The Resolution Foundation warned that declining living standards for many British families were threatening levels of inequality not seen since the days of Margaret Thatcher.
A combination of a wage squeeze, welfare cuts and price hikes after the fall of the pound were hitting British families hard – leading to an anti-poverty think tank to warn that Theresa May had to maintain her pledge of helping the poorest people in the country. The Resolution Foundation predicted that, between now and 2020, incomes for the poorest would fall by 2%.
At the same time, wealth is booming at the top, the gap between the rich and poor is stretching, and corporate power is mushrooming in the face of declining workplace conditions. The economy is stacked firmly against the worker and ordinary households, tightly pressuring family budgets, whilst at the same time the wealthiest are seeing their earnings increase.
It’s that perhaps which infuriated many working class people who were previously Labour voters to vote for Leave. The benefits of globalisation have rarely permeated through the entire country, concentrated in pockets instead. The sharp soar in inequality is a reminder that this is an argument that Labour abandoned to their detriment. Embracing the free market too openly without attempting to change some of the economic structures was only going to last so long for the party. The discontent that now envelops much of the country that once voted Labour shows us that this party must always put the argument against inequality at the heart of its message.
That did not happen enough and, frustratingly, Theresa May has swooped in and claimed the mantle. Where she is angling at is where Ed Miliband sniffed and poked at, arguing for the need to closely regulate excessive corporate power and shift more control back to households, to ensure that wages were a means of living and not simply surviving. Miliband was onto something, but he never fully embraced it. Whether it was anger over energy prices, tax avoidance, poverty wages, failing private rail companies, declining NHS standards or a crippling private housing sector, Ed Miliband had set the party on the right direction.
Labour did not lose because of its ideas in that time, but because of its failure to express it with clarity and conviction. Leadership, communication and style matter hugely; something David Cameron embodied and something May exhibited falsely until this fiasco with Donald Trump began unravelling.
The post-mortem after Miliband’s defeat showed a deeply troubling narrow-minded ignorance within parts of the party that eventually manifested itself in Liz Kendall. They spoke about aspiration as if it was something only the middle classes understood. They spoke about helping those who want to do well in life as if those at the bottom had no understanding of that impulse. And they spoke about inequality as if it only affected low-income households, not realising that inequality has hugely affected middle class households too. A unifying message set around policies to help both low and middle income households should have been explored but instead the party warred with itself, talking as if inequality was a losing argument.
It never has been and never will be. The frustrations about economic injustice felt by Corbyn supporters are felt by the rest of the country. Anger towards immigration is anchored in the sense of frustration that people have lost control of their own lives: pressured by the declining housing options, the wage squeezes, insecure unemployment and pressures within the NHS.
But Labour, in Corbyn and Miliband, have produced two messengers inept at delivering the message. May’s positioning in Keynesian economics shows that even the Tories are aware of the country’s increasing bitterness at the growing issues at the bottom. For Labour, whoever they produce next, has to be someone who does not ignore the issue of inequality.
Every policy issue and message has to be tied to it: wages that trap people in poverty creates inequality: it’s bad for society and the economy as it creates growing welfare demand and stifles economic growth. Uncontrolled rent prices simply leads to rogue landlords being subsidised through the housing benefit, costing the taxpayer needlessly. The private rail companies are failing so poorly that it would be more efficient to actually run them in the public sector. Millions of working families are still relying on food banks. Tax avoidance is running in the high billions and is costing the Treasury unbelievable sums of funds that would be a welcome boost to the NHS and state schools. It’s also extremely unfair in the spirit of competition to small and medium-sized businesses.
These are issues that are angering people greatly and, for Labour, linking it back to inequality and how it hurts the economy is crucial. A society trapped in poverty cannot spend and the economy therefore cannot grow and compete. Inequality simply means those at the bottom fall ever behind and need a bigger dip in the public purse each time to help them. If people can feel that their eroding living standards are causing the poor economic performances – rather than immigrants and benefit scroungers – Labour can quickly reassert themselves within the political battlefield.
My worry is the next Labour leader will be someone all too willing to compromise over immigration without understanding what is driving those grievances. Labour is made up of sects and outside the soft left camp, everyone else seems to be ideologically blind. Corbyn supporters cannot admit New Labour’s considerable achievements while the New Labour supporters cannot admit that many of our failings in government from 1997 to 2010 created a gap for far-right populists to rise. It’s a reflection of social democracy’s failings across Europe, not just Britain.
Labour needs to firmly remember that inequality is sparking the anger, and then find a leader who is capable of offering the solutions within a likeable style that many did not see with Miliband and do not see with Corbyn.