Welcome to Cabinetland: The worsening inequality between Britain's rich and poor is shameful

The economic divide in Britain, hastened and worsened by the north-south divide, is wider now than any time since the war, and it is getting worse. That income inequality became worse during the boom is deeply regrettable. But that this has continued into

At the last Prime Minister’s Questions of the session David Cameron was triumphant. “Britain is getting stronger,” he proclaimed. Labour MPs, with caseloads filled with vulnerable people seeing their standard of living collapsing, were incredulous.

As the Coalition moves into its fourth year, the gap between the government and the opposition has widened to more than politics. Increasingly, the two opposing benches reflect two entirely different countries.

In one of these countries, unemployment is 2.6 per cent. The number of people claiming Job Seeker’s Allowance is down over nine per cent on last year. Youth unemployment has plummeted by 19 per cent in the last 12 months, and even over-50s unemployment is down. Each constituency has just 300 people unemployed for longer than twelve months.

These are the average figures for the 21 MPs who are full Cabinet members.

In the other country, there are no Tory MPs. Unemployment is 13 per cent. Every constituency has over 6,000 people looking for work. A quarter of them are under 25. One in three of those people has been looking, fruitlessly, for over a year.

This is the typical situation in the ten constituencies worst affected by the economic incompetence of the Coalition. My own hometown of Middlesbrough, which I now have the honour of representing, is among them.

As David Cameron enlists the help of Barack Obama’s campaign manager Jim Messina, it is perhaps worth looking at the message that handed the US President his only electoral defeat, that of the 2010 midterm elections. The message, repeated ad infinitum by the Republicans, was simple. “Where are the jobs?”

The claim from the Coalition is that “There are more people in work than ever before”. This claim is emblematic of the torturing of figures this government has been pulled up on repeatedly by the UK Statistics Authority. There are more people in work than ever before because Britain has more people than ever before. But the number of people unemployed is higher than it was in 2010. The rate, 7.8 per cent nationally, is unchanged since the Coalition came to power.

Despite herding people onto unpaid workfare schemes and counting that as a job.

Despite freezing the minimum wage for young people at a time of high inflation, cheapening their labour.

Despite a million people on zero hours contracts, unsure of if they will be granted the right to work today.

Further, productivity has fallen. The output per hour of private-sector workers fell by almost four per cent in the year to October 2012, according to data from the Office for National Statistics. Figures for the economy as a whole were not much better, with a 2.4 per cent decline in productivity over the year.

There are more people, working longer, in worse conditions to produce less value. Yet George Osborne has the nerve to crow about an ephemeral 0.8 per cent increase in GDP, in what is now the longest depression in British history.

Nothing has changed. For over three years this government has been treading water. It has done so with impunity, because the people it represents are doing fine. Your income is down, but the FTSE is up.

The targeting of the government resources echoes this twisted view. In response to the chronic household shortage in the UK, the government could have announced a mass house building programme. This would simultaneously have generated jobs for skilled and unskilled labour, in a construction industry still languishing at 14 per cent below capacity.

Instead we got George Osborne’s “Funding for Lending Scheme” (FLS). As of the end of March this year the scheme gifted £16.5bn of low interest loans to the banks. The effect? Mortgage rates have got cheaper, but primarily only on loans where those remortgaging or buying have at least 20 per cent equity in their home, or an equivalent deposit. The people the Chancellor thinks are really in need are those trying to buy a home with only fifty grand in the bank.

Universal credit will be “digital by default”, because who doesn’t have a computer? Benefit payments will be delayed an extra week, because who doesn’t have an overdraft? Legal aid will be cut because who doesn’t have a lawyer on retainer?

The economic divide in Britain, hastened and worsened by the north-south divide, is wider now than any time since the war, and it is getting worse. That income inequality became worse during the boom is deeply regrettable. But that this has continued into the bust is shameful. The average wage rise for those in work who don’t receive bonus payments is just one per cent, while inflation is more than double that. Meanwhile there was a sharp jump in bonus payments in the financial services sector in March this year: end-of-financial-year bonuses were 64 per cent higher than in March 2012.

