PROSPERITY AND WORK

RESPONSE TO PARTNERSHIP IN POWER SECOND YEAR CONSULTATION:

1. CHRISTIAN SOCIALIST MOVEMENT (CSM)

1.1 CSM is a movement of Christians with a radical commitment to social justice, protecting the environment and fostering peace and reconciliation. CSM believes that ‘loving one’s neighbour’ in the fullest sense involves struggling for a fair and just society, one in which all can enjoy the ‘fullness of life’ Jesus came to announce.

1.2 CSM is proud to be affiliated to the Labour Party and engages fully with the Party at all levels. Members are active locally in their CLPs and CSM sends delegates to Party Conference each year. At the Party’s invitation we organise the official Conference service and we also run a high-profile fringe programme. We currently have some 50 members in the Lords and Commons, including current and former Cabinet members and the Prime Minister. CSM members pledge to work in prayer and political action for the values of Christian Socialism. Our values form the basis of our response to this consultation.

2. PREAMBLE

2.1 CSM welcomes the massive improvement to their quality of life that the majority of people living in the UK have enjoyed since Labour came to power in 1997. Believing in the intrinsic value of work, in society’s responsibility to protect its most vulnerable members, and in the importance of strong and stable families, CSM endorses wholeheartedly Labour’s achievement of enabling tens of thousands of people to find gainful employment, of increasing family incomes through tax and benefit measures and of lifting millions of pensioners out of poverty. We also welcome the introduction of a minimum wage, the Child Trust Fund and other initiatives which have enabled so many to enjoy a greater degree of dignity, security and economic freedom than under Tory administrations concerned only with the welfare of the few not the many. We welcome the broad proposals set out in the ‘Prosperity and Work’ consultation document and will continue to work to ensure that Labour achieves a historic fourth term and the opportunity to build on its past successes. We especially encourage the Labour Party to ensure that the Government stays on course to meet the target of eradicating child poverty in the UK by 2019.

3. THE GAP BETWEEN RICH AND POOR

3.1 Among the objects that CSM members pledge to work for is ‘social justice, equality of opportunity and redistribution economically to close the gap between the rich and the poor, and between rich and poor nations’; and our main concern about the economic transformation of the past ten years it is that its benefits have not been evenly spread, that the income difference between those at the top and those at the bottom has widened, and is continuing to widen, at an alarming rate.

3.2 Authoritative studies have shown that, over the last ten years, the incomes of the very richest have risen at twice the rate of those on middle incomes. While six-figure salaries and seven-figure bonuses are not unusual in some sectors of the workforce, others struggle to keep their homes warm in winter or live in temporary accommodation because they cannot afford to get on the property ladder and there is a shortage of affordable rented housing. Another indication of the widening gap in our society is that, whereas in the 1980s a chief executive of a FTSE 100 company earned around 25 times the ‘average’ salary, in the 2000s it is close to 120 times.

3.3 One of the cruellest paradoxes of being poor in a wealthy society is that those with the least end up paying the most for basic goods and services. Research by Save the Children recently revealed that the poorest pay a ‘poverty premium’ of up to £1000 a year, in higher gas and electricity bills, over-priced (and poorer quality food) and extortionate interest rates. It is also still the case that the bottom fifth of workers pay a higher proportion of their income in tax than the top fifth.

4. THE SOCIAL CONSEQUENCES OF INEQUALITY

4.1 There is now incontrovertible evidence to demonstrate a causal link between income inequality and societal breakdown. Surveys comparing existing market democracies and individual states or regions within these countries show that where income differences between rich and poor are smaller, community life is stronger. It follows that inequality damages everyone and that a new “Equalities Policy” would be in the interests of everyone. We urge the Labour Party to adopt this principle as one that needs to be pursued, accepting that there is inevitable tension involved in seeking to create a fairer society which is also economically successful, but that sustainable success as a nation depends on reconciling those goals.

‘There must come a point at which the scale of the gap between the very wealthy and those at the bottom of the range of income begins to undermine the common good. This is the point at which society starts to be run for the benefit of the rich, not for al its members.’
The Common Good – report by the UK Catholic Bishops, 1997

4.2 Research by Professor Richard Wilkinson of the Department of Social Epidemiology at the University of Nottingham Medicine School - which has been widely published and was presented by Professor Wilkinson at a CSM fringe meeting at Party Conference in September 2007 - shows not only that people are more likely to trust each other in societies where income differences between rich and poor are smaller, but that there is less violence; that homicide rates are lower; that health is better and life expectancy longer; that prison populations are smaller; that birth rates among teenagers are lower; that levels of educational attainment among school children tend to be higher; and there is more social mobility. In all cases, where income differences are narrower, outcomes are better.

4.3 To take just one of these factors, the last, it should be a cause of concern that today’s under-40s are less socially mobile than were their parents. The Labour Party is, quite rightly, committed to ‘unlocking the potential’ of all in the UK, to developing everybody’s ‘X Factor’, yet the biggest barriers to developing potential and upward mobility are poverty and inequality.

While it is clear that inequality is socially corrosive, it is equally clear that policy can dramatically improve the psychosocial welfare of populations. How people get on with each other is crucial to the quality of life for all of us. The first step in improving matters is to gain a wider popular understanding both of the way many social problems are rooted in relative deprivation, and of the benefits which greater equality would bring to us all.” Richard Wilkinson

5. POLICIES TO TACKLE INEQUALITY

5.1 So while we welcome the fact that people at the lower end of society are now materially better off than they were ten years ago, and that our society is more prosperous overall, we are concerned that this has not, in itself, guaranteed the well-being of society as a whole or furthered the ‘common good’. Given that gross inequality can be proven to be a factor in weakening the cohesion of society and in holding back the development of people on the lowest incomes, we strongly urge that the issue be acknowledged in Labour’s next manifesto and specific measures included to address it.

5.2 These measures could include:

5.2.1 extending the commitment to eradicating child poverty to a commitment to eradicate poverty across the generations by 2020;

5.2.2 establishing a commission on inequality to examine the costs and impacts of growing wealth inequality and identifying remedies that would attract broad pubic support;

5.2.3 improving the take-up of existing benefits (this alone would take 500,000 pensioners out of poverty);

5.2.4 ensuring that incomes – especially those of people on the minimum wage – rise in line with average earnings so that inequality does not grow and those at the bottom do not get left behind;

5.2.5 ensuring that at least one third of the 3 million new homes built by 2020 are for social rent;

5.2.6 ensuring that there is a significant increase in co-ownership (shared equity) in order to make it easier for people to move between the social rented sector and home ownership;

5.2.7 ensuring that the adaptations required for the homes of disabled people are considered before new homes are built;

5.2.8 ensuring that the decent homes standard applies to all homes, in particular those in the private rented sector;

5.2.9 the introduction of incentives, via the tax system, to develop a stronger culture of philanthropy;

5.2.10 further measures to outlaw extortionate lending and the activities of ‘loan sharks’;

5.2.11 better investment in dentistry to ensure that all areas are covered;

5.2.12 giving shareholders more legislative power to restrain boardroom pay.

5.3 There is strong evidence to suggest that such measures will prove popular with the electorate. For example, 75% of respondents to a Guardian/ICM poll published on 20 February 2008 acknowledged that ‘the gap between high and low incomes is too wide in Britain’, the highest ever percentage found by ICM. Only 15% thought that the gap was ‘about right’. Leading Cabinet members have also expressed concern about economic inequality and pledged to tackle it – for example, Harriet Harman at a deputy leader hustings organised by the Christian Socialist Movement. These measures will help fulfil such pledges.