The growing inequality gap – and how to fix it

 

HubMP2012

  DECEMBER 26, 2024

Mike Phipps reviews Seven Children: Inequality and Britain’s Next Generation, by Danny Dorling, published by Hurst; and Peak Injustice: Solving Britain’s Inequality Crisis, by Danny Dorling, published by Policy Press.

The premise of Seven Children is unusual. It constructs seven ‘average’ children from millions of statistics – each child symbolising the very middle of a parental income bracket, from the poorest to the wealthiest. The seven were born in 2018, when the UK faced its worst inequality since the Great Depression and became Europe’s most socially divided nation. They reached their fifth birthdays in 2023 amid a severe cost of living crisis.

Suffer the children

The years 2018–23 were some of the toughest for British children and their families since the Second World War, argues Dorling. From early summer 2019 through to a few months even before the start of the pandemic in March 2020, levels of satisfaction with life and happiness in the UK plummeted.

There are many reasons. One is that people in the UK no longer become better off as they age. That’s relatively new: the 1990s were the country’s first decade of persistent high income-inequality in recent memory.

Longer term, “very little has become better for most people in the UK since the parents of children like the seven in this book were themselves growing up.” As things stand in 2024, average wages and living standards do not look likely to return to 2008 levels until the 2030s.

In autumn 2018, when a third of the population, were already living below what is considered the minimum income standard, the United Nations Special Rapporteur on Extreme Poverty and Human Rights, made headlines with a report on the UK that found that, during the second decade of the twenty-first century, “food banks have proliferated; homelessness and rough sleeping have increased greatly; tens of thousands of poor families must live in accommodation far from their schools, jobs and community networks… and the social safety net has been badly damaged.” He added that “close to 40 per cent of children are predicted to be living in poverty by 2021.”

He was ridiculed by the UK government of the day, despite the fact that he had come to the UK at their request. In fact, his projection proved accurate.  This helps explain why satisfaction levels are so low: “The story of the last thirty years in the UK is that hope fell when change did not come.”

More recently, UNICEF found that between 2014 and 2021 child poverty rose faster in the UK than in any comparable country worldwide. More shockingly, a quarter of children now live in poverty in southeast England (defined as excluding London) –  that is more in the most affluent part of England than in all of Scotland.

The average height of the UK’s children is now falling, and has been for almost two decades. “More babies and children of all ages and in all areas now die before reaching adulthood than died a few years ago, despite lower birth rates overall,” notes Dorling in the Introduction to Peak Injustice, a curated collection of some of his writings from the last six years.

“When injustice is at a peak, none of the mainstream political parties oppose it,” observes Dorling. “That is how it came to be at that peak – by being accepted as inevitable.” The difference between this peak and previous ones in the past is that today we have all the information we need to see what is happening – but choose not to act.

Umair Haque has said that the USA is “a rich country where the average person lives like a poor person.” This is becoming true of the UK as well – and it’s getting worse. Official statistics for 2024 show a “huge and rapid increase in poverty, possibly the most rapid ever recorded in the UK.” Some 17% of children go hungry several times a month – a massive 5% increase on the previous year. The statistics on poverty are better in Scotland – but then “Scotland does not penalise the third, fourth and further children of households in receipt of any kind of benefits” – a policy for which children pay with their health, their well-being and their life chances.

In Peak Injustice, Dorling also looks at the failings of the NHS – increased mortality rates, in particular – which he attributes to a combination of forced privatisation and austerity. “Cuts to local authority budgets and the consequent repeated decimation, year on year, of adult social service visits and meals-on-wheels services, coupled with the stalling in required rises in healthcare funding and so much else very neatly matches up with the rising death rates,” he reports. Infant mortality rates also rose in the UK as midwifery services were cut back. The greatest rises were seen around the time of birth and were not matched elsewhere in Europe. In fact, in some European countries, infants were half as likely to die in their first year of life as those born in the UK.

Inequality rising

Inequality is a recurrent feature of both books.  In the 1980s, Britain transformed itself from one of the most equitable countries in Europe to one of the most inequitable. Dorling notes: “By 2019, the inequality gap among different areas in the UK had become so large that it couldn’t be plotted on European graphs without inventing a special scale to avoid the UK being literally off the chart, because its geographical inequalities were three times bigger than those of the next most unequal country.”

Social inequality runs alongside the geographical gap. Growing wage inequality is a major factor, with flexible working playing a major role.  At the start of the pandemic, there were more than a million people on zero-hours contracts — ten times more than there had been fourteen years earlier. In those early Covid-19 months, more than one in ten of all workers aged 16–24 in the UK were on such a contract.

Meanwhile, “Britain’s top earners pay much less than half the marginal rate they paid in the 1970s. In fact, the last time they paid as little tax as they pay today, as a share of their income, was in 1916.”

Escalating housing costs also make Britain an ever more unequal society. Rising house prices have driven more people into the growing private rented sector. Dorling highlights the steady rise in the proportion of older renters – people aged 45 to 54 – and how it not only increases the amount spent on housing costs; it also impacts on the ability of younger adults to begin renting in the first place. Whereas the proportion of households headed by someone aged 25 to 34 who rented privately did not exceed a fifth until shortly after the year 2000, that figure has now more than doubled – and if it is levelling off, it’s only because more adults aged 25 and over are living with their parents.

