I spoke at the Socialist Health Association Annual General Meeting about inequalities in income, wealth & power and how this relates to our welfare state as a whole.
Before I became an MP, I was a public health consultant. It was a pleasure to speak alongside my former colleague and wonderful friend Alex Scott-Samuel.
My speech in full is below:
“Thank you for your warm welcome.
It’s lovely to be here and with my dear friend and former colleague, Dr Alex Scott-Samuel. Alex and I were co-Directors of a research unit at the University of Liverpool, and it’s really tackling inequalities that drove me into politics.
As a public health consultant for over 20 years, I knew that if you’re serious about tackling health inequalities you have to get policy right as its being designed.
At the same time I was at Liverpool I was also chair of Rochdale Primary Care NHS Trust for nearly 5 years, resigning in 2006 over my concerns of the use of private healthcare companies in the NHS. As a lifelong Labour supporter, I decided to get stuck in to try and influence Labour’s health policy….and the rest, as they say, is history. I became an MP seven years ago, and it is truly an honour to do this job.
Although I was critical about the use of the private sector in the NHS by the former Labour Government, under Labour the gap in life expectancy between the rich and poor did reduce. But I’m sure it will come as no surprise that a couple of weeks ago the ONS published data showing that under Tory austerity this gap is widening. For women, the gap is the largest since the 1920s.
As you know, inequalities are NOT inevitable. They are socially reproduced. They can be changed. And that should give us all hope.
But it needs political will to tackle them, not the soundbites of this Government.
Unfortunately in spite of all of this evidence, we are seeing a concentration of power in tiny elites more than ever. In 2015, the International Monetary Fund stated that ‘widening income inequalities is the most defining challenge of our time’. Forty years ago, 5% of income in the UK went to the highest 1% of earners. Today it is 15%. This trend of increasing income inequalities has occurred in most high income countries, but some less so than others.
This work followed on from another IMF report which came out in support of Nobel economist, Joseph Stiglitz’s analysis that inequalities are a drag on growth and can also make growth more volatile. The Organisation of Economic Co-operation and Development has similarly rejected the ‘trickle down’ economics of the 1970s, so popular with Margaret Thatcher and other Thatcherites; this supposed that increasing wealth at the top would ‘trickle down’ to the rest of the food chain and that policies aimed at reducing inequality would remove incentives and slow growth.
Now the evidence is clear: inequalities have slowed not increased growth. Raising the income share of the poorest 20% of the population increases growth by as much as 0.38% over five years. In contrast, increasing the income share of the richest 20% by 1% decreases it by 0.08%.
In the UK, the Institute of Fiscal Studies has shown that working people on low incomes, particularly families with children, have lost proportionately more of their income than any other group since 2010 as a result of tax and benefit changes. If cuts to public services are added to this, the disproportionate negative impact on people on low income is even starker.
All of this seems to have escaped the notice of the Chancellor on Tuesday & in his Budget last Autumn.
Reducing the gap between rich and poor benefits everyone – in addition to increasing life expectancy, there’s increased educational attainment, social mobility, trust and so on as we know from evidence from Richard Wilkinson’s and Kate Pickett’s Spirit Level.
To tackle these inequalities in income and wealth, in addition to reforms to the labour market, a coherent and comprehensive industrial strategy, and a national education service that is not just about preparing you for work but is enabling you to get the most out of life, we need a social security system that is there for us all in our time of need, just like the NHS is there to care for us if we become ill.
And of course we need a properly publically-funded NHS and social care system.
But it’s the socio-economic determinants of health I want to focus on today.
Since 2010 the Tories have inflicted a programme of spending cuts to the tune of £83 billion pounds. Under the Coalition, our social security system has particularly borne the brunt with swingeing cuts of nearly £34bn, with another £12bn planned.
At the time austerity was first being implemented, the then Home Secretary, Theresa May, warned in a letter that “there are real risks that women, ethnic minorities, disabled people and older people will be disproportionately affected.” She went on to state that “Women, for instance, make up a higher number of public workers, and all four groups use public services more.”
On this, she was right. The risks were realised and disabled people, ethnic minorities, women have been hit hardest. As most people here today will be aware, women have borne the brunt of Government cuts. House of Commons Library analysis revealed that a staggering 86% of the burden of austerity – largely changes to taxes and benefits – since 2010 has fallen on women. Yet it is under Theresa May as Prime Minister that we are seeing the very worst effects, with a huge proportion of the announced cuts yet to come.
After nearly eight years, this government continues to pursue an economic agenda based on discrimination and inequality, slashing our public sector and cutting our social security system and our welfare system as a whole to the bone, while at the same time giving tax breaks to those on the highest incomes. Action to tackle industrial scale tax avoidance and evasion by the super-rich elite and big business can only be described as piecemeal.
