The black marks on the government's inequality record

Half way through the parliamentary term, how is the government doing? Not too well, writes One Society's Larissa Hansford.

At the half way point of the Coalition Government's term, debate rages over top pay, low pay and the persistently vast gulf between the two.

The trend to an expanding pay gulf is one that right and left alike have denounced. Front page headlines express outrage over the £1.32m payout to theformer director-general of the BBC, influential multinational board members call for a pay cap on corporate bonuses, and studies show that pay for top bosses rose an average of 10 per cent in 2011. Meanwhile £5m people are living at below living wage pay, with both Boris Johnson and Ed Milliband, backing an expansion of the scheme.

In the midst of so many calls for a reduction in the UK pay gulf, how have the Government performed on these issues? A new report by One Society, The Coalition Government and Income Inequality: The half term report, indicates that their record is wanting. It finds not only that inequality has not been reduced, but concludes that Coalition polices are actually likely to produce an increasing gap between the richest and the rest, at the same time as average incomes fail to keep up with the rising cost of living.

A One Society report on fair pay in Local Authorities showed how much progress has been made in the public sector over the last few years in addressing its inequalities. However, the private sector points out the report, where pay ratios are much more extreme, has largely escaped notice. The much reported "shareholder spring" led to just six substantial protest votes over extortionate pay at the top. BIS (The Department for Business, Innovation and Skills) proposals to increase shareholder power have failed to incorporate important stakeholders such as company employees. Proposals on binding pay votes have been watered down and there has been no significant action on issues such cash bonuses and simplification of pay packages.

At the lower end of the payscale, the two year public sector pay freeze and the upcoming two year below-inflation pay rise have put pressure on already low public sector salaries. Not only does this have a direct impact on inequality, but along with increasing costs of living, has serious implications for living standards. Increased costs of childcare, transport and cuts to tax credits have all played their part in this.

When they stood in the general election, inequality was a major concern for both coalition parties. The Conservative manifesto called for a society in which “wealth and opportunity must be more fairly distributed”. The Liberal Democrats meanwhile decried the fact that “Britain [is] one of the most unequal societies in the developed world, where ordinary people struggle to make ends meet.”

With 74 per cent of people believing that income inequality is too high and even CEOs beginning to recognise they are probably overpaid, it is clearly still a highly relevant issue to the electorate. On top of this, No. 10's favourite think tank recently warned that the Conservative Party are still seen as the party of the rich.

"Excessive" levels of income inequality are not only unpopular, but, as the One Society's report sets out, they are also inefficient. Growing evidence shows that large pay differentials stunt economic growth and cause instability. It also highlights the harmful effect that inequality has on our communities, our health and our environment.

For all these reasons, argues the report, political parties who want to be taken seriously in the next general election will have to outline a plan of action to tackle the UK's unacceptable levels of income inequality. Left and right alike must sit up and take notice of the harmful effect of extreme wealth disparities, and the significant impact that government policy could have in addressing them.

Marking the scorecard. Photograph: Getty Images

Larissa Hansford is a Campaign Assistant at One Society.

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Westminster terror attack: What we know so far

The attack, which left a police officer and bystanders dead, was an attack on democracy. 

We had just wrapped up recording this week's podcast and I was on my way back to Westminster when it happened: the first terrorist attack on Parliament since the killing of Airey Neave in 1979. You can read an account of the day here.

Here's what we know so far:

  • Four people, including the attacker, have died following a terrorist attack at Westminster. Keith Palmer, a police officer, was killed defending Parliament as the attacker attempted to rush the gates.
  • 29 people are in hospital, seven in critical condition.
  • Three French high school students are among those who were injured in the attack.
  • The attacker, who was known to the security services, has been named as Khalid Masood, a 52-year-old British born man from Birmingham, is believed to have been a lone wolf though he was inspired by international terrorist attacks. 

The proximity of so many members of the press - including George, who has written up his experience here - meant that it was very probably the most well-documented terrorist attack in British history. But it wasn't an attack on the press, though I'd be lying to you if I said I wasn't thinking about what might have happened if we had finished recording a little earlier.

It was an attack on our politicians and our Parliament and what it represents: of democracy and, ultimately, the rights of all people to self-determination and self-government. It's a reminder too of the risk that everyone who enters politics take and how lucky we are to have them.

It was also a reminder of something I take for granted every day: that if an attack happens, I get to run away from it while the police run towards it. One of their number made the ultimate sacrifice yesterday and many more police and paramedics had to walk towards the scene at a time when they didn't know if there was another attacker out there.

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.