As a Tory, I’ve been thinking a lot about inequality recently. Has it really increased in the past five years? Or is that just scaremongering on the part of the left?
By most measures, there’s not much evidence that the United Kingdom became more unequal in the last parliament. Take the UK’s ‘Gini co-efficient’, which measures income inequality. In 2009/10, it was higher than it was at any point during the subsequent three years. Indeed, in 2011/12 it fell to its lowest level since 1986. Data isn’t available for the last two years, but there’s no reason to think it has exceeded what it was when Labour left office. George Osborne claimed that inequality had fallen in his budget speech and the Institute of Fiscal Studies confirmed this, if you assume everyone has faced the same rate of inflation since he became Chancellor.
The fact that Labour’s track record on tackling income inequality is worse than the coalition’s doesn’t mean present levels are acceptable, of course. The median income of the highest-earning 10 per cent of couples with two children is roughly eight times larger than the median income of their equivalents in the bottom 10 per cent. Is that too high?
Few conservatives would object to income inequality on principle. Rather, it is regarded as the inevitable consequence of the fact that talents are distributed unequally, with some being able to charge more for their labour than others. For the most part, conservatives have the same attitude towards wealth inequality (which has grown over the course of the last parliament, thanks mainly to rising property prices). Like Peter Mandelson, we’re intensely relaxed about the rich.
We might be more troubled by in-equality if it was leading to more crime, but it isn’t. According to the latest Crime Survey for England and Wales, crime has fallen to its lowest level since the surveyors started collecting data in 1981. Violent crimes and sexual offences have increased by a small amount since 2002/3, but that’s due to changes in the way they’re recorded. The murder rate in London has fallen to its lowest since the 1960s.
The big issue for conservatives is not inequality per se, but the condition of the poor — sometimes referred to as ‘the long tail’. Did they suffer more under the coalition than under Labour, as the proliferation of food banks would suggest? In fact, poverty has fallen in the last parliament, provided you define it in relative terms, i.e. those households earning less than 60 per cent of the median income. Again, figures aren’t available for the last two years, but in 2012/13 relative poverty (before housing costs are factored in) was at its lowest point since 1985.
Broadly speaking, relative poverty is declining for the same reasons that income inequality is. The rich are paying more in tax than they were five years ago and the coalition cut tax for 26 million people and took three million out of tax altogether. In addition, almost two million new jobs have been created and the unemployment rate has fallen significantly since Labour left office. To claim that those who’ve found jobs in the last five years are all on zero-hours contracts, as Owen Jones would have us believe, is false. Fewer than 700,000 people are on zero-hours contracts in the labour force, a mere 2.3 per cent of the total.
True, social mobility isn’t what it might be and that’s a real issue for conservatives. But defenders of the last government can point to Michael Gove’s education reforms and the record numbers of children from disadvantaged backgrounds going to university, where ‘disadvantaged’ is defined as those living in households in the bottom income quintile. They comprised 18.3 per cent of the total last year, the highest percentage on record. So much for the argument that the rise in tuition fees would deter children from low-income families from applying to university.
What about the children from disadvantaged families who don’t go to university? The coalition created over two million apprenticeships and the Conservatives have pledged to create an additional three million in the next parliament.
All in all, I don’t think supporters of the last government have too much to be ashamed of when it comes to income inequality and relative poverty — and the Conservatives have the best policy when it comes to tackling wealth inequality, which is extending home ownership. Try to remember that over the next five weeks when angry lefties try to shame you into voting Labour.
Politicians should leave the wealthy alone– they already contribute more than their fair share
Join us on 22 April for a Spectator debate on wealth and politics. Are wealth taxes the answer? Or is it wrong to squeeze the rich? Chaired by Andrew Neil.For the motion: Toby Young, William Cash and Fraser Nelson. Against the motion: Owen Jones, Jack Monroe and Molly Scott Cato MEP. For tickets and further information click here.
Toby Young is associate editor of The Spectator.