In 1938 the top 10% of the population took 34.6% of the national income. During and after the war that share fell significantly. By 1979 it stood at only 21% but then it started to rise again to 31% in 2009.
Official data shows that it has remained relatively static since. Which is worrying enough as it means that we’ve begun to accept as a nation that it is fine for us to live within a deeply unequal society. The official data does, however, exclude income hidden from the tax people and channelled through obscure overseas bank accounts. That is the only reason the share of the very rich hasn’t continued to rise. The data has been obscured by a massive increase in overseas assets owned by the very richest. The deliberate concealment of income and wealth has produced a stark contrast between the lived experience of people in the streets and the data. Inequality is still getting worse it is just no longer being accurately measured.
There is now a divergence in lifestyles and experiences that has become exceptionally damaging. If you live in the back streets of Stoke or the neglected estates of Sunderland you are not going to be bumping into any of the ultra-wealthy very frequently. More damagingly, and perhaps more significantly, the children of our privately educated wealthy elites rarely get to meet anyone out of their extremely narrow social circles. The consequence is that we have politicians like Rees Mogg, Boris Johnson and David Cameron who lack even the remotest understanding of what life is like if you are trying to scrape a living on the minimum wage in Bradford.
Only someone with complete lack of knowledge of the lived realities of others could have introduced a Universal Credit system and thought it might be OK for it to make payments once a month and for it to take weeks for the first payment to arrive. Only someone completely out of touch like Rees Mogg could complain about a nanny state whilst enjoying the benefits of having his seven children get their nappies changed by a nanny and never once getting his own hands dirty.
These days even the middle and the working classes often seem to live in separate communities that might as well have gates around them. Try getting your child into a good school if you live in the wrong area. Try going to an A & E department on a Saturday night in the wrong town. Try getting a home of your own without family financial support.
One of the very worst aspects of this is the divorce between the way people earn a living in the London financial bubble and what happens in the rest of the country. In a world that was gradually improving and becoming happier, more secure and more sustainable you don’t normally find finance industry located in one city dominating an entire nation’s economy to quite the extent that it happens in the UK.
We therefore desperately need to start the long and hard process of rebalancing the British economy. Meaningful and effective regional policy in the UK just doesn’t exist outside of EU measures like the European Social Fund. It needs to become a dominant force in our thinking. Any politician who bleats on about honouring the referendum vote of the ordinary people of Stoke ought to be challenged to answer a few very simple questions. Exactly how much government investment money have you transferred from London to Stoke, to Sunderland? What exactly are your proposals to regenerate the inner city in Bradford? How exactly do your proposals for schools or the NHS redirect spending towards the needs of neglected communities?
It is important to be clear at this point. I do not believe that we can bring the world of large factories, powerful trade unions and deep cast mines back. Nor do I want to. The world is changing very rapidly and unless we equip our more neglected communities to cope with that change they will decline even further. It requires forward planning to invest in local science parks, business start ups, technical colleges, creative industries and software design companies. It also takes serious money from government to provide the land, the infrastructure, the education facilities and the leadership. To attract people to want to live in cities like Bradford it takes targeted and co-ordinated action between Departments and tiers of local government responsible for housing renovation, council house building, school improvement, health care, universities, and the business community.
Relying on the private sector to fix such a stark imbalance between regions is a naïve and failed strategy. It is blind faith in that solution that has sucked so much of the UK economy into London and its surroundings and left us so very badly dependant on one highly insecure financial services sector. China has utterly transformed its economy for the better (with of course some major problems) over the last 30 years by using the power of the state allied to private enterprise. Planning is not a dirty word. Having a plan is usually a very effective strategy. Not thinking that you need one is not. That is like saying that consciously thinking about the future is a mistake.
We cannot trust to luck to address the genuine and utterly justified anger within the working classes in our neglected towns and cities. It is going to take thought out co-ordinated action. That requires serious grown up thinking about the future and a proper plan to rebalance our economy. If you want to find the opposite of that read the current government’s industrial strategy. There you will find a lot of commitments to build clumsy nuclear power stations and to go hell for leather for fracking. You will find a few nice words but not much action about adopting new technologies. You will find little or nothing about regional policy and even less sign of genuine money to support that transition. Spin about a northern powerhouse and schemes to reorganise local government yet again via the creation of mayors replace serious strategic thinking.
I have criticised Corbyn enough on other issues so it is worth stating that I think he genuinely does understand the need for regional policy. I have less confidence that he properly gets the fact that it will have to be forward thinking and built around small business and flexible low carbon technology but owt is better than nowt.
It has become a commonplace to assert that the white working class voted Brexit because it was fed up and wanted change. If we had spent the last two years trying to develop the towns and cities that were so neglected that they voted out as a howl of rage then we might have responded effectively to some of their very legitimate concerns. As it is all we have delivered is even more dis-satisfaction. We can and must do better and make Britain a more equal and a more prosperous society.