A NATION OF EQUALS
It is, as ever, a tremendous honour to be speaking from a Fabian Society platform.
No organisation - including the Labour Party - has thought longer and harder about how we make Britain a more equal country.
As John Denham wrote in one of your pamphlets six years ago: “If we ever give up on the challenges of fairness and equality the centre-left will have lost all meaning”.
Himself echoing Hugh Gaitskell’s heartfelt conviction that if Labour ‘were ever to abandon [equality], then I think there would be very little left to distinguish us from the Tories.’
But the truth is that the Labour Party has not been particularly effective at making the case against inequality in recent years.
New Labour didn’t like to talk about it much. And Ed Miliband was right to call that out. But Ed, in turn, too often assumed everyone agreed about it.
And we now need to reassess that. Because every Labour generation needs to explain afresh why the struggle against inequality is core to our political purpose.
For me it is about the scars of poverty and the almost criminal waste of talent.
There were just too many times when, as Shadow Education Secretary, I would visit schools – particularly in former coalfield communities, parts of Nottinghamshire and Derbyshire, as well as in my own constituency of Stoke-on-Trent – where you could see disadvantage being handed down the generations in front of your eyes.
Children physically small. Narrowed horizons. Fractured culture. Turning up to school barely able to speak. Suffering distress at home. Broken self-esteem.
For all the attempts by inspiring heads to attract good teachers, train effective teaching assistants, and open up opportunities – the barriers these bright, wonderful, earnest five year olds face in modern Britain were truly wretched to behold.
To be honest, it wasn’t just the physical poverty (although there was that), but the social, emotional and educational disadvantage that struck home.
That’s the truth about inequality the statistics don’t always show. And when it coexists alongside great wealth it leads to the destruction of a common life, making us a poorer country in so many ways.
I want to end that.
I want us to live in a nation of equals.
And I don’t know anybody in the Labour Party who doesn’t feel the same way.
But therein lies the problem. For if May’s defeat shows us nothing else it is that turning up on the British peoples’ doorstep armed only with moral outrage about the top and the bottom is not enough to win.
In my speech today I want to make some arguments about the nature of modern inequality; about its complexity and its changing nature.
I also want to open up a debate about the radical platform we will need to start reversing the tide. But most of all I want to make sure this Party stops making the same mistakes again and again.
Because for at least twenty years now we have failed to tell the British people a story which connects rising inequality to their hopes and aspirations.
We cannot fail again.
Reducing inequality is in the national interest.
A just fight.
A moral mission.
What we need now is to turn into a winning argument.
THE BATTLE OF IDEAS
But first we need to go back to that desperate, soul-destroying, collective kick in the teeth we all received seven months ago today.
Our worst defeat since 1983.
No matter how painful, we must debate and debate again why things went so badly wrong in May. And for me it partly comes down to a question of nerve.
Somewhere during Ed Miliband’s leadership we stopped challenging ourselves.
Whilst politics was changing dramatically across Europe, we were seeking out the safe and stolid comfort zone of technocratic social democracy.
We began bold and radical about new models of growth and social justice, and then became cautious and defensive;
And when we needed a confident account of how to take Britain forward, we offered a dizzying array of micro-targeted policies.
Now, many of those policies were both individually appealing and rooted in strong Labour values. But the overall effect was a sense of incoherence about who and what we stood for.
We all heard it on the doorsteps.
“I’ve always voted Labour… but this time I just can’t bring myself to do it”.
“I just don’t know what you stand for anymore”
Painful comments at the best of times. But when they come from the lips of working-class people we are supposed to represent, then they are nothing short of heartbreaking.
We need desperately to restore that fraying, emotional connection with working class communities – just like Jim McMahon has done in Oldham
And we must bind their concerns into a political project which resonates with the rest of the country. A 100 per cent strategy, if you will.
My contention is that tackling inequality is the cause which can accomplish that. I believe we can make the argument it impoverishes us all - including those at the top.
But only if we in the Labour Party rediscover our radicalism.
The political philosopher Roberto Unger has described the modern centre-left as seeming “content to appear on the stage of contemporary history as humanisers of the inevitable”.
Sadly, it is not an altogether unfair description. But you could never use it to describe the longer history of the Labour movement.
