Image: Fred Moon, Unsplash

Has Inequality Broken Democracy? Event Summary

With trust in politicians at an all time low and the democratic process distorted by inequality, how does our system keep running? What are the implications for our future? And how could we solve this? On 29 April, we hosted several speakers to discuss this and much more in our webinar Has Inequality Broken Democracy?

We heard from Dr Parth Patel, a senior research fellow at IPPR; Matt Chocqueel-Mangan, a voter advisory specialist who develops the Vote for Policies tool; Stuart Donald, a researcher into the impact of electoral systems; and Jez Hall from Shared Future. You can watch the full webinar below, or read on for a summary of the conversation.

Priya Sahni-Nicholas, a Co-Executive Director of the Equality Trust, introduced the webinar’s topic and the situation we face. 2024 is a year of democracy, with over 4 billion people around the world electing their leaders and making their voices heard – to an extent. Because, as she pointed out, in the UK and globally, trust in democracy and politicians is falling rapidly. In the UK, trust in the state has been eroded through scandals and crises, and our relationship with democracy is struggling as policy choices continue to favour the richest, while we struggle with a lost decade of austerity and the cost of living crisis. Studies and polls indicate that super-majorities of the public are worried about wealth and income inequalities and the impact on democracy, so it’s clear this is an issue that matters a lot.

Dr Parth Patel gave an overview of the UK’s democracy and how it is failing to represent the population. He and the IPPR are interested in the rise of populism, which they believe is down to people in the UK and elsewhere wanting to take over a political system that has allowed their living standards to stagnate. They argue it’s less a challenge to the idea of democracy and more to how it’s failed in practice and, while populism often effects the constitutional democratic arrangements we have, it’s not an enemy of democracy.

His first key question was why democracies have allowed economic inequality to rise and remain high. In a democratic system where one of the fundamental principles is political equality, and members of a society are supposed to have equal influence over a decision-making process, you’d expect decisions to fairly distribute the “winners and losers” of decisions. But if one group keeps winning because they have more power than someone else, that becomes a concern. Over the last 40 years, we’ve seen inequality rise and remain high, which Patel described as a puzzle in a democracy – why would you allow a small minority to profit so hugely while everyone else did not? As many people have demonstrated, public opinion has consistently called for more equality and more redistribution, but decisions have been made to encourage the opposite.

Patel showed several charts making the case that policymakers across the developed world were much more likely to make decisions in favour of the wealthy and highly educated, that the public are aware of this gap, and as a consequence many people outside the wealthiest groups don’t participate in the political system, believing that they are not listened to regardless. This forms a vicious cycle.

Why this happens is down to a few effects, he argued: the wealthiest are able to buy more influence over our system, decision makers are more and increasingly likely to be from wealthy backgrounds, and that people outside the favoured demographics are less likely to participate in political institutions or processes like charities, unions, lobbyists or political parties or even writing letters or joining protests. These gaps have been growing over the course of the late 20th and 21st centuries, he demonstrated, with gaps in age, income, education, class, home ownership and ethnicity widening at an accelerating pace. The gaps within political party membership are even more dramatic, he noted, with shrinking member lists concentrating even more power in party donors – the largest 10% of donations now account for over half of the Labour Party’s income, for example. With election spending limits dramatically increasing at this election, this allows money to have even more influence.

These factors all interact with each other, he said, but tell a general story about the UK’s rising inequality in wealth and power.

Matt Chocqueel-Mangan described the problem of poor representation in voting and voter advice tools as a way to help fix that. He introduced how the Vote for Policies tool he develops works: without algorithms, voters are asked to choose issues that they care about, then pick their favourite policy on that topic from the ones offered by the UK’s main political parties. At the end, the tool tells voters which parties the policies they picked belonged to. Matt argued this allowed voters to make much more informed choices about their vote – he noted that in fact, it was only when reading manifestos in 2019 that he realised that he’d been voting for parties that he didn’t agree with.

