The Good, the Bad and the Average – Which Policies from Conference Season Might Reduce Inequality?

As usual, political party conference season saw plenty of thunderous, heartfelt statements made on the need to reduce inequality and build a fairer, more equal society. Hands were clenched in furious indignation, looks were stern, and words were said, lots of them.

Tim Farron said “inequality…demeans us collectively, damages us economically and disadvantages us all”. Jeremy Corbyn suggested his leadership will be “unapologetic about reforming our economy to challenge inequality”. And David Cameron said that his party could not accept that in the UK “the salary you earn is more linked to what your father got paid than in any other major country.”

But did any of the policies announced match up to the rhetoric? No, not really. Aside from the fact that most were a collection of rehashed and reheated policies, they were also, by and large, woefully inadequate in reducing inequality.

Let’s start with the worst.

For some Conservatives, the success of George Osborne’s last Budget may already feel short lived. Cuts to tax credits were initially seen as a canny move when combined with the ‘rabbit from the hat’ that was the announcement of a National Living Wage. But with The Sun, on the eve of Conservative conference, launching a campaign to have these cuts reversed, the issue has threatened to overshadow events in Manchester. In fact, more than one commentator has warned that tax credit cuts could be this Government’s Poll Tax.

Since their announcement in the last Budget, analysis from the Institute for Fiscal Studies has found that 13 million people will be adversely affected by tax credit cuts, losing at least £260 a year, and in many cases much more. Clearly, this is a policy that is likely to have severe repercussions for poor and middle-income earners alike, and one whose only likely effect will be to increase inequality.

At Labour conference, the party’s new leader declared himself committed to reducing inequality. But some policies may be more effective in achieving this goal than others. His reiteration of a commitment to abolish tuition fees is likely to be a popular one. But as fees currently stand, such a measure would only increase inequality. With the majority of students going on to earn significantly more than the average wage, from wealthier backgrounds, providing them with a free pass would effectively see a large transfer of public finances from the poor to the better off.

Of course, if free higher education saw an upsurge in participation from students from lower-income backgrounds, the policy could be a success. But this is not yet the experience seen in Scotland.

Then there’s the average.

One of the more popular policy announcements at conference is likely to be Labour’s first official policy under its new leadership – the commitment to renationalising the railways. But although it may mean less well-heeled executives in private train companies receiving inflated salaries, on its own it is a measure unlikely to reduce inequality significantly.  

A more important and necessary measure would be an overhaul of our system of transport subsidies, which currently works by channelling public finances to rich commuters travelling by train. For anyone who has suffered the vagaries of a daily commute, including the astronomical costs, renationalisation may seem like just the ticket. But while transport subsidies are so hopelessly regressive, there’s a lot more to be done for it to rebalance us towards a fairer system of transport.

What about the good policies?

OK, we’re really scraping the barrel here, but one of the more encouraging announcements was George Osborne’s commitment to set up a National Infrastructure Commission. A number of respected economists have said that infrastructure policy has to play a key part if economic inequality is to be reduced. However, even here we must heavily caveat any praise. As we commented this week , it is also possible to build infrastructure that will disproportionately benefit richer people and richer regions. So the devil will be in the detail.

A nice turn of phrase, a slick sound-bite or two – these may be the characteristics of modern politics, but as the saying goes ‘you can’t fool everyone, all the time’.

Over 80% of the public understands that the gap between the rich and poor is too large. When those people see policies promoted, and adopted, that actively widen that gap, they take notice. When those on low and middle incomes see their lives becoming more difficult, see society hardening, feel the insecurity and uncertainty of their futures and their children’s – they recognise the limitations of empty rhetoric.

People are not blind to the stark contrast between their lives and those of the ‘elite’. Nor are they indifferent to the extreme levels of inequality seen in our society. Politicians regularly talk of taking their opponent’s territory. If they really want to do so, and appeal to voters on the right, centre and left, they need to offer clear, honest and achievable ways to reduce inequality. 

John Hood, Media and Communications Manager