When our forebears created a decent working week, secure employment rights, the welfare state, public education, the NHS, the minimum wage, slashed child poverty and secured a ‘fair day’s pay for a fair day’s work’ for millions upon millions of working people down the decades - we were far more ambitious than that.
This past must now guide our future.
It was one of the powerful elements in Jeremy Corbyn’s party conference speech.
His argument that we “don’t have to take what we’re given” when it comes to social justice was a clarifying moment. A long overdue strike against the intellectual fatalism which had gripped our party.
Because whilst modern challenges like globalisation, climate change, mass migration, capital mobility, asset inflation and technological automation, do test the power of nation states like never before.
For far too long we on the centre-left have used them as an excuse for weak political will.
THE CONDITION OF BRITAIN
Yet it is still worth recalling exactly why Labour’s modern moral mission should be reducing inequality.
So here are just a few of the reasons:
- 3.7m British children are growing up in poverty with a staggering 4m not properly fed.
- Britain’s richest five families now own more wealth than its poorest twelve million.
- And, extraordinarily, the typical earnings of the cohort born in 1983 are around £2,800 a year lower than those born in 1978 at a similar stage of their lives.
Sadly, today, Britain stands as the most unequal OECD country in Europe.
A country where for practically the first time in our history we have a generation growing up with less power, opportunity and wealth than the last.
And worryingly the trend is in the direction of more not less inequality. Globalisation and automation are continuing to hollow out the middle of the labour market.
Extra competition for low-skilled work is creating downward pressure on wages. And that in turn creates poor incentives for investment, stagnant productivity, a lower tax base, tighter public finances and an ever rising tide of inequality.
This explains the continuing crisis over tax credits and a minimum wage: put simply, the labour market is no longer opening up the kind of opportunities for social and material advantage as was historically the case.
The IMF now unequivocally argues that reducing inequality boosts growth. We have now moved beyond the New Labour mantra that economic efficiency and social justice should march hand in hand.
We now know that they must if either is to advance.
Put simply, a more equal society is a more mobile society.
You can see it in the international league tables where the egalitarian Scandinavian countries cluster at the top and less equal countries like us bunch at the bottom.
When the rungs are further apart, the ladder is more difficult to climb.
As Richard Wilkinson and Kate Pickett’s influential work, The Spirit Level showed, the story is the same across a whole host of social outcomes.
Health, happiness, crime, violence, social cohesion - inequality seeps into everything.
Just look at the behaviour of middle-class parents when it comes to securing educational advantage. Sports clubs, extra tuition, securing the catchment area.
Because however much the state might seek to promote equality of opportunity, in unequal societies such ‘defensive expenditure’ frequently emerges as a privilege preserving reaction.
It is no good decrying such behaviour.
I would certainly never dream of demeaning parents’ natural desire to secure their children’s future happiness.
But what we need is to create a society where the penalties for failure are nothing like as severe. And where talk about the future of ‘our kids’ means the whole neighbourhoods, rather than just our own.
A deeper sense of community which comes with greater social confidence.
With economic security.
But most of all with greater equality.
A CENTRE-GROUND CAUSE
This is what I mean by a nation of equals.
A nation where of course we always seek to tear down the barriers which separate the rich and poor.
But where whatever our differences in wealth, income, age, geography, power, gender, race and class, we can still maintain ties of social obligation to one another.
However, I should be clear that whilst there may well be some within our party who see equality as an end in and of itself, I am not one of them. Indeed, it always seemed to me one of the more absurd criticisms of socialism that ours was a philosophy of uniform equality.
Socialism as a modern political philosophy began in the aftermath of the French Revolution, with the work of Robert Owen, Saint-Simon and Charles Fourier.
Their vision was always about building a society in which the unique skills and capacities of each individual had the capacity to flourish.
‘From each according to his abilities, from each ability according to his work,’ as Saint-Simon – and, later, Karl Marx, would hijack.
Today, the case for equality, as in the Spirit Level, is a more instrumental one. The fundamental task of progressive politics remains to ensure the opportunities enjoyed by the powerful are spread to the powerless.
A position which itself stands within a deeper tradition, of Tawney and Hattersley, which views positive freedom as the Labour Party’s ultimate end.