Tools like these can reach large numbers of people, and Vote for Policies expects around 1 million voters this year. And tools like these can also have an enormous impact: research from Kantar found that users of Vote for Policies were 35% more likely to vote, 50% were surprised by their results, and 20% of them said they were likely to change their original intended vote. This didn’t benefit any particular party; voters across the spectrum were equally likely to decide to change their support after this. However, 1 million users still only represents 2% of the electorate, so the goal is to put more information in the hands of more citizens. Creating a sense of confidence and agency in politics leads to greater participation, Chocqueel-Mangan argued, and Vote for Policies plan more collaborations and work to make these tools more accessible to more people to do exactly that.

One key finding is that voters using the tool, on average, select policies from many different parties. For example, if a voter chose to look at 6 issue areas, on average they’d pick policies from 3.5 parties as their favourites for that topic. This allows for a lot of misrepresentation, and makes the case for a voting system that can better take into account the various preferences of voters.

Stuart Donald then addressed exactly that issue: the problems of First Past the Post voting and the way that societies using Proportional Representation tend to govern in ways that better represent voters. Donald found that across the English-speaking countries, the FPTP systems used for electing governments had led to very different outcomes compared for the 11 most relevant north-west European countries that used PR. Countries using FPTP allow parties to win elections with minority shares of the vote, which Donald argued led to the exclusion of many important but more marginal issues from the political conversation. It also tends to winnow down the amount of parties that can reliably survive and compete to just two: a party of the haves and a party of the have nots. PR countries, he found, involved on average 6 or 7 different parties in their governments.

The impact of this means that in FPTP countries, only two coalitions of voters can really exist. Donald characterised them as a coalition that tended to want more spending and support, populated mostly by the have nots, and a coalition of haves that tended to want less. A problem emerges when one group is bigger that the other, which means they tend to dominate the democratic process. As a result, he argued, the Conservatives have won 8 out of the last 11 elections as minority victories. New Zealand under FPTP has a similar experience until they switched to PR.

Compared to countries with PR systems, inequality has increased dramatically in FPTP countries since the 1980s. Victories for progressive parties under FPTP have also been unable to reverse this trend towards inequality despite the strong mandates that FPTP gives them. As a result, other key indicators like health spending, life expectancy, or child mortality, are also much worse for the UK and other FPTP countries compared to PR countries.

Jez Hall finished the webinar with a discussion of participatory democracy. He argued that a key part of democracy is often overlooked: how people participate in their neighbourhoods and communities. Bringing democracy much closer to people in this way gives democracy stronger foundations, he argued. One key example is participatory budgeting, which first emerged in Latin America in the 1980s. Under this model, residents are encouraged to decide for themselves how sums of money are spent at community meetings, giving people real power over decisions in their areas, rather than relying on representatives to make these decisions for them. In an example in New York, people will brainstorm ideas in neighbourhood assemblies, then volunteers will develop ideas into real projects that could be done. A shortlist of projects will be developed in future meetings, before these are presented back to the local residents to vote on. It’s a way of saying that everyone who lives in a community has a right to decide how their lives should be, which empowers people in a way representative democracy often cannot. These sums of money that are decided on by the community are often small proportions of local government budgets, but can have a big impact. They’ve been tried in the UK and the Scottish government has committed to encouraging participatory processes across Scotland.

Hall argued that these processes encourage trust in the system, encourage participation in other political mechanisms, and therefore are good for the wider electoral system as well. In this way, he said, participatory systems can help close some of the inequality gaps that other speakers have spoken about in the webinar.

In the UK, these tend to take to the form of participatory grant making, where a community fund of, for example, £50,000 can be applied for to do small projects, and community groups will decide which grants to make. This gives communities real power in a proportional way over real money. Particularly with the impact of austerity, he said, where we’ve seen massive cuts and crisis entrenched, one big impact is that the government has stopped listening to outside groups because it’s so busy wrestling with internal problems and which services to cut next. This causes many of the fundamental trust problems with democracy as governments, especially local governments, become unresponsive to popular demands. There’s also the context of the climate breakdown, where the richest are most likely to contribute more to the problem but are also least affected by it, which works hugely against a more equal society. All this undermines trust in democracy and encourages more people to disengage.

Participatory systems are a good response to this problem, and we’ve also seen some real positive trends, as groups move away from the idea of top-down charity and towards community empowerment and co-operating at a local level, which builds a stronger society for everyone. Participatory budgeting helps reinforce this idea of co-operation and the idea of a common good, which are needed for a successful democracy.

Other Reports