Show Hide image UK 10 June 2014 Sadiq Khan's speech on inequality: full text Inequality is the single biggest threat to our economy, our society and to the wellbeing of the British people today. Sign up for our weekly email * Print HTML Thank you conference for inviting me to speak to you today. I first joined a trade union more than twenty years ago. It may shock you given my youthful good looks, but I've now been a member of this movement for almost half my life. Trade unionism - the power of working people acting together to deliver a fairer society - is at the very heart of my beliefs. And it fills me with hope to stand here today and see the trade union movement is very much alive and well. --- I want to talk to you today about an issue that is the single biggest threat to our economy, our society and to the wellbeing of the British people today. An issue that is the biggest dividing line in British politics. And a problem that affects all of you and all your members. I want to talk to you about the growing disconnect between the wealth of our nation and the finances of working people, and the rise in inequality in Britain which it causes. A rise in Inequality of income and wealth, but also in the distribution of power. - It's important to start by explaining why this matters so much. We see every day that our economy has stopped working for ordinary people, with the benefits going to those at the top and the rest being left behind. But we must take the time to reflect on exactly why this growing inequality matters if we are to convince Britain that it's the defining issue of our age. There are four reasons why inequality matters: Firstly, it causes the cost-of-living crisis which so many people are facing . Secondly, inequality is bad for economic growth. Thirdly, inequality is the most important factor in determining the happiness of society and the cohesiveness of our communities. And finally, a belief in equality and basic moral fairness is a foundation of British society. I want to explore these reasons in a little more depth. - Firstly – the cost-of-living crisis. Every week, Government ministers hit the airwaves, claiming the latest set of economic statistics show that our economy is fixed. And there is no doubt that after years of flat-lining, the economy is finally growing. But this is just not reflected in day-to-day life for most people. It makes them furious to hear the Government claim the crisis is over, when they and their friends and family are all still suffering. When their wages are still frozen. When their job is no more secure. And when earnings are still barely keeping up with outgoings. The vital link between the wealth of the country as a whole and people’s family finances has been broken. Quite frankly – our economy is no longer working for most people. The benefits of growth increasingly go only to those at the top. Meaning that despite growth in the economy, the cost-of living crisis continues to deepen for most people. Ed Miliband summed it up brilliantly at our conference last year when he said: “a rising tide used to lift all boats, now it only seems to lift the yachts.” --- Secondly, inequality actually limits the potential for growth in our economy. And you don’t have to take my word for it. The International Monetary Fund said exactly this in a ground-breaking report in February. The report said: “Countries with high levels of inequality suffer lower growth than nations that distribute incomes more evenly.” It went on to say: “Inequality can also make growth more volatile and create the unstable conditions for a sudden slowdown in growth.” In the murky world of economics – it doesn’t get more definitive than that. And if the IMF isn’t enough to convince you you should read a speech delivered last week by Mark Carney. He is the Governor of that famous left-wing institution – the Bank of England. In a brilliant speech about the dangers of inequality he summed it up succinctly: “Relative equality is good for growth” -- Thirdly – inequality damages the happiness and wellbeing of everyone in our society. And threatens the very fabric of our communities. How many of you have heard of a book called the Spirit Level? Put your hands up if you have heard of it. It is the book that has had the biggest impact on my views in recent years. The authors comprehensively proved that inequality is bad for the health, happiness and wellbeing of everyone in society. From those at the very top – to those at the very bottom. It's worth pausing on that. Inequality is bad for the very wealthy - those who benefit most - just as it is bad for those at the bottom. They proved that inequality causes shorter, unhealthier and unhappier lives. It increases the rate of teenage pregnancy, violence, obesity, imprisonment and addiction. And most importantly, it destroys relationships between individuals born in the same society but into different classes. --- The final reason that we must fight inequality is because it is rejected by the British people. It offends our most basic sense of fairness and traditional British values. In the most recent polling, eighty percent of British people said the income gap in this country is too high. Eighty percent. And even more - eighty seven percent - think that growing inequality is unfair. The British people are well and truly fed up with inequality. --- There is no doubt that Britain is becoming a less equal country. And the speed at which inequality is growing is increasing. Over the last year alone, the share of post-tax income of the top one per cent of taxpayers – that’s just 300,000 people – has risen from 8.2 per cent to 9.8 per cent. Yet at the same time, the bottom 90 per cent – a total of 27 million hard working Britons – have seen their share of income fall from 71.3 per cent to 70.4 per cent And it is a problem that is getting worse under the Tories and the Liberal Democrats. The increase in wealth of the richest 100 people in Britain in the last year was 40.1 billion pounds. That’s enough to pay a year’s rent for nearly half of all renting households. Or to pay the energy bill for all 26.4 million UK households for over a year. It is a stain on both their parties that they have refused to recognise inequality as the problem it is. A stain of which I believe even future Tories and Liberal Democrats will be ashamed. --- In London we see the problems of inequality at their most extreme. Many of the wealthiest people in the world live in London. And they are thriving. They eat in the best restaurants in the world. They enjoy the best arts, theatre and culture in the world. But living side by side with them is the other 99% of Londoners. Who work long hard hours - longer than ever before. But for whom life has got more difficult. For whom wages have remained frozen. Who take the bus to work because the tube is now too expensive. Who long ago gave up on the dream of owning their own home. And who live in ever smaller and more overcrowded accommodation as the cost of rent goes up and up. London really has become a tale of two cities. And our cities economy no longer works for the majority of Londoners The gap