Why the new British Conservative PM is talking inequality   12 Jul 2016

Article - Max Rashbrooke

Why the new British Conservative PM is talking about inequality

Theresa May will soon be Britain’s second female prime minister, the first having been, of course, Margaret Thatcher. But if promises mean anything, May’s rule will strike a very different note to that of the Iron Lady.

In a major speech yesterday, May honed in on one key theme: an economy “that works for everyone”. It was strikingly like the language that the former British Labour leader, Ed Miliband, used in last year’s election campaign, as he put inequality front and centre of his – unsuccessful – political pitch.

May highlighted what she called a range of “injustices” – lower life expectancy for poor people, racism, sexism, and so on – but also the precariousness of life for the “ordinary, working-class family”, whose job security is minimal and who are barely keeping ahead of the bills.

Now, one might reasonably be sceptical about May’s promise to tackle these problems. Recent Conservatives don’t have a good record on inequality: income and wealth imbalances soared under Thatcher, and while the John Major years were more temperate, under David Cameron there has been a rhetorical and practical assault on welfare recipients, with sanctions, benefit cuts and the hated bedroom tax leaving over 1 million Britons reliant on foodbanks.

But May has strengthened the case for being taken seriously by laying out specific policies she would introduce – and again, she appears to be stealing Labour’s clothes. Noting that chief executive pay has more than trebled in the last two decades, even though the stockmarket has barely moved in that time, she attacked “an irrational, unhealthy and growing gap between what these companies pay their workers and what they pay their bosses”.

To address that, she promised binding shareholder votes on corporate pay, publication of the ratio between a CEO’s pay and the average company worker’s pay, and employee representation on company boards. These are all things that leading left-wing figures like Will Hutton have advocated, albeit none of them will make a major dent in inequality.

On tax, she copied the US Democrat Elizabeth Warren, saying that individuals and firms had to pay tax because they relied on public infrastructure: “No individual and no business, however rich, has succeeded all on their own. Their goods are transported by road, their workers are educated in schools….” And so she promised a crackdown on corporate tax avoidance. Elsewhere there were plans to tackle big monopolies and have more enterprises run as mutual, with employees having a say in how they operate.

What does this mean? Perhaps that, even though Labour parties the world over are struggling to get elected, the tidal wave of anger over inequality is now so towering that no-one can ignore it, and even Conservative politicians have realised they have to address it.

There is a major caveat, however. May was very careful to say that her government would put itself “completely, absolutely, unequivocally at the service of ordinary, working people”, which, from an inequality point of view, is to be welcomed – except that it says nothing about people on benefits. (Of course, they often are ‘working’ unpaid, in many ways, but that’s not what May meant.) Those are the people who have suffered most under the government May has been part of for six years, and the signs are that they will keep suffering.

Sadly, this is a restatement of the old divide between the deserving poor – in this case the working poor – and the underserving, those on benefits. No-one, in either of the major parties, in the UK or here in New Zealand, has much interest in countering the continual stigmatisation of beneficiaries. And so while May said she will ensure that “everyone can share in the country’s wealth”, the truth is that she didn’t quite mean it.

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