The Equality Trust 18 Victoria Park Square London, E2 9PF
Since our last edition of Among Equals the UK has undergone significant political upheaval. The Scottish referendum reaffirmed our political union, but shone a light on the public’s anger and disillusionment with our political and economic systems, both sides of the border. This discontentment hasn’t built overnight, and it hasn’t come from a simple mistrust of the political class. Inequality was a theme raised time and again during the referendum, and it’s easy to see why. The predicted ‘Year of the Pay Rise’ has been anything but. For some, stagnating or even falling wages might mean a holiday put on hold, but for many others it means being unable to pay the rent, heat a home or pay for groceries.
At the same time, a tiny number of people at the top continue to see their wealth swell. In May the Sunday Times Rich List found the richest 100 people had seen their wealth increase by a staggering £40.1bn. That’s enough to pay the energy bill for all 26.4 million UK households for over a year.
We know this is wrong; it offends our most basic sense of decency. But new research has now shown the extent to which extreme inequality also harms the economy. Later in this release, Tim Stacey, our Senior Policy and Research Advisor, explores some of this research and how it is shaping our understanding of inequality. If the moral argument for extreme inequality was lost some time ago, the intellectual ground on which supporters of inequality have stood is now also shrinking fast.
The extent of inequality makes for grim reading, but there are some more encouraging signs. Extreme inequality is a topic that is now almost impossible to ignore. In our last edition we spoke of how leaders from Barack Obama to the Pope had talked of the need to address inequality. Six months on the list of prominent voices has grown further. In fact, even some of the super-wealthy have recognised the dangers of rising inequality, including Bill Gates and Rupert Murdoch.
One thing has remained constant over the past six months – the importance of our local groups and supporters to our work. Without them we simply could not function. Later in this publication Bill Kerry, our Supporters and Local Groups Manager, shows the incredible work the groups are undertaking, and provides details of how you can join or start your own. For anyone who would like to support us meanwhile, please visit our website here.
Our next Among Equals will come before the next General Election, and there is a huge amount to be done between now and then. But with your continued support we can start to reduce inequality and make the UK a country that looks after the many and not just the few.
Director, The Equality Trust
The Equality Trust: Progress to date
Since our last Among Equals the Equality Trust has continued to raise awareness and understanding of inequality. In June we published two reports on tax. The first, Unfair and Unclear, showed how the poorest pay a higher proportion of their income in tax than the richest, how few people are aware of this, and how great the public support is for a more progressive tax system. In a second report, Course Correction, we showed how a return to a 50p top rate of income tax rate could help to reduce extreme inequality without harming the economy.
In addition to these reports, we also produced two briefing notes. The first, Subsidising Unfairness, looked at the pay inequality in the “public services industry”: the private sector contractors providing public services. The second, A Divided Britain, focused on the problem of regional inequality in the UK.
Over September’s political party conference season we analysed the likely effects of parties’ tax proposals on people across the income spectrum. Our analysis of UKIP policies in particular was featured in the Guardian and the Daily Mirror. Politicians across the political spectrum have talked of the pernicious effects of inequality, but continue to propose regressive tax policies that will benefit the rich more than anyone else. Our Fairer, Stronger Economy report outlined a number of policy proposals that could help to reduce inequality, including the reintroduction of the 50p top rate of income tax, a mandatory Living Wage, a progressive property tax to replace council tax, and accredited vocational courses included in the Student Loans System. Most importantly, it called for all political parties to adopt an explicit goal to reduce inequality. This has been shared and discussed with each of the main political parties and provides a starting point for reducing extreme inequality.
In October we produced updated analysis which found a worker on the national minimum wage would need to work 342 years to receive a year’s average pay for a FTSE 100 CEO. In the same month we also held Inequality Today, our annual event looking at the causes of inequality and solutions for its reduction. This year our keynote speakers were Lord Adair Turner and Katharine Round, Director of the forthcoming Spirit Level documentary.
Amongst all this, we’ve moved office from Southwark to Bethnal Green, and also taken on new staff. Tim Stacey has moved up to become our Senior Policy and Research Advisor, and Lucy Shaddock has started as our Policy and Campaigns Officer.
It has been a busy year, and we are now entering a crucial stage. Over the coming months we will be putting real pressure on policy makers, a focus that will go beyond the next General Election. We will be lobbying MPs and contacting parliamentary candidates to make sure inequality reduction is a key theme not just nationally and in leader’s debates, but in all localities throughout the UK. To stay informed of our activity, please sign up to our monthly newsletter.
Media and Communications Manager
What We’ve Learnt
Over the last year a wealth of new research has been released showing the damaging effects of extreme inequality. In the past much of this would have focused on its social effects and the moral argument for reducing inequality. But in recent months research has shown us something new – that inequality not only damages society, it also damages our economy.
In March the IMF released a report showing that countries with lower levels of inequality grew faster than countries with high inequality and concluded that redistribution may be a helpful tool to increase growth. The OECD also suggested inequality will be a major challenge to growth over the coming decades. These global institutions are hard for those defending inequality to ignore and they show that the issue of extreme inequality is now a challenge of global concern.
Despite the importance of these reports, by far the most significant piece of research this year was Thomas Piketty’s Capital in the Twenty First Century. This collected a huge database of international data to explain historical wealth inequality, and predict that a dangerously wide wealth gap would return if nothing were done to contain it. Piketty’s Capital saw inequality once again move from the realm of academic journals to the top of the Amazon best-seller list.