between the two London's is growing ever faster. Our job - as the Labour Party and the trade union movement - is to bring the two Londons - and the two Britains - back together. To close the gap between Notting Hill and Newham. And build a true One Nation economy and society. --- But if we are to tackle this problem we must first be honest with the country. These are long-term and deeply rooted problems in our economy which governments of all parties have faced. -- I said at the beginning of my speech that the disconnect between the wealth of our nation and the finances of ordinary people is the dividing line of British politics today – and I sincerely believe this to be true. One of my jobs as Shadow London Minister is to hold Boris Johnson – the Mayor of London - to account The Mayor is a lifelong friend of David Cameron and George Osborne’s and is the leading candidate to be the next Tory leader. In a speech earlier this year he said: “Inequality is essential to fostering the spirit of envy" And: "It is a valuable spur to economic activity". Can you believe that? It goes to the very heart of what the Tory Party believes. Despite all the evidence to the contrary – from the IMF and Bank of England - they genuinely believe that inequality is a good thing. It’s why this Government thinks it’s ok to cut taxes for millionaires while ordinary people are facing a cost-of-living crisis. - In 2010, I, like many of you, backed Ed to be Leader of the Labour Party. As the Chair of Ed’s campaign I dedicated myself to getting him elected. And do you know why I backed Ed so full heartedly? Because Ed recognised that our economy is not working for ordinary people. He recognised that while those at the top are benefiting, everyone else is struggling. And he recognised that this is restricting opportunity and means that we are faced – for the first time in decades – with a situation where the next generation will be worse off than our own. --- And Ed has begun to lay out a set of truly radical policies to deal with this cost-of-living crisis in Britain. We will reintroduce the 50p tax rate because it's only fair that the very wealthiest pay their fair share. We will repeat the bankers bonus tax and use the money raised to fund a 'Compulsory Jobs Guarantee' - to tackle long-term unemployment. We will introduce a mansion tax on properties worth over £2 million and use the money raised to introduce a 10p tax band - cutting taxes for those who work hard but earn too little. We will build 200,000 homes a year and make renting more affordable and secure - because the cost of housing is a big part of the cost of living crisis - particularly in London. This amounts to a truly radical plan to tackle inequality and over the next year you will hear even more about how Labour will create a more equal country. -- But inequality of wealth and income isn't the only problem. Power is also distributed too unequally in Britain. Everyone – not just those at the top – should have the chance to shape their own lives. The causes of the daily frustrations in people’s lives are often the same: unaccountable power with the individual left powerless to act against it. And with money set to be tight after 2013, it is more important than ever that we give the ordinary citizen the political power they need tackle these frustrations. And the distribution of power has become more unequal than ever as a result of the policies of this government. Policies that have trampled on those least able to fight back or shout about what’s happening to them From watering down workers’ rights to people’s ability to receive proper legal representation. We have bitterly opposed this Government’s attack on our rights – and the power of the British people. We stood firm against their attacks on civil society in their lobby bill. We fought against their attempts to stop campaign groups and charities from contributing to our democracy. My colleague Stephen Twigg has asked Baroness Maeve Sherlock to lead Labour’s work on how we put the pieces back together We will repair the damage, in order to preserve a healthy, vibrant democracy. That gives power to ordinary people. Not one where those who dare disagree with us are simply muzzled. That’s not behaviour befitting of a proud democracy like ours. And we will fight against legal aid changes that leave thousands with unequal access to justice, and the unconstitutional assault on judicial review Yes, judicial review is awkward but that’s no reason to chop it off at the knees. Do that, and governments will be free to abuse their power. Power inequitably concentrated in the hands of ministers. A scary prospect, with alarming consequences. We’ll end the scandal of big private companies being paid millions of public money to deliver services but being exempt from the disinfecting sunlight of transparency. Where's the equality in that? That’s why Labour has committed to extend freedom of information laws so that public services run by private companies are covered. It’s wrong that multi-million pound contracts to run prisons, pay for schools or deliver health services should be able to hide behind a cloak of secrecy. After all, it is public money, and we should demand the same levels of transparency regardless of how it is spent. And on human rights I can say now, categorically that Labour’s support for the Human Rights Act – LABOUR’S Human Rights Act is totally unswerving. And we will not walk away or water down our commitments to the European Convention on Human Rights. A Convention written by Brits, exported to 800 million people across Europe, that has provided and will go on providing protection to millions and millions of people. Human rights laws that have tackled discrimination. Given a voice to victims of crime. Delivered equal benefit rights for widows and widowers. Recognised that the right to join a union is an essential part of freedom of assembly. After all, human rights are workers’ rights. Here, and abroad. They guarantee a more equal distribution of power in our society. And Labour will defend them tooth and nail. --- But this is not a problem we will be able to tackle alone – or quickly for that matter. Growing inequality is a global problem seen across the world. And the forces of conservatism will fight tooth and nail to protect their vested interests. We will need everyone who believes that inequality is a problem working alongside us. And in particular, we will need the trade union movement. The Labour Party and trade unions have fought inequality side-by-side for more than a century. We will need our relationship to be stronger than ever if we are to win the general election in 2015. Defeat the vested interests. And take the radical action we need to make Britain a more equal country. Thank you. › Gove urges schools to teach British values. But what are they? Sadiq Khan is MP for Tooting, shadow justice secretary and shadow minister for London. Subscribe from just £1 per issue More Related articles Sir Ivan Rogers: UK may wait until mid 2020s for an EU trade deal Novelty isn't enough for Emmanuel Macron and Martin Schulz Why is Marine Le Pen getting more popular?