Tim Stacey is Senior Policy and Research Advisor at the Equality Trust.
There’s a growing debate within conservatism as to the importance of reducing economic inequality: both over whether it is consistent with conservative values and whether it is politically expedient. Yesterday Ryan Bourne of the IEA suggested conservatives would be wrong to embrace inequality reduction. But in doing so he failed to grasp that many already have, and for sound reasons.
In his most recent Budget speech George Osborne stated that inequality had fallen over the past five years, echoing a statement made during last year’s Autumn Statement. But other leading lights within the Conservative Party have also identified inequality as a key concern. Most recently Michael Gove in addressing the Launch of the Good Right highlighted how “inequality remains the great social and political challenge of our time”. And conservative commentators like Conservative Home’s own Peter Franklin have also talked of the problems associated with inequality.
There are a number of reasons why ignoring inequality would be a terrible idea for conservatives. The first is that it is inconsistent with principles many conservatives hold dear. Extreme inequality, such as we have in the UK, prevents people from reaching their true potential. All serious reviews of the evidence, from the Institute of Fiscal Studies to the OECD, agree that you simply cannot increase social mobility without reducing inequality. A society where the poor are given no chance to move out of poverty is one no-one would seriously endorse, but this is exactly what occurs in more unequal countries. Tackling poverty therefore requires us to tackle inequality.
Just as fundamental to the conservative cause is the presence of strong, stable families and communities. But these are not possible with high levels of inequality. It is a dire problem for communities when house prices are so high that people born in an area can’t afford to live there, let alone buy a house there, while others are able to buy up huge property portfolios. Equally as damaging is the huge gap in healthy life expectancy between rich and poor areas, with those in the poorest parts of England now experiencing over 18 fewer years of healthy life expectancy than those in the richest areas.
People living in less equal countries are also less likely to take part in social and civic activities and are less likely to trust their neighbour, also crucial elements of robust communities. And rather than this evidence being ‘debunked’ as Ryan suggests, impartial evaluations have consistently supported it. Put simply, it is hard to maintain a sense of community, identity, and pride throughout a nation when people’s life experiences differ so much from one area to another.
Interestingly Ryan also points towards another problem with inequality of concern to many conservatives: its hindrance of the correct functioning of free markets. As he rightly notes, cronyism, monopolies and uncompetitive markets are anathema to a healthy, functioning economy – in many cases they are also drivers of inequality. This is why the OECD, IMF, CBI and many others have recognised the dangers of extreme inequality. Conservatives at least as far back as Teddy Roosevelt in the US have been breaking up monopolies and lowering the barriers of entry to help boost competition and tackle inequality. And there is no conservative value in having a tax code too complex for small business to understand, but that large business can exploit, for example. Tackling such elements would provide genuine competition and would likely reduce the huge gap between those at the top and the many hard working people beneath.
On a very basic level the importance of inequality relates to how people see themselves. As the Office for National Statistics concluded yesterday “what makes most difference to personal well-being is the level of individual’s income relative to those around them”. This is hardly a new insight with thinkers as far back as Adam Smith recognising the significance of relative inequality. But it points to a greater truth, that very high levels of inequality have never been acceptable to British people.
Over 80 per cent of the public agrees that the gap between high incomes and low incomes is too large, and 70 per cent believe that it is the government’s obligation to reduce it. Inequality has also consistently been listed amongst the top ten issues that the British public cares about. The reason for this is that extremely inequality is incompatible with the values held by most people in Britain. It flies in the face of our basic sense of fairness and decency. Any political platform that fails to acknowledge inequality is not only likely to be unpopular; it is likely to commit electoral suicide.