The two main solutions to reducing inequality suggested by Piketty were a global wealth tax and an increase in taxes on those on very high incomes. Unfortunately much of the debate surrounding these ideas is obscured by untruths about the disproportionate tax burden faced by the wealthy. Our own research published in June found that those on low incomes in fact pay a much greater proportion of their income in council tax and certain other taxes than people on much higher incomes. Polling conducted with Ipsos MORI confirmed that not only do most people grossly underestimate the amount of tax paid by those on low incomes, but also that 96% of the public want the tax system to be more progressive.
Other myths were also debunked. An Equality Trust report this year challenged the lazy assumption that raising the top rate of income tax would result in dire economic consequences for the UK. In fact, we found that increasing top tax rates reduced inequality without harming the economy. Again, our polling found that a majority of voters for all three of the UK’s main political parties support increasing the amount of tax paid by the top 1%, further supporting the case for raising the top rate of income tax.
So what about the main political parties, are they following the evidence? Sadly it seems, not yet. Proposals for a mansion tax are welcome but fall well short of the ideal of reforming council tax . Meanwhile proposals to raise the income tax and national insurance tax-free allowances will help rich households and not the poorest. Clearly, much more needs to be done for policies to not only follow the evidence, but to actually reduce extreme inequality rather than increase it.
Senior Policy and Research Advisor
People Power – How You Can Help Reduce Inequality
It’s always been our belief at the Equality Trust that a social movement is needed to bring about a better and more equal UK. This is why we have always tried to combine the best and latest evidence for the benefits of reducing inequality with active support for those wishing to take action. If policy- makers are going to move on the issue of inequality then it’s far more likely to happen if a large number of highly motivated, well-informed people are clamouring for it in a sustained way. The recent Scottish independence referendum serves well as an example of people power and the motivating force of a message promising greater equality and fairness. Both Yes and No campaigns sought to garner support around the prospect of a fairer, better Scotland.
We recognise that energy here at the Equality Trust. The desire for a better and fairer society runs deep within our supporters. For example, the range of activities that our affiliated local groups get involved with is truly impressive. Groups have successfully campaigned for a Living Wage to be paid by councils and local businesses and for council fairness commissions to be established; they have arranged public meetings with expert speakers, engaged with local employers over low pay, top pay and pay ratios; lobbied candidates at local, national and European elections; conducted research into local measures of inequality; run street and festival stalls to engage the public; investigated public attitudes to the idea of a Basic Income; and been involved in many, many more activities. The groups are also increasingly reaching out into their communities. They know that to really raise awareness and achieve change they need to make links and alliances with sympathetic groups of people, often those who are directly affected by inequality or those who work to alleviate its impact. So, links have been made with local faith groups, food banks, political parties, poverty-focused charities and NGOs, trade unions and co-operatives as well as progressive small businesses. This not only increases the strength and effectiveness of our affiliated groups, it also brings valuable new perspectives to bear on the work they are doing. But there’s always more to do. We need more groups and our current groups could always do with more members, so if you would like to get involved please check out our existing list of UK groups here. We also have international contacts and groups here. If there isn’t a group near you and you would like to start one, or if you have any questions, please contact me, Bill Kerry, at firstname.lastname@example.org or on 020 3637 0324 and I will be happy to help you get started.
Supporters & Local Groups Manager
The Equality Trust: Then and Now
Five years ago The Equality Trust was set up with a simple aim – to promote the findings of The Spirit Level, and the evidence that more equal societies do better on almost every measure that we value - health, education, crime, the list is almost endless.
In the five years since, much has changed. One unarguable development has been a surge in public interest and concern over inequality. Over the past five years the Ipsos MORI Issues Index has tracked public opinions on key issues each month. In 2009, an average of just 6% cited “poverty / inequality” as ‘one of the most important issues facing Britain’. This year the figure is 15%.
Despite this significant increase, establishing inequality as a priority concern with the public remains a huge challenge for us. That’s why making sure as many people as possible are reached through media, social media, events and direct messaging is so important for us.
Our profile in national print and broadcast media has grown substantially since 2009. We now see our research, analysis and comment on inequality on average once a week in national publications. We’ve talked to readers of the Daily Telegraph, Financial Times, Daily Express, Daily Mirror, Guardian, Observer, Daily Mail, New Statesman, and Huffington Post. We’ve been on the BBC and in regional news. We’ve even featured in Forbes magazine (for “affluent business decision makers”). From a standing start our social media presence has grown to include almost 9,500 likes on Facebook and 13,700 followers on Twitter.
We have expanded our research capacity to provide new polling, literature reviews and data analysis. This has allowed us to build a more complete picture of inequality and its effects. Organisations like Oxfam, the Trussell Trust, Church Action on Poverty, the Tax Justice Network and the New Economics Foundation, as well as political parties, have now used our research. Building coalitions with like-minded organisations and their supporters has been vital in building the case against extreme inequality.
But we also know that direct engagement with policy makers is vital if we want to see real change. Despite the popularity of The Spirit Level among politicians, The Equality Trust has had to work to build links with the parties. As a result of these efforts, earlier this year we were able to convene face-to-face meetings with prominent MPs, thinkers and backbenchers of the main political parties to discuss solutions for reducing extreme inequality.
In the coming weeks and months we face a huge task to move from rhetoric and understanding to action from businesses and politicians. But as the only organisation focused solely on economic inequality in the UK, the Equality Trust’s role remains as vital as ever.
Director, The Equality Trust
How You Can Get Involved
Donate to TET through our website: equalitytrust.org.uk/donate
Join an affiliated local group or set one up yourself - for more details visit:
Sign-up to our newsletter here: equalitytrust.org.uk/newsletter-signup
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Join our 9,500+ fans on facebook.com/equalitytrust
Visit our website: equalitytrust.org.uk
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The Equality Trust
18 Victoria Park Square
London, E2 9PF