Whether the blindness of the Coalition to the sufferings of ordinary people is deliberate or merely accidental does not matter. The compact between the richer and the poorer of Britain, Disraeli’s two nations, benefits us all. The deeply corrosive affect it has upon our society might start in Middlesbrough, or Birmingham Ladywood, or West Belfast, but the long term effects of inequality make life worse for everyone.

Andy McDonald is the Labour MP for Middlesbrough

William Hague and David Cameron. Photo: Getty
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Donald Tusk is merely calling out Tory hypocrisy on Brexit

And the President of the European Council has the upper hand. 

The pair of numbers that have driven the discussion about our future relationship with the EU since the referendum have been 48 to 52. 

"The majority have spoken", cry the Leavers. "It’s time to tell the EU what we want and get out." However, even as they push for triggering the process early next year, the President of the European Council Donald Tusk’s reply to a letter from Tory MPs, where he blamed British voters for the uncertain futures of expats, is a long overdue reminder that another pair of numbers will, from now on, dominate proceedings.

27 to 1.

For all the media speculation around Brexit in the past few months, over what kind of deal the government will decide to be seek from any future relationship, it is incredible just how little time and thought has been given to the fact that once Article 50 is triggered, we will effectively be negotiating with 27 other partners, not just one.

Of course some countries hold more sway than others, due to their relative economic strength and population, but one of the great equalising achievements of the EU is that all of its member states have a voice. We need look no further than the last minute objections from just one federal entity within Belgium last month over CETA, the huge EU-Canada trade deal, to be reminded how difficult and important it is to build consensus.

Yet the Tories are failing spectacularly to understand this.

During his short trip to Strasbourg last week, David Davis at best ignored, and at worse angered, many of the people he will have to get on-side to secure a deal. Although he did meet Michel Barnier, the senior negotiator for the European Commission, and Guy Verhofstadt, the European Parliament’s representative at the future talks, he did not meet any representatives from the key Socialist Group in the European Parliament, nor the Parliament’s President, nor the Chair of its Constitutional Committee which will advise the Parliament on whether to ratify any future Brexit deal.

In parallel, Boris Johnson, to nobody’s surprise any more, continues to blunder from one debacle to the next, the most recent of which was to insult the Italians with glib remarks about prosecco sales.

On his side, Liam Fox caused astonishment by claiming that the EU would have to pay compensation to third countries across the world with which it has trade deals, to compensate them for Britain no longer being part of the EU with which they had signed their agreements!

And now, Theresa May has been embarrassingly rebuffed in her clumsy attempt to strike an early deal directly with Angela Merkel over the future residential status of EU citizens living and working in Britain and UK citizens in Europe. 

When May was campaigning to be Conservative party leader and thus PM, to appeal to the anti-european Tories, she argued that the future status of EU citizens would have to be part of the ongoing negotiations with the EU. Why then, four months later, are Tory MPs so quick to complain and call foul when Merkel and Tusk take the same position as May held in July? 

Because Theresa May has reversed her position. Our EU partners’ position remains the same - no negotiations before Article 50 is triggered and Britain sets out its stall. Merkel has said she can’t and won’t strike a pre-emptive deal.  In any case, she cannot make agreements on behalf of France,Netherlands and Austria, all of who have their own imminent elections to consider, let alone any other EU member. 

The hypocrisy of Tory MPs calling on the European Commission and national governments to end "the anxiety and uncertainty for UK and EU citizens living in one another's territories", while at the same time having caused and fuelled that same anxiety and uncertainty, has been called out by Tusk. 

With such an astounding level of Tory hypocrisy, incompetence and inconsistency, is it any wonder that our future negotiating partners are rapidly losing any residual goodwill towards the UK?

It is beholden on Theresa May’s government to start showing some awareness of the scale of the enormous task ahead, if the UK is to have any hope of striking a Brexit deal that is anything less than disastrous for Britain. The way they are handling this relatively simple issue does not augur well for the far more complex issues, involving difficult choices for Britain, that are looming on the horizon.

Richard Corbett is the Labour MEP for Yorkshire & Humber.