Labour’s sole focus should be closing Britain’s wealth gap | Polly Toynbee | Opinion
N othing shocks any more in the realms of unimaginable wealth. The ranks of the global super-rich – those with more than $30 (£23m) – swelling by 13% last year barely merit a mention today, beyond the Guardian’s sharp-eyed wealth correspondent. The number of dollar billionaires has shot up by 15% too.
It’s rude to call them rich so they prefer “ultra-high net worth”: that word “worth” has a pleasant ring, suggesting value. Besides, the chances are that many of them don’t see themselves as rich, because there are always others richer than them. It’s human nature to look up in envy, and never to look down.
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In our book Unjust Rewards , David Walker and I corralled top City lawyers and bankers into focus groups to gauge their knowledge of where they stood: these earners of up to £10m a year ranked themselves far nearer to ordinary people, always pointing upwards to those who earned more, with the social anxiety not of have-yachts-and-have-nots, but envying those who had yachts with crews. They were utterly clueless about average incomes, let alone poverty thresholds. They guessed almost everyone was in the upper tax bracket because that’s everyone they had ever known – though at the time it was just 10% of taxpayers. Yet these social ignorants manage the nation’s finances.
Next week marks the 10th anniversary of the Lehman Brothers’ crash , the biggest ever bankruptcy, with demonstrations outside the Bank of England to remind us how little has changed, and no one to blame after a decade of extreme austerity, with another such decade threatened. With no reckoning, no remorse, onward march the untouchable 1%, leaving a defeated sense that nothing will ever stop this pulling away of the top, as the bottom plunges down further. It fosters a bitter, directionless social grudge with a familiar tendency to turn on foreigners, erupting in the self-harm of Brexit. Unrestrained mega-wealth may be a fascinator for gossip, Hello! or gawping at royalty, but it sours support for collective endeavours to repair the social fabric.
Stratospheric wealth obscures the everyday crisis in wealth distribution. My generation’s purchase of what seemed humble homes on ordinary mortgages in the 1970s and 80s turned us, too, into what feels like super-rich by the standards of anything that went before in our families, through no “worth” of our own. The property bonanza that has cleft society by class and generation is even more serious than the distant rise of the ultra-rich.
On the same day the National Audit Office reported on the crisis in personal debt among low earners: 22% of adults have less than £100 in savings . Living on that precarious knife-edge is as unimaginable to most secure earners as mega-wealth. As a reporter, I tried it for a while writing my book Hard Work , working at minimum-wage jobs – but I could never for one moment capture any sense of how it really felt to have nothing: no buffer, no safety net, where the slightest mishap leaves the low-paid begging at food banks. Political empathy between income groups gets harder with wider distances between living standards and life experiences.
The NAO report is shocking in documenting the government’s ruthless debt collection, with ”intimidating”, aggressive practices against the indebted that are worse even than private debt collection. Local councils and government account for 40% of debt that is pursued relentlessly, without co-ordination between departments, driving the desperate to use more public services through deteriorating mental health and depression. Meanwhile, the Resolution Foundation calls for a halt to the rolling out of universal credit that launches households into immediate debt and rent arrears by its long payment delays. Citizens Advice reports a 24% rise in bailiff issues , with them growing more aggressive, and state agents the worst.
The Bank of England reports that consumer credit grew by 8.5% in July , with debt the only way to bridge the gap between wages and staying alive. Rent arrears with housing cuts means private landlords refuse universal credit tenants. Now No 10 has just stamped on plans to give tenants three-year leases , bowing to property company protests.
It’s no surprise that this government is the most aggressive punisher of poor people, since it has deliberately caused so much poverty. The irony of George Osborne’s London Evening Standard calling for donations to its poverty-relief charity defies even normal standards of hypocrisy. He targeted all his fiercest cuts on the benefits and tax credits of those with least, while cutting taxes mainly for the upper half and corporations. Philip Hammond is following on with yet more of the same, and it’s predicted that 5 million children will be in poverty by 2022 .
The Institute for Public Policy Research’s powerful broken economy report , showing how gains from growth are diverted from wages to profit, offers sound and radical proposals for tipping the balance the other way. But expect this autumn’s budget to adopt none of it. The Brexit catastrophe has consumed politics to the exclusion of all else – rightly as it risks economic damage that will make future social repair even harder.
Only Labour governments ever tilt the balance the other way. That’s why any distraction that makes Labour less electable is unforgivable, such as the months shockingly wasted on the mishandling of the antisemitism scandal . From now on, nothing at all must distract Jeremy Corbyn’s front bench from the ruthless pursuit of power. They must adopt every winning strategy – and that includes attacking Brexit every day from now on.
• Polly Toynbee is a Guardian columnist
Topics Inequality First thoughts Poverty Social exclusion comment