Yet this was what was so frustrating about New Labour’s aversion to talking openly about greater equality. Because with more equality, everything they did make a passionate political case for would only have been strengthened.
Fairness, opportunity, social mobility, child poverty, aspiration: everything.
And as Justin Trudeau has shown in Canada, a political project grounded in tackling inequality can win.
In contrast, the lesson we have to draw from Ed Miliband’s Labour is that moral outrage about inequality is not enough. We need to demonstrate much more effectively how it blights ordinary lives; how it stops working people from getting on and enjoying a better life.
To mainstream political anger towards social inequality.
And cultivate it into impatience for a better, more equal future.
Because if you are an anxious parent worrying how on earth your son or daughter is going to get into a good school with a well-motivated teacher - inequality is a centre-ground cause.
If you are low paid worker at a big firm which can’t afford to give you a pay-rise but still hands out big dividends and executive salaries - inequality is a centre-ground cause.
If you are young graduate trying to secure your first job but are locked out of opportunities because others have backdoor access - inequality is a centre-ground cause.
UNDERSTANDING MODERN INEQUALITY
These are the sort of the messages we need to take to the Labour doorstep. Stories which can ground our moral mission in the real concerns of ordinary working people. And move a conversation about inequality beyond our internal echo chamber.
However, we still need to connect this to a new policy platform. And that means learning from another one of New Labour’s limitations.
Jon Cruddas calls it “monetary transfer social justice” - an attempt to collapse the Labour project into an exercise in fiscal transfers.
The effect of this in government was that it led us to rely overly upon redistribution to arrest the rising tide of inequality.
In this Parliament, we have fought a powerful and ultimately victorious campaign on retaining tax credits. But the evidence shows that is not enough.
Because the market outcomes of our economic model were far less equal in the first place, the gap was too big to bridge by redistribution alone.
We need to move beyond that old ‘Croslandite’ model of tackling inequality. Not just to arrest inequality but to comprehensively reverse it.
Friends, I think there should be two components to our approach.
First, bigger and bolder redistribution; redefined and refocused upon the more pressing wealth and asset inequalities of the age.
Second, a more assertive social investment state, which challenges concentrations of market power and rewrites the economic rules of the games.
However, I also think we need to remember class.
Dorothy Thompson said that “British history cannot be written without great regard to the idea of class. It was present in relationships in the home and in the workplace; speech, eating habits, dress, location of homes and of children’s education”.
And I believe – as Owen [Jones] has shown so successfully - that social class still captures a far richer story of how privilege sustains itself than traditional income and wealth measurements.
Robert Putnam’s Our Kids: the American Dream in Crisis has influenced me perhaps more than any other book I read during my tenure as Shadow Education Secretary.
Backed up by the latest evidence in child development it tells the story of the myriad ways that class advantage makes the difference in America.
Most shockingly of all he finds privilege to be an even stronger predictor of college graduation than high school attainment.
It is not so different here.
Here there are good schools and poor schools, great teachers and not so great teachers.
But it is simply staggering how much schools have to swim against the current when it comes to helping poorer children fulfil their potential;
Too often we in the Labour Party reduce it to one: income poverty.
A big one, certainly.
But not the full picture.
If we want a nation of equals we need to talk frankly and honestly about class.
We need to explore all the persistent inequalities of condition which allow privilege to sustain itself.
And have difficult, challenging conversations about access to culture, social capital, family breakdown, parenting, community, neighbourhood, work, housing access, informal networks, civic pride, faith in education and so much more besides.
A NEW POLITICAL ECONOMY
But let me start the conversation today with political economy.
First, we need bolder and braver redistribution. Because if equality of opportunity is everything; equality of outcome affects it.
And from a first principle basis, our tax system is horribly skewed. We tax some noble pursuits like work and enterprise too much. And we tax some things like unearned wealth very little indeed.
Let me start with an easy choice: inheritance tax. Labour should, of course, commit to reversing the Tory’s inheritance tax cut for the wealthiest estates. A tax cut for just 6% of households. Which would be better spent on affordable housing, young apprenticeships or Sure Start centres.
We must reverse it.
Second choice: a property value tax.
