Sunday, 18 January 2015

Poverty and Inequality in Coalition Britain

Kevin Hickson at the University of Liverpool discusses poverty and inequality in Britain

At the last Prime Minister's Question Time of 2014 on 17th December David Cameron stated that both poverty and inequality were falling under his government.  In so doing, he repeated a claim he had made last summer (11th June).  The statement begs two questions: to what extent does Cameron fit into the Conservative Party's traditional forms of thinking on poverty and inequality; and, secondly, is he right in making such claims?

Elsewhere I have argued that inequality is the core unifying principle of Conservatism.  All Conservatives believe in inequality.  The disagreement is not over the principle of inequality but how much inequality is tolerable and how it should be justified.[1]

There are three broad positions on inequality within British Conservatism.

  • One Nation Conservatives believe that inequality is a natural part of any society but in order to avoid social instability the rich and powerful have an obligation to help those who were less fortunate.  Social reform would create a sense of social unity and stop the rise of socialism.  Social inequality would be maintained in that people would be part of a class system but in order to stop social antagonism poverty should be seen in relative rather than absolute terms. 
  • Traditionalists believe that a hierarchical and unequal society is both natural and inevitable.  Any well-functioning society would have inequalities in power, status and wealth.  A ruling elite was inevitable and should be imbued with a sense of authority which inequality provided.  The authority of the state would be maintained through a strong sense of patriotism and law and order. 
  • New Right followers of Margaret Thatcher believed that inequality should be justified primarily in terms of the market economy.  Tax breaks for the rich would encourage entrepreneurialism and the new wealth created would benefit society as a whole.  Although the gap between rich and poor would increase it wouldn't matter in that the newly created wealth would 'trickle down' to the less fortunate.  With a residual welfare state for those in need, those who remained in poverty would do so because they lacked individual responsibility.  Poverty would be seen in absolute rather than relative terms and only existed if people lacked enough to meet their basic needs.  Since basic needs were largely met there was very little poverty.  On this basis the poor of the 1980s were wealthier than medieval barons according to Keith Joseph.

We are now in a position to examine Cameron's approach to poverty and inequality.  In significant statements in the run up to the 2010 General Election Cameron and other Conservative modernisers sought to distance themselves from Thatcherism.  In particular they expressed their support for the 'Big Society'.  They argued that this was different from both New Labour, which had pursued statist policies at the expense of the voluntary associations and local networks of civil society, but crucially it also distinguished them from Thatcher who had claimed that 'there was no such thing as society'.  Although only saying this once, it took on a significance and notoriety within popular understandings of Thatcherism.  It appeared to show Thatcher's uncaring and individualistic attitude.  In an attempt to show that the Conservative Party was no longer the 'nasty party', in Teresa May's famous phrase, the Big Society rhetoric was an attempt to show that the Conservative Party was now more caring and compassionate.  Poverty was to be understood once again in relative terms, rather than as an absolute as the New Right had expressed it.

Cameron's claim that inequality was falling was technically correct when measured in terms of the Gini coefficient, which was 32.3% in 2011/12, its lowest level since 1986.[2]  Moreover, there were 300,000 fewer children in relative poverty between 2009-10 and 2011-12.  However, absolute child poverty increased by the same amount over the same period.[3]  As ever, there is a need to analyse why these trends happened and the main reason seems to be that those on average earnings were squeezed while welfare payments for the poorest increased.  The result was an increase in absolute poverty but a fall in relative poverty.  Cameron's claim was therefore true but only tells part of the story.

However, the welfare reforms of Iain Duncan Smith have seen even greater emphasis on the distinction between the deserving and the undeserving poor and increased conditionality.  Specific measures such as the spare room subsidy, or 'Bedroom Tax' have caused significant financial hardship.  Moreover, towards the end of 2014 George Osborne stated that his desire was to further reduce public expenditure as a proportion of GDP to the level that it was in the 1930s.  The austerity agenda has focussed on reducing the size of the 'wealth consuming' public sector in order to free up resources for the 'wealth creating' private sector. 

One consequence of this is that respected sources of opinion point to the rise of both poverty and inequality in coming years.  The Institute of Fiscal Studies says that in 2020 relative child poverty will be at its highest since 1999 and absolute child poverty at its highest since 2001.[4]  By 2020, according to the National Institute of Economic and Social Research the government will have missed its target for reducing child poverty - 24% for absolute child poverty (19% over target) and 21% for relative poverty (11% over target).[5]

We can see the revival of New Right economic and social priorities.  Consequently the use of the term 'Big Society' has been used less frequently, if not abandoned altogether.  The doctrine of the Big Society was formulated prior to the banking crisis of 2008 and the subsequent recession and at that point the Conservatives were stating that they would match Labour's spending commitments.  The economic crisis recast Conservative thinking and the earlier Thatcherite themes re-emerged.  There has been no revival of One Nation Conservatism and the New Right mode of thought still dominates Conservative Party thinking. 

Kevin Hickson is the leader of Crewe Town Council and Labour's PPC candidate in East Yorkshire. He is also a senior lecturer at the University of Liverpool, where he researches British politics and ideologies. He tweets at @Kevin_Hickson.

[1] K. Hickson, 'Inequality' in K. Hickson (ed.) The Political Thought of the Conservative Party since 1945 (Basingstoke: Palgrave, 2005) and numerous journal articles.  The thesis was further articulated by P. Dorey, British Conservatism: The Politics and Philosophy of Inequality (London: IB Tauris, 2010)
[2] All statistics taken from Accessed 9th January 2015
[3] Ibid.
[4] Ibid.
[5] Ibid.

1 comment:

  1. Do not disagree with any of this analysis.

    What I would add is the fact poverty and increasing inequality - such as a ratio of 120:1 between the highest and lowest paid - do not seem to be a matter of much public concern or anger.

    Various opinion polls and attitude surveys show that many people still firmly believe that poverty is caused by the behaviour and lifestyles of the poor themselves - the popular (mis)conception that the poor are merely lazy, feckless, do not try hard enough to find work, have too many children, expect something for nothing, etc.,

    A recent survey also asked people how much they thought an unemployed person received in welfare benefits; the responses revealed that many people cite a sum which is far, far higher than the amount which is actually paid. So the notion of an 'over-generous' welfare state persists.

    As such, poverty is not widely attributable to low wages, or the super-rich appropriating an unfair or excessive amount or wealth for themselves via sky-high salaries and bonuses. Poverty is 'the fault' of the poor themselves, rather than the inevitable consequence of neo-liberalism and untrammelled market forces.

    Moreover, the Coalition has successfully prevented any serious debate about the scale of poverty and inequality in Britain today by skilfully promoting divide-and-rule. The rhetoric deployed has deliberately sought to create hostility towards the poor and the unemployed, among those in work, but who are often struggling on low-pay themselves. Hence the binary opposites enshrined in Ministerial rhetoric - workers vs shirkers, strivers vs skivers - and the repeated use of the phrase 'hard-working people'. All of this has been successfully invoked to ensure that the frustrations and financial hardships of the working population have been directed against the poor and the unemployed, rather than against the rich and Britain's plutocracy.

    Finally, any criticism of such poverty and inequality is immediately discredited by allegations of 'the politics of envy' or of being 'anti-business' or opposed to 'wealth-creation'.

    So it goes on!

    Pete Dorey