To tackle personal debt we need to tackle inequality first

An inequality test should be applied to all government policies to assess whether they will increase the gap between the richest and the rest.

Today’s report on personal debt from the Centre for Social Justice makes for sobering reading. With average household debt at £54,000, nearly twice the level of a decade ago, it is clear just how many are struggling in austerity Britain.

We’re told that the causes of this astonishing personal debt are people being forced to use credit to pay bills as the cost of living rises, as well as the legacy of cheap credit before the financial crash. These are clearly significant issues, but the reality is that they are part of a far wider, systemic problem. One that many seem unwilling to recognise. The gap between the rich and the rest has widened alarmingly over the past 30 years, with the UK now experiencing one of the highest levels of income inequality in the developed world. Study after study, in both the UK and internationally, has shown that as inequality rises, so does household debt.

According to research by the Joseph Rowntree Foundation, single people need to earn at least £16,850 a year before tax in 2013 for a minimum acceptable living standard. Couples with two children need to earn at least £19,400 each. But according to the ONS, just under half of people don’t get £19,400. About a third don’t get £16,850. For years, people have been told that if they work hard, they’ll get the rewards, but that simply isn’t true anymore. This is partly a result of a greater proportion of UK jobs being low paid. The proportion of jobs classed as low paid by the OECD is now among the highest of developed nations, and around 20 per cent of employees earn below the Living Wage.

Another issue is the increasing amount of insecure work such as temporary work and zero-hours contracts. Being trapped in a low-pay-no-pay cycle understandably plays havoc with budgeting. A further problem is a result of inequality driving up prices. This is most obvious in housing costs, where the average person trying to find a home finds themselves in a market where they are competing with people who are buying second homes, and with investors who are fuelling speculation-driven property inflation. In fact around 85% of new-build properties in central London and 38% of re-sales are estimated to have been purchased by overseas buyers.

Perhaps the biggest problem is also the simplest. Pay for FTSE Director’s may have increased by 14 per cent in the last year, but for the average employee pay continues to fall behind prices. We’ve now had four years of pay falling in real terms for most people. To tackle the debt crisis, the government needs to focus on reducing the UK’s high levels of income inequality. An inequality test should be applied to all government policies to assess whether they will increase the gap between the richest and the rest. Raising the level of National Minimum Wage and incentivising employers to offer jobs that pay a reliable income is a key way of tackling debt, driving demand in the economy, and reducing social security costs.

We also need a more progressive tax system, including proposals like a property speculation tax to stop the rich pricing the rest of us out of a home, but also a fiscal rebalancing away from consumption taxes like VAT, because they hit average and poor people hardest and hold back spending. Inequality is more than a driver of debt, it supresses our economic recovery and fractures our society. If the government wants to tackle debt, it needs to tackle inequality first.

Duncan Exley is director of The Equality Trust

Children play a game of football in front of a residential development in the London borough of Tower Hamlets on February 21, 2013 in London. Photograph: Getty Images.

Duncan Exley is the director of the Equality Trust

Drew Angerer/Getty Images
Show Hide image

Donald Trump wants to terminate the Environmental Protection Agency - can he?

"Epa, Epa, Eeeepaaaaa" – Grampa Simpson.

 

There have been countless jokes about US President Donald Trump’s aversion to academic work, with many comparing him to an infant. The Daily Show created a browser extension aptly named “Make Trump Tweets Eight Again” that converts the font of Potus’ tweets to crayon scrawlings. Indeed, it is absurd that – even without the childish font – one particular bill that was introduced within the first month of Trump taking office looked just as puerile. Proposed by Matt Gaetz, a Republican who had been in Congress for barely a month, “H.R. 861” was only one sentence long:

“The Environmental Protection Agency shall terminate on December 31, 2018”.

If this seems like a stunt, that is because Gaetz is unlikely to actually achieve his stated aim. Drafting such a short bill without any co-sponsors – and leaving it to a novice Congressman to present – is hardly the best strategy to ensure a bill will pass. 

Still, Republicans' distrust for environmental protections is well-known - long-running cartoon show The Simpsons even did a send up of the Epa where the agency had its own private army. So what else makes H.R. 861 implausible?

Well, the 10-word-long statement neglects to address the fact that many federal environmental laws assume the existence of or defer to the Epa. In the event that the Epa was abolished, all of these laws – from the 1946 Atomic Energy Act to the 2016 Frank R. Lautenberg Chemical Safety for the 21st Century Act – would need to be amended. Preferably, a way of doing this would be included in the bill itself.

Additionally, for the bill to be accepted in the Senate there would have to be eight Democratic senators who agreed with its premise. This is an awkward demand when not even all Republicans back Trump. The man Trum appointed to the helm of the Epa, Scott Pruitt, is particularly divisive because of his long opposition to the agency. Republican Senator Susan Collins of Maine said that she was hostile to the appointment of a man who was “so manifestly opposed to the mission of the agency” that he had sued the Epa 14 times. Polls from 2016 and 2017 suggests that most Americans would be also be opposed to the agency’s termination.

But if Trump is incapable of entirely eliminating the Epa, he has other ways of rendering it futile. In January, Potus banned the Epa and National Park Services from “providing updates on social media or to reporters”, and this Friday, Trump plans to “switch off” the government’s largest citizen-linked data site – the Epa’s Open Data Web Service. This is vital not just for storing and displaying information on climate change, but also as an accessible way of civilians viewing details of local environmental changes – such as chemical spills. Given the administration’s recent announcement of his intention to repeal existing safeguards, such as those to stabilise the climate and protect the environment, defunding this public data tool is possibly an attempt to decrease awareness of Trump’s forthcoming actions.

There was also a recent update to the webpage of the Epa's Office of Science and Technology, which saw all references to “science-based” work removed, in favour of an emphasis on “national economically and technologically achievable standards”. 

Trump’s reshuffle of the Epa's priorities puts the onus on economic activity at the expense of public health and environmental safety. Pruitt, who is also eager to #MakeAmericaGreatAgain, spoke in an interview of his desire to “exit” the 2015 Paris Climate Agreement. He was led to this conclusion because of his belief that the agreement means “contracting our economy to serve and really satisfy Europe, and China, and India”.

 

Rather than outright closure of the Epa, its influence and funding are being leached away. H.R. 861 might be a subtle version of one of Potus’ Twitter taunts – empty and outrageous – but it is by no means the only way to drastically alter the Epa’s landscape. With Pruitt as Epa Administrator, the organisation may become a caricature of itself – as in The Simpsons Movie. Let us hope that the #resistance movements started by “Rogue” Epa and National Parks social media accounts are able to stave off the vultures until there is “Hope” once more.

 

Anjuli R. K. Shere is a 2016/17 Wellcome Scholar and science intern at the New Statesman

0800 7318496