Property wealth is one of the biggest sources of inequality in this country, but for too long we have been content to put up with the regressive, out of date, and inefficient council tax system.
This has to change.
We have to replace council tax with a system that ensures more valuable properties shoulder the biggest share of the tax burden.
Fourteen OECD countries - including the US - raise a recurring tax on the value of residential property.
And as IPPR figures show, an annual 0.5% tax upon the value of each property - less than most countries - would completely cover the cost of replacing the council tax.
What is more if we raised it on owners, not occupiers, it would take ‘generation rent’ completely out of local taxes altogether.
And if we include properties owned by trusts and foreign individuals too, then I strongly suspect it could do all this and release money for social investment.
Let me then turn to the social investment state.
Not all of this is about public expenditure. For example, Liam Byrne has recently set out lots of very sensible cost-free reforms to corporate governance legislation which should command all our attention.
And boosting collective bargaining rights for trade unions is also essential.
The OECD points out that in the last decade labour’s share of national income fell by 4% in rich countries. Doesn’t sound like much until you work out it’s around £96bn.
So, the next Labour Government should certainly commit to repealing the Trade Union Bill within its first 100 days.
But, more than that, we should seek to work with the trade unions on rebuilding them for the coming economy of self-employment, micro-businesses, declining social rights, and the unequal effects – sometimes liberating, sometimes exploitative – of flexibility.
In short, a chance, once more, to be on the side of the insurgents and outliers, rather than a public sector comfort zone. However, more often social investment means taking pre-emptive measures rather than tackling inequalities later down the line.
Call it "early intervention Socialism", call it “upstream Socialism” - call it anything but “predistribution” – but a policy which focuses on decent housing, mental health, support for parents, and technical education.
That means continuing to push active labour market policies to secure full employment, as with our manifesto jobs guarantee commitments.
But most of all it means investing and investing again in early years support - most obviously universal childcare provision.
We are tantalisingly close to a Scandinavian-quality, universal child care offer. Only £2.5bn a year away – and that includes £450m to radically raise workforce quality.
I called for this back in May and I will keep calling for it until it becomes official party policy.
Because for true social investment nothing else comes close.
It would boost maternal employment, reduce the cost of living, slash the welfare bill, generate growth, improve the quality of early education and child wellbeing, and radically reshape the structure of our labour market.
If you ask people what they expect from government – what our job is – I think the majority answer would be to help them and their family get on.
Above all else I think that’s what the British people want.
A decent chance.
A fair shot.
We may not hail from the rooftops like they do in America, but it must be pretty close to British value we can all agree upon.
Yet however much politicians – of all parties – pay lip service to it, for so many people in Britain today it is a distant dream.
Whole communities are being left behind.
Communities where our children believe success is something that happens to other people.
And where their parents believe the past is a happier country.
That is what modern inequality destroys.
The hope for a better future.
The belief that Britain is a fair country. And with that perhaps faith in politics too.
You know, the Tories talk a lot about tough choices. They talk too about “getting on”.
But they have shown no appetite for making the tough choices which can reduce inequality and thus give people a fair shot at success.
Yes, they wring their hands from time to time - or at least the more thoughtful ones do.
But like the “boats against the current” in The Great Gatsby, the logic of their ideology always pulls them back.
They will never see the state as an empowering agent for the common good.
And they will always be spineless when it comes to tackling concentrations of wealth at the top.
In contrast, we in the Labour now have four years to show we can take tough choices on inequality.
But we can’t do it by talking to ourselves. Nor by merely asserting the innate virtue of our values.
It has to be a message which shows why inequality impoverishes us all.
Friends, the lesson of May is that we do not win when we frame inequality as only being about the top or the bottom.
But if we can develop a clear and optimistic argument for a more equal Britain;
If we ground that case in the real not imagined concerns of ordinary people;
And if we can combine all that with a convincing and credible public policy platform that speaks to the Labour Party’s moral mission: battling inequality and renewing fairness.
If we do all that then there is absolutely no reason why we cannot win the trust of the British people once again.
A NATION OF EQUALS It is, as ever, a tremendous honour to be speaking from a Fabian Society platform. No organisation - including the Labour Party - has thought longer...