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An academic team, reviewing the
1964-70 Labour governments, concluded in 1972: "Considerable poverty
remained . . . It is impossible not to feel a sense of dismay." Yet
under Harold Wilson, the poorest tenth of Britons got a 29 per cent rise in
their real incomes (against a 16 per cent rise in median UK income) and the
country saw a sharp fall in inequality (according to the Gini index, the
internationally accepted measure). By 1979, after another dose of old Labour
rule, inequality was at its lowest level ever and only 8.2 per cent of
Britons were deemed to live in poverty. So much for the argument that those
dinosaurs never stayed around long enough to make a difference. Contrast the
position in 2003, as shown in a new Joseph Rowntree Foundation report. The
poorest are only 10 per cent better off than they were in 1997 (median income
is up 17 per cent), inequality has risen sharply, and more than 18 per cent
still live in poverty.
For two reasons, this is not as negative a verdict on new Labour as it may
seem. First, when it came to office, it followed governments that had striven
to widen inequalities for 18 years. They had created a culture that favoured
rewards for the successful, and dismissed the poor as responsible for their own
plight. It has proved hard to change that culture - in the same way, the
Thatcherites often lamented in the mid-1980s that it was hard to unravel the
mildly egalitarian and statist postwar consensus. But it is a measure of
Labour's success that an opposition frontbencher, David Willetts, has
committed a future Tory government to target not only absolute poverty, but
relative poverty.
Second, and more important, the employment market distributes rewards ever
more unequally - because of the decline in heavy manual work, the reduced
power of organised labour, and the increasing international mobility of both
capital and labour. A government bent on social justice, therefore, has to
work harder just to keep everybody in the same place and prevent the poor sliding
into greater poverty.
New Labour has done more than that: for example, child poverty, the most
grievous legacy of Tory rule, is down by a quarter on 1997, though still
twice what it was in 1979. Where ministers have set out to tackle injustice,
they have at least partially succeeded, refuting the argument that
governments can change nothing. But they have been selective in their
targets, echoing the Victorian distinction between the deserving and
non-deserving poor. If you live on income support, and you are neither a
pensioner nor a parent, life under Labour has gone from grim to grimmer. With
your benefit rises pegged to prices rather than earnings, you now get £8 a
day to live on after rent, £6 if you're under 25, less than £5 if you're
under 18. This is social exclusion with a vengeance.
New Labour's attitude is simple: adults should find jobs, which are now
plentiful, and the state's priority is to help only where children are
involved or where people are too old or too ill to help themselves. In any
case, ministers may say, the benefit system has to command public support:
children and pensioners evoke sympathy, oafish young men don't. But today's
childless poor are often tomorrow's parents and they will pass their
accumulated disadvantage to their children. This applies most obviously to
the pregnant under- 25-year-old who will have to live on that £6 a day while
her child's health is directly dependent on her diet. Moreover, many of the
single unemployed turn in desperation to crime, making things worse for
families in poor areas. Idling on benefit is bad, but mugging, housebreaking
and drug-pushing are worse. The childless poor are not so numerous as to make
their better treatment prohibitively expensive. They are often the victims of
the child poverty that flourished under the Tories and which, despite
Labour's efforts, continues at significant levels now. If it is right to stop
children falling into such poverty in future, why is it wrong to help those
who suffered it in the past?
It is still unclear whether new Labour, in the historical record, will appear
as a government that largely accepted, but significantly modified, the
neoliberal consensus that marked the Thatcher years or whether it can create
a fresh and lasting alternative consensus. The answer may well depend on
which of the Downing Street neighbours finally comes out on top. But it is
precisely because wider economic forces now favour inequality that the need
for a strong state, egalitarian, interventionist, even (dare it be said) socialist
in outlook, and openly so, is greater than ever. A manifesto commitment to a
50 per cent tax on top incomes in the third term would be a good statement of
Labour's future intentions.
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(written
jointly with Peter Wilby)