Boris's championing of inequality is a recipe for destroying social mobility

The mayor presented social mobility as compensation for inequality but it's the gap between the rich and poor that erodes opportunity.

We can at least commend Boris Johnson for his candour. Unlike those in his party who hide behind euphemisms and platitudes, the mayor presented rampant inequality as both inevitable and desirable in his Margaret Thatcher lecture last night. Differences in IQ, the efficient operation of the free market and the need for economic incentives all meant it was "futile" for politicians to even try to narrow the gulf between the rich and the rest. "Whatever you may think of the value of IQ tests it is surely relevant to a conversation about equality that as many as 16% of our species have an IQ below 85 while about 2% have an IQ above 130," he said, oblivious to the fact that this gap isn't the cause of inequality but the result of it

But while delivering this bleakly Hobbesian message, he attempted to sweeten the pill by echoing John Major's lamentation of stagnant social mobility and calling for a dramatic expansion of opportunity. In one passage he remarked:

I worry that there are too many cornflakes who aren’t being given a good enough chance to rustle and hustle their way to the top. We gave the packet a good shake in the 1960s; and Mrs Thatcher gave it another good shake in the 1980s with the sale of the council houses. Since then there has been a lot of evidence of a decline in social mobility, as Sir John Major has trenchantly pointed out.

And in another:

It seems to me that though it would be wrong to persecute the rich, and madness to try and stifle wealth creation, and futile to stamp out inequality, we should only tolerate this wealth gap on two conditions. One, that we help those who genuinely cannot compete; and two, that we provide opportunity for those who can

But his presentation of social mobility as a form of compensation for inequality was almost comically inappropriate. As anyone with the most cursory grasp of the subject knows, reduced opportunity is the inevitable result of greater inequality: it's harder to climb the ladder when the rungs are further apart. As the empirical masterpiece The Spirit Level showed (see graph), it is the most unequal countries, such as the UK and the US, that have the lowest levels of social mobility, while the most equal, such as Sweden, Canada and Japan, that have the highest. In the case of Britain, it was after Boris's heroine took office, and the gap between the rich and the poor became a chasm (the gini coefficient rose from 12.9 in 1978 to 22.2 in 1990), that social mobility began to stagnate. 

Confronted by this unavoidable truth, Boris offered nothing resembling a solution. In his recent report on the subject for the coalition, Alan Milburn wisely noted that "deep-rooted inequality and flatlining mobility have been decades in the making" and that "in most developed countries there has been a declining share of economic growth going to labour (and a higher share to capital) at the same time as there has been growing wage inequality. In the UK, the share of national income going to wages of workers in the bottom half of the earnings distribution decreased by a quarter between 1979 and 2009."

But Boris had nothing say to about repairing the broken link between growth and earnings. Instead, he called for the return of academic selection under the guise of "academic competition" (perpetuating the myth of grammar schools as engines of social mobility) and sought to reassure us that those benefiting most from inequality were already paying their fair share. He told his audience: "Today, when taxes have been cut substantially, the top one per cent contributes almost 30 per cent of income tax [one might note that he is among them]; and indeed the top 0.1 per cent - just 29,000 people - contribute fully 14 per cent of all taxation."

Yet this statistic tells us less about what has happened to the tax system than it does about what has happened to the income system. Over the period in question, the earnings of the rich have soared to hitherto unimaginable levels. As a recent OECD study showed, the share of income taken by the top 1% of UK earners increased from 7.1% in 1970 to 14.3% in 2005, while the top 0.1% took 5%. Quite simply, the rich are paying more because they're earning more. Is this really cause for us to "fete them and decorate them and inaugurate a new class of tax hero"? If 11 million low and middle earners receive the pay rise they have been denied since 2003, they'll pay more tax too. In fact, compared to the rich, they're already paying the lion's share. As the ONS recently found, owing to VAT and other regressive levies, the least well-off households pay 36.6% of their income in tax, while the wealthiest pay 35.5%. Had the coalition taken Boris's advice and cut the top rate of income tax to 40p (with a 30p rate down the line) , that gap would be even wider. 

A more progressive tax system would narrow the gap between rich and poor and tilt the odds in favour of social mobility but here, as elsewhere, the policies promoted by Boris aren't the solution to a society in which birth determines destiny, they're the cause of it. 

Boris Johnson declared in his Margaret Thatcher lecture that it was "futile to stamp out inequality". Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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Forget planning for no deal. The government isn't really planning for Brexit at all

The British government is simply not in a position to handle life after the EU.

No deal is better than a bad deal? That phrase has essentially vanished from Theresa May’s lips since the loss of her parliamentary majority in June, but it lives on in the minds of her boosters in the commentariat and the most committed parts of the Brexit press. In fact, they have a new meme: criticising the civil service and ministers who backed a Remain vote for “not preparing” for a no deal Brexit.

Leaving without a deal would mean, among other things, dropping out of the Open Skies agreement which allows British aeroplanes to fly to the United States and European Union. It would lead very quickly to food shortages and also mean that radioactive isotopes, used among other things for cancer treatment, wouldn’t be able to cross into the UK anymore. “Planning for no deal” actually means “making a deal”.  (Where the Brexit elite may have a point is that the consequences of no deal are sufficiently disruptive on both sides that the British government shouldn’t  worry too much about the two-year time frame set out in Article 50, as both sides have too big an incentive to always agree to extra time. I don’t think this is likely for political reasons but there is a good economic case for it.)

For the most part, you can’t really plan for no deal. There are however some things the government could prepare for. They could, for instance, start hiring additional staff for customs checks and investing in a bigger IT system to be able to handle the increased volume of work that would need to take place at the British border. It would need to begin issuing compulsory purchases to build new customs posts at ports, particularly along the 300-mile stretch of the Irish border – where Northern Ireland, outside the European Union, would immediately have a hard border with the Republic of Ireland, which would remain inside the bloc. But as Newsnight’s Christopher Cook details, the government is doing none of these things.

Now, in a way, you might say that this is a good decision on the government’s part. Frankly, these measures would only be about as useful as doing your seatbelt up before driving off the Grand Canyon. Buying up land and properties along the Irish border has the potential to cause political headaches that neither the British nor Irish governments need. However, as Cook notes, much of the government’s negotiating strategy seems to be based around convincing the EU27 that the United Kingdom might actually walk away without a deal, so not making even these inadequate plans makes a mockery of their own strategy. 

But the frothing about preparing for “no deal” ignores a far bigger problem: the government isn’t really preparing for any deal, and certainly not the one envisaged in May’s Lancaster House speech, where she set out the terms of Britain’s Brexit negotiations, or in her letter to the EU27 triggering Article 50. Just to reiterate: the government’s proposal is that the United Kingdom will leave both the single market and the customs union. Its regulations will no longer be set or enforced by the European Court of Justice or related bodies.

That means that, when Britain leaves the EU, it will need, at a minimum: to beef up the number of staff, the quality of its computer systems and the amount of physical space given over to customs checks and other assorted border work. It will need to hire its own food and standards inspectors to travel the globe checking the quality of products exported to the United Kingdom. It will need to increase the size of its own regulatory bodies.

The Foreign Office is doing some good and important work on preparing Britain’s re-entry into the World Trade Organisation as a nation with its own set of tariffs. But across the government, the level of preparation is simply not where it should be.

And all that’s assuming that May gets exactly what she wants. It’s not that the government isn’t preparing for no deal, or isn’t preparing for a bad deal. It can’t even be said to be preparing for what it believes is a great deal. 

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