The Nationam Minimum Wage should be increased to a Living Wage. Photo: Getty
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We haven't yet tackled inequality; here are five ways to reduce it

The coalition boasts that it's reduced inequality, but actually no government policy in the last 30 years has actually come close to bringing it down to average OECD levels.

Inequality is now widely recognised as one of the most important issues affecting our country. Ed Miliband says that tackling inequality “will be Labour’s mission in 2015”, while Cameron Osborne and Cable have boasted that inequality has fallen under their stewardship. But no government policy in the last 30 years has actually come close to bringing inequality down to average OECD levels. 
 
A regularly used excuse for ignoring inequality is the country’s fragile economic recovery. The thrust of the argument is that “one has to think about how to grow the cake before one thinks about how to share it”. It rests on the assumption that high inequality is not only a necessary by-product of a successful economy, but that it is in fact integral to economic growth. The problem with this argument is that it is nonsense. Clearly some level of inequality is required to encourage people to strive. But there is increasing recognition among economists, academics and business leaders that excessively high levels of inequality, as experienced in the UK, are incompatible with economic strength. IMF research has shown that high levels of inequality makes periods of growth rarer and shorter. Germany, Finland, The Netherlands, Austria, Norway, Sweden, Denmark - the list of nations with higher GDP per capita and lower inequality than the UK is long, and shows that inequality isn’t necessary for prosperity and growth.
 
There is a widespread public belief, borne out by evidence, that economic growth without greater equality doesn’t help most people. People are told that the recovery is underway, but they can’t be fooled into believing their bills are suddenly easier to pay or that there is more money left at the end of the month. Some politicians, such as Nigel Farage, are already appealing to voters who feel left behind, with frequent references to the “elites” who oppose his “people’s army”.
 
The simple truth is, reducing inequality is vital to building a stronger economy. The Equality Trust’s recently published Fairer, Stronger Economy makes some suggestions:
 
All parties should adopt an explicit goal to reduce inequality
The first step in reducing inequality is for politicians to truly commit to the goal of reducing it. Each party should make an explicit commitment in their manifesto to reduce the gap between the richest and the rest. Whichever party wins the next general election should make sure they can be held accountable to that goal, by asking the OBR to vet their budgets to determine their effect on inequality. Last week Labour called for this to be the case for the Child Poverty Target, this must be extended to include inequality. 
 
The rate of the National Minimum Wage should be increased to a Living Wage
Our low wage, low productivity economy is trapping people in working poverty. The main UK parties have voiced aspirations to raise the National Minimum Wage to £7.00 or link its value to median pay, but more can be done. Cutting national insurance for those on the minimum wage and those who employ them can help ensure that everyone takes home a fair day’s pay for a fair day’s work.
 
Accredited vocational courses should be included in the student loans system
At the moment all 18-25 year olds who pursue education outside of the university system get very little help with living costs, while those who go to university get up to £7,751 a year in loans. The student maintenance loan makes university more accessible to people from all backgrounds and only has to be repaid when a person is earning close to the UK median wage. The same generosity  - and respect -should be extended those who invest in their skills outside the university system.
 
The government should establish a Workplace Commission
As recommended by the CIPD the government must convene a Workplace Commission to increase productivity through measures to share more responsibility and reward throughout the workforce, “as if the whole team matters to success”. This could be achieved through better co-ordination between government, employers and skills providers to help create a high skill, high productivity economy
 
The 50p top rate of income tax should be reinstated
Our research shows that increasing the top rate of tax would decrease inequality without harming the economy. It is a popular policy that would mean the broadest shoulders bear the greatest burden. All parties must now adopt it. 
 
There is no silver bullet policy that will both reduce inequality and deliver economic growth felt by all. But these proposals would signal a beginning. We need a transformation in the way we view inequality in order to turn our dangerously unstable and unequal economy into a fairer and stronger one, and we need this to start now.
 

