Development: Post-2015 Agenda

Lord Parekh Excerpts

Wednesday 2nd April 2014 Lords Chamber

[Lord Parekh (Lab)]

My Lords, it is a pleasure to follow the noble Baroness, Lady Flather. I cannot promise to measure up to her formidable indictment of the male half of the human species and her fervent call to women to unite using almost Marxian language: “Women of the world unite. You have nothing to lose but your chains”.

I want to begin by thanking my noble friend Lady Kinnock of Holyhead for introducing this debate with such passion and eloquence. We know of her record in this area. She has done wonderful work over the years promoting the causes not only of the poor in our own society but also in developing countries in general. I would like to use this occasion to celebrate her work.

I welcome the United Nations System Task Team report to the Secretary-General of June 2012, and the Secretary-General’s own report entitled, A Life of Dignity for All. However, both of the reports have one big lacuna: they talk about sustainable development, which they define in terms of economic development, social inclusion and environmental sustainability, but there is no provision for equality or for the reduction of inequality.

I do not want to take up the time of noble Lords trying to rehearse all the facts of inequality that we know about; rather, I want to ask two questions which have not been discussed so far. First, why is inequality a bad thing? Only a few years ago a senior member of Tony Blair’s Cabinet told us that he was completely complacent and undisturbed about people becoming filthy rich. There are many who ask why equality is of any value at all, and if not equality per se, the value in the reduction of inequality. Why is it important? Is it just that some people are better off while others are poor? What is wrong with that? It is part of human nature, part of human history, and part of our circumstances. So I want to take some time as an academic answering the first question. Secondly, if I can persuade noble Lords to my view that inequality is a bad thing, what is it that we should be doing in developing countries? Let me take the two questions in order.

Inequality is a bad thing for a number of reasons. Firstly, it is unacceptable because it is unjust. If some are poor while others are rich, it is not because some people work less and others work more. It is due entirely to circumstances beyond their control. Certain handicaps acquired in one generation are accumulated over several, so that the poor man of yesterday is in that particular predicament because of circumstances that he could do nothing to overcome. The first reason why inequality is a bad thing is because it is unjust, and justice requires that inequality should be reduced, and ideally eliminated.

The second reason why inequality is a bad thing is that it divides human societies into two different species, the privileged and the underprivileged, and there is no common life between the two. In the absence of a common life you cannot have any kind of community. The rich, if they have no sympathy for or do not share any kind of common life with the poor, are not going to pay higher taxes. This is what people have found in lots of developing countries but not just there—even in our own society the rich will not part with money, simply because they do not have the same degree of sympathy for the poor or share a common life with them.

The third reason why we can press the case against inequality is the amount of wastage of human resources. An enormous amount of talent goes to waste, which leads to distress. It is crushed. The noble Baroness, Lady Flather, talked about one half of the human species, women. I would say: what about 99% of the poor and underprivileged, and many others, who would be able to contribute so much and yet cannot because they have no opportunity to do so? This is one of the greatest indictments of inequality—it violates human dignity and human essence and creates a situation of enormous frustration and distress.

Another reason why inequality is unacceptable is that it leads almost inevitably to public disorder and conflict, because the poor do not simply accept their predicament as God given. They are bound to protest, in small and large ways. If you cannot openly undertake a revolution, you can subvert the system in small ways here or there, and as a result social order is vitally disturbed. I could go on answering this particular question because I think it is very important. Lots of people I have spoken to, in government and elsewhere, simply do not understand why inequality is a bad thing—they say either it is natural or it is a result of contingency and factors we cannot control—so I have spent about four minutes trying to explain why it is a bad thing.

If we are right that it is a bad thing, what should we be doing? I want to put half a dozen important ideas on the agenda and I hope that the Minister will have the time to address at least one or two of them. The first thing is the abolition of tax havens, which destroy not only developed societies but the large developing societies, because the rich find it very easy, quietly and conveniently, to stack away huge amounts of money. India, for example, must have lost billions of dollars through people passing money into offshore accounts. The first thing we need to do is tackle tax havens.

The second thing we need to think about is stronger regulation of global finance. The international financial institutions privilege the rich and the developed countries and make it very difficult to create conditions in which the developing countries can flourish. That is also closely tied up with the idea of a regulatory regime for corporations, because many of these corporations, as we know in the case of raw materials in Africa and Latin America, plunder the developing countries and simply do not allow them to function, because they do not have any resources left.

We should also take a close look at intellectual property laws, which make it very difficult to ensure that developing countries have access to essential medicines, which, thanks to intellectual property laws, are frightfully expensive. Lots of diseases in developing countries that could otherwise be tackled are simply not tackled.

Finally, we also ought to be thinking in terms of improving access to western markets for developing countries. Here, I think we have gone fundamentally wrong by developing a growth strategy which is basically skewed. When we talk about economic growth or economic development, we are simply thinking in terms of total GDP or per capita income. We should be encouraging the view that economic growth should be people based, it should be job friendly and it should value equality or at least a reduction in inequality.

In India, for example, after liberalisation a small number of people have become enormously rich and lead a kind of life that westerners would find deeply distasteful, and a large number of people—at a rough calculation, between 30% and 65% of the population—are poorer than they were. That is because the growth strategy, largely based on global demand for IT, produces a lot of wealth for a small number of people but there is no manufacturing where jobs can be given to people. Developed countries have an obligation to encourage the correct kind of growth model, especially one in which people are able to make their own input.