Because more equal societies work better for everyone

A Tipping Point? Inequality Seizes Centre Stage

Thursday, 21 July, 2016

The past few weeks have seen significant political upheaval. Not only has the country voted to leave the EU, but we now have a new Prime Minister, and a leadership contest within the main Opposition party. 

You'd be forgiven for wondering where inequality fits into all this, and whether politicians will take their eye off the ball to focus on other concerns. But amidst this turmoil have been some encouraging noises from key political figures, from a range of parties. 

Theresa May last week outlined a commitment to reduce executive pay, put workers on boards, and publish pay ratios - all welcome steps that would reduce inequality, and proposals the Equality Trust has campaigned for. 

Owen Smith, who is contesting the Labour leadership, last week announced plans to rewrite the party's Clause 4 to include inequality reduction as a key aim. Again, something we called for in our Inequality Test, for all political parties to commit to measure their policies against their effect on inequality. Jeremy Corbyn meanwhile suggested today that inequality was the first of five new social ills he would commit to tackling. 

We also spoke at last weekend's Social Liberal Forum, where Vince Cable gave the annual Beveridge lecture, and talked of the need to tackle executive pay. He also championed new forms of business ownership model, like social enterprises, as a way to tackle inequality.

Alongside these comments, both the Green Party and the SNP have repeatedly talked about the need to reduce inequality. 

So why is there such political consensus on the need to tackle inequality? The obvious reason is the fallout from the EU referendum, which has sadly shown just how divided our country is. One of a number of drivers of this has undoubtedly been inequality, and the so called 'left behind', those who feel that they have not benefitted from economic growth, while others have. Some have suggested this is more to do with concerns over employment opportunities i.e. a lack of jobs and security, rather than a concern with inequality, but as polling from PwC has shown today, there is a strong correlation between the two. 

The simple truth is that a country as unequal as ours is not just imperfect, it is practically ungovernable. How do you develop coherent policies for people so separated by their economic circumstances that they may as well be living on different planets? Extreme inequality is not the basis for a cohesive, happy, healthy society, and it is why politicians from all sides are rightly acknowledging it as a problem in dire need of solutions.  We are all too aware that words are not deeds, and that until action is taken, there is little to truly celebrate. But we should be encouraged that so few of our politicians and business leaders are now willing to openly dismiss the need for greater equality. 

Over the coming months the Equality Trust will be developing a major work stream to push for action from politicians and businesses. We will be working with businesses, investors, politicians and workers to campaign for business practices that give everyone a stake in, and a say at, their place of work, and that build a fairer and stronger economy that benefits everyone.

Our first step will be to call for a Pay Ratios Bill to ensure large and medium sized business are legally required to publish their pay ratios. This is a key measure to provide greater transparency on pay inequality, and to showcase those companies implementing fair pay practices. 

There's everything to play for and your support has helped us get this far. We hope you'll continue to support our work to build a society we can all be proud of. 

John Hood

Acting Director, the Equality Trust

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