Who can blame them? Landlords increased rents for their tenants by more in the year to March 2024 than at any other time recorded in official statistics. At the same time, “Britain has also never had as many spare empty bedrooms as it has today. Never have such a small group owned so much that is so often empty. That is what an inequality crisis looks like,” concludes Dorling.

Thus the rapid rise in homelessness after 2010 was not caused by a housing shortage. “Even in London, there are more bedrooms in houses and flats than there are people to sleep in them.” The problem is that since 1981 housing in England and Wales has been increasingly unevenly shared out. Government policy – deliberately aimed at keeping house prices rising – is significantly to blame.

The empathy gap – and its political consequences

One of the features of long-term inequality is that people know less and less about others from a different socioeconomic background. Few people know, for example, that the number of financial penalties, the ‘sanctions’, that have been imposed on benefit claimants by the Department for Work and Pensions, now exceeds the number of fines imposed by the magistrates’ courts for all crimes of any kind committed in England and Wales and those imposed by sheriff courts in Scotland. And, unlike in a magistrates’ court, decisions on benefit claimants’ guilt are made in secret by officials who are subject to constant management pressure to maximise penalties, and the claimant is not represented in the process. “In the first quarter of 2022 there were almost 50,000 sanctions issued to Universal Credit recipients for not trying hard enough to find work,” writes Dorling in Peak Injustice.

This loss of awareness of how others live facilitates a decline of empathy. As we have previously noted, “Growing levels of inequality as a permanent fixture of society undermine social solidarity and lead to some believing that they are simply ‘better’ than others. These views were commonplace in the 19th century but declined in the post-war years of greater equality. They are back now, encouraged by a neoliberal  economic model that has been in place for over 40 years.”

“This empathy gap,” observed one recent analysis, “allows people like Neil Couling, Work Services Director at the DWP to say that ‘many benefit recipients welcome the jolt that a sanction can give them’. If Mr Couling had considered for a moment what he was stating, and regarded those he was targeting as human beings like himself, he might have thought differently.”

Declining empathy undoubtedly contributes to the rise of ‘othering’ and exclusionary – often racist – narratives pursued by the far right. “All across Europe it has been claimed that the rise of the far right was fuelled by those who lost out economically,” notes Dorling. “However, detailed research in the Netherlands in 2019 found that the opposite was true.”

The research showed that people who suffered a loss in income or unemployment did not move to the far right and their anti-immigration agenda. In Britain too, it might be added, more people believe immigration to be economically and culturally beneficial than ever before. Rather, people hit by the crisis usually support fairer income redistribution and may be drawn to  the radical left. Instead, it is those fearful of falling down the economic ladder, of losing what they have already gained, that are attracted to the right. The Conservatives have made such fearmongering central to their political discourse.

Reasons to be hopeful

Beyond the sometimes dry statistics, there is a lot of humanity in these books. Peak Injustice includes some very astute observations about the Jeremy Corbyn phenomenon. These include Dorling’s belief that  his growing popularity made it inevitable that he would be brought down; and that his apparent weakness – his refusal to make personal attacks and play the standard Machiavellian politician – may prove to be a lasting strength, that politics can be done differently: “He showed that it was possible to shift an apparently immovable political consensus, in a remarkably short time, by drawing on the power of decency, honesty and compassion – and hope.”

Dorling also reminds us that, although the 2019 general election was painted as the worst defeat for Labour in many years, Corbyn’s 32% share of the vote was higher than the 30% gained by Ed Miliband in 2015, the 29% won by Gordon Brown in 2010, the 31% won by Neil Kinnock in 1987 or the 27% that Michael Foot secured in 1983.

Dorling has some basic solutions to the crisis. He points out that in an experiment in 2008 a dozen people were asked what they needed to get off the streets. “The answer, it turned out, was on average £794… a very basic income was all it took.”

Redistributive taxation will be essential to tackle inequality. A majority of people now believe the government does too little. Last year the Fairness Foundation reported that more than four in five people in the UK agreed that the government should fund minimum levels of provision for social care, good quality childcare and preschool education and ensure cheap public transport. More than seven in ten agreed that government should provide enough funding to ensure basic decent provision in relation to social or rented housing and to lifelong learning and more than three in five agreed that the government should provide a minimum income. As these positions gather popularity, they also gain support from those who themselves are well off.

Many obvious solutions are already being applied – but not in the whole UK. The Scottish Child Payment system has reduced inequality to one of the lowest levels in Europe. “We can eliminate the worst of child poverty within a year,” concludes Dorling, “should we wish to.”

Who will pay? A land values tax would help, wealth taxes too, “enforced simply by changing the law to state that you do not own an item, land or shares that you do not pay the proper tax on.”

The current government believes that economic growth will generate the revenue needed to repair this broken country. Dorling is more doubtful, warning: “Please don’t rely too much on the promise of growth. People cannot eat growth.”

Mike Phipps’ book Don’t Stop Thinking About Tomorrow: The Labour Party after Jeremy Corbyn (OR Books, 2022) can be ordered here.