Income Equality and Sustainability

Lord Wood of Anfield Excerpts

Wednesday 6th May 2020 Lords Chamber

[Lord Wood of Anfield (Lab)]

My Lords, Covid has revealed the injustice of inequality in a savage way. It is a disease that has disproportionately hit the poorest. Lockdown has further exacerbated these inequalities, and remote working is mostly a luxury of white-collar professions. Those on low pay and in the gig economy have little financial option but to carry on working, with all the risks that that brings. Our children are now schooled remotely, but the Sutton Trust shows that huge inequalities exist in the provision of education. However, I believe that there is a Beveridge moment coming as the crisis unfolds—a chance to come together to shape the kind of country we want to rebuild. I make a plea for this Beveridge moment to have four key principles about equality at its heart.

First, we need to rectify what has become one of Britain’s largest comparative disadvantages: our long tail of low-skilled, low-wage workers. We have too many workers who revolve in and out of no work and bad work, with no protection or assets, who are told to take any job and climb an escalator of prospects that, frankly, does not exist. It has to stop.

Secondly, we need to redesign our public services to place prevention of life-chance inequalities at their heart. From health care to social care, education to housing and transport to culture, every service should have the goal of pre-empting deprivation at its core.

Thirdly, we must put equality and social justice at the heart of the tax choices we will have to face as we look to pay for our response to this crisis. Germany responded to reunification with a solidarity tax, a supplementary income tax for the wealthiest Germans. I believe it is time for us to contemplate a UK version of this and to grasp the nettle of taxing the sources of huge inequalities in wealth, in particular land and housing.

Lastly, the impact of Covid on the poorest countries is likely to be more catastrophic than in the developed world, but the architecture of international co-operation is now weaker than at any time since 1945. The UK should lead the effort to rectify that and make the assembly of an international coalition for greater global equality a foreign policy priority.