Inequality and Social Mobility

Debbie Abrahams Excerpts

Wednesday 12th June 2019 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I am afraid that the Government’s record on inequalities, across the piece, is absolutely woeful. I was particularly concerned by some of the data mentioned by the Secretary of State.

Last month, on the 49th anniversary of the Equal Pay Act 1970, the Equality Trust published more data showing pay inequalities. It analysed the average pay of chief executives and other workers, gender pay gaps and gender bonus gaps in FTSE 100 companies. That followed the report, in February, of an increase in income inequality according to the Gini coefficient, a standard measure. Who could forget “Fat Cat Friday” in January, which exposed the fact that top executives were earning 133 times more than their average worker? In 1998, the ratio was 47.

My hon. Friend the Member for Wirral West (Margaret Greenwood) was absolutely right to draw attention to the impact of austerity and the Government’s choices—and they are choices: poverty and inequality are politically determined—to ensure that their tax and spending plans harm the poorest most. That is not just my view. A report from the Equality and Human Rights Commission has shown that the poorest 10th of households will lose, on average, 10% of their income by 2022, which is equivalent to £1 in every £8. There have been similar findings from the Institute for Fiscal Studies and other organisations.

However, it is not just a question of income inequalities. Wealth inequalities are also prevalent and have worsened in this country. The richest 1,000 people in the UK have wealth estimated at £724 billion, which is more than the wealth of the poorest 40%, at £567 billion. That privileged 1,000 saw their income increase by £66 billion in one year alone and by £255 billion over the last five years.

[Matt Rodda (Reading East) (Lab)]

Will my hon. Friend give way?

[Debbie Abrahams]

Very briefly.

[Matt Rodda]

Does my hon. Friend agree that, at a time of widening inequality and huge gaps between those who have advantages in life and those who do not, it is deeply and utterly irresponsible for a leading politician to promise tax cuts to the very wealthy while lacking any consideration for those in much more challenging circumstances?

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[Debbie Abrahams]

I could not agree more. In fact, I think that a stock question to all who aspire to be the leader of this country should be “How are you going to tackle the inequalities that our country faces?”

The impact of these inequalities on life expectancy, which is now stalling after decades of growth, has not gone unnoticed. Among women, the gap is the largest since the 1920s, and for older women—as we have heard from other Members today—life expectancy is actually reversing. What has been the Government’s response? To increase the state pension age. People’s lives are becoming shorter, but they will have to work for longer to receive their pensions. The gap in life expectancy between the rich and the poor is 10 years for men and seven a half years for women, and that applies to healthy life expectancy as well.

The analysis shows that, while life expectancy is slowing down in the United States and some European countries, the slowdown is worst in the United Kingdom. This is not a developed country phenomenon: life expectancy is increasing in Denmark, Norway and other Scandinavian countries. The stalling in life expectancy has been picked up by the actuaries, who have estimated that there could be a 15% reduction in pension deficits—equivalent to £310 billion.

None of this is new. Seminal works such as “The Spirit Level”, published 10 years ago, showed that in societies and communities in which the gaps between the rich and poor are narrow, life expectancy, educational attainment, social mobility, trust and more increase. In addition, more equal societies see economic benefits, as described by the International Monetary Fund in 2015. Fairer, more equal societies benefit everyone.

Wilkinson and Pickett’s most recent work, “The Inner Level”, examined how more equal societies reduce stress and improve everyone’s wellbeing, unpicking the evidence of the pathophysiological pathways and mechanisms through which inequalities act to affect our health and wellbeing, physical, mental, emotional and more. Our health and longevity depend on how and where we are able to live, which in turn depends on our financial means. But on top of this, there is an independent and universal effect that reflects positions in our hierarchy: our class, status and relative power. The impacts of inequalities in power—political, practical and personal—are worthy of greater exploration and analysis, and I hope that the Deaton review will pick up on that.