Tim Stacey is from The Equality Trust

Tim Stacey is Senior Policy and Research Adviser at the Equality Trust. 

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David Blunkett compares Labour membership to failed revolution “from Ukraine to Egypt”

The Labour peer and former home secretary says new members need a “meaningful political education”, and accuses unions of neglecting their “historic balance”.

There are three sorts of opposition. There’s the civil society opposition, with people campaigning in their own specific areas, people who’ve got an interest group or are delivering social enterprise or a charity. I don’t think we should underestimate that because we're going to have to hang on to it as part of the renewal of civil society.

The second is the opposition formally, within the House of Commons: those who have agreed to serve as the formal shadow ministerial teams. Because of what I’d describe as the turmoil over the last two years, they’ve either not been able to be impressive – ie. they’re trying very hard but they don't have the coherent leadership or backing to do it – or they’ve got completely different interests to what it is they’re supposed to be doing, and therefore they’re not engaged with the main task.

Then there’s the third, which is the informal opposition – Labour linked sometimes to the Lib Dems and the SNP in Parliament on the opposition benches as a whole. They’re not doing a bad job with the informal opposition. People getting on with their work on select committees, the departmental committees beginning to shape policy that they can hopefully feed to the National Executive Committee, depending on the make-up of the National Executive Committee following this year’s conference. That embryo development of coherent policy thinking will be the seed-bed for the future.

I lived through, worked through, and was integrally involved with, what happened in the early Eighties, so I know it well. And people were in despair after the ‘83 election. Although it took us a long time to pull round, we did. It’s one reason why so many people, quite rightly in my view, don't want to repeat the split of 1931 or the split of 1981.

So they are endeavouring to stay in to argue to have some vision of a better tomorrow, and to persuade those of goodwill who have joined the party – who genuinely believe in a social movement and in extra-parliamentary non-violent activity, which I respect entirely – to persuade them that they’ll only be effective if they can link up with a functioning political process at national level, and at townhall and county level as well.

In other words, to learn the lessons of what’s happened across the world recently as well as in the past, from the Ukraine to Egypt, that if the groundswell doesn’t connect to a functioning party leadership, then, with the best will in the world, it’s not going to achieve its overall goals.

How do we engage with meaningful political education within the broader Labour party and trade union movement, with the substantially increased rank-and-file membership, without being patronising – and without setting up an alternative to Momentum, which would allow Momentum to justify its existence as a party within a party?

That's the challenge of the next two years. It's not just about someone with a vision, who’s charismatic, has leadership qualities, coming forward, that in itself won’t resolve the challenge because this isn't primarily, exclusively about Jeremy Corbyn. This is about the project being entirely on the wrong trajectory.

A lot depends on what the trade unions do. They command effectively the majority on the National Executive Committee. They command the key votes at party conference. And they command the message and resources that go out on the policy or programmes. It’s not just down to personality and who wins the General Secretary of Unite; it’s what the other unions are doing to actually provide their historic balance, because they always have – until now – provided a ballast, foundation, for the Labour party, through thick and thin. And over the last two years, that historic role has diminished considerably, and they seem to just be drifting.

I don’t think anybody should expect there to be a party leadership challenge any time soon. It may be that Jeremy Corbyn might be persuaded at some point to stand down. I was against the challenge against him last year anyway, purely because there wasn't a prepared candidate, there wasn't a policy platform, and there hadn’t been a recruitment drive to back it up.

People shouldn’t expect there to be some sort of white charger out there who will bring an immediate and quick end to the pain we’re going through. I think it’s going to be a readjustment, with people coming to conclusions in the next two years that might lead the party to be in a position to fight a credible general election in 2020. I’ve every intention of laying down some good red wine and still being alive to drink it when the Labour party is elected back to power.

David Blunkett is a Labour peer and former home secretary and education secretary.

As told to Anoosh Chakelian.

This article first appeared in the 30 March 2017 issue of the New Statesman, Wanted: an opposition