she might take no notice. If she were to play it that way, her end would be unpleasant. As the old saying goes, there is the easy way, and there is the hard way. Remarkably few of her colleagues want to go the hard way but, like everything else in the Tory party at the moment, that could change.

Simon Heffer is a journalist, author and political commentator, who has worked for long stretches at the Daily Telegraph and the Daily Mail. He has written biographies of Thomas Carlyle, Ralph Vaughan Williams and Enoch Powell, and reviews and writes on politics for the New Statesman

This article first appeared in the 22 June 2017 issue of the New Statesman, The zombie PM

0800 7318496