Attacks on some of the most vulnerable in our society through cuts to the social security support available are shameful, and they are damaging not just for the people experiencing this hardship, but for society as a whole.
The inequalities that the people of our country are facing at the moment are reminiscent of a Victorian age.
According to the latest Sunday Times Rich List, the richest 1000 people in our society saw their wealth increase by 16% in the last year alone.
In spite of promises to tackle these ‘burning injustices’, the income gap between the richest and poorest in society has almost doubled. According to the Equality Trust, Britain’s top bosses are paid, on average, 165 times more than a nurse, 140 times more than a teacher and 312 times more than a care worker. Indeed it would take a typical UK worker 160 years to rake in the average annual amount handed to a FTSE 100 boss.
The Equalities and Human Rights Committee has revealed that the poorest tenth of households will on average lose about 10% of their income by 2022 – equivalent to £1 in every £8 of net income.
The recent EHRC report published this week found that the impact of policy decisions taken by the two Conservative administrations since 2015 will be to reduce incomes for the poorest, while increasing incomes for the richest 20%. Women lose more than men at every income level. Lone parents – the vast majority of whom are women – are particularly badly hit, losing about 15% of their net income on average, equivalent to almost £1 in every £6.
On top of this, we have seen a period of growing job insecurity and low pay, stalling productivity, rising precarity and self-employment, and falling living standards. Now we have the latest ONS labour market statistics showing a rise in unemployment.
And then there’s inequalities in wealth with land and property being the largest real asset. In 2002 it was estimated that 69% of the land in the UK was owned by 0.6% of the population. In the six years to 2011 the number of landholdings reduced by 10% but the size of these holdings had increased by 12%. So even fewer people own even more land. Many in housing policy emphasise that if we’re to solve the housing crisis in addition to building more homes, we need to tackle the cost and availability of land and address the volatility in the market.
With average house prices in the UK in 2017 over £226,000 (over £496,000 in London), the Nationwide Building Society has estimated that it would take 8-10 years for people on average incomes to save the 20% deposit needed to buy a house and even longer for someone on a low income. As a result many young people, but not exclusively, are living with their parents, or are renting, the so-called ‘Generation Rent’. Inequalities are now becoming intergenerational.
And finally there’s inequalities in power. In status. In who makes decisions and how. This is often the neglected inequality but is central to who we are as human beings. When wealth and power are concentrated in a tiny elite, there tends to be less investment in education, health and infrastructure, which particularly benefits people on low incomes and enhances productivity. In the last 5 years, for example, public spending as a percentage of GDP, fell in health from 6.6% in 2009/10 to 6.1% in 2015/16 and in education from 3.8% to 3.1%.
In addition to this lower investment, there has been a targeting of resources away from areas of high need. For example, many of you will recall how in 2011/12 the health inequalities weighting in NHS resource allocations was reduced from 15% to 10%. This was breathtaking. The recommendations from the Advisory Committee on Resource Allocation (ACRA) to maintain the health inequalities weighting at 15% were completely ignored by the Health Secretary at the time. The effect was to shift resources from deprived areas with high levels of unmet health need to affluent areas with better health; for example reducing Tower Hamlets’ budget allocation by 4.1% and increasing Surrey’s by 4.2%. The Coalition followed this with a campaign to base NHS Resource Allocation Targets more on a population’s age profile. This would see the break with NHS resource allocation based on need which has been a fundamental component since 1970 and will see funding haemorrhage from deprived to affluent areas. If you couple this with the Government’s NHS privatisation agenda, the introduction of Personal Health Budgets, and the scandalous cuts to social care AND public health we can see the cumulative impact this will have on health inequalities.
And the inequality in resource allocation doesn’t stop with healthcare. Collectively public spending cuts have been significantly greater in deprived areas. And again there is strong evidence of the relationship between public spending and, for example, life expectancy at birth. The immediate effects of this is already showing. In 2011 there was a significant surge in suicide rates for both men and women, but particularly for working age men with a 4% rise in 2012.
On top of this shift in investment, the policies themselves have also been highly polarising, from reducing access to education by, for example, trebling tuition fees and scrapping education maintenance allowance, to patently not making work pay to removing workers’ rights and protections through the proliferation of zero hour contracts and low paid, poor quality jobs as well as restricting access to justice with legal aid and judicial review changes. All of these have further contributed to maintaining power with an elite.
I will be writing more on inequalities in power soon.
Since 2010 working people on low incomes, particularly families with children, have lost proportionately more of their income than any other group as a result of tax and social security changes. Regressive economic policies where the total tax burden falls predominantly on the poorest combined with low levels of public spending, especially on social security, are key to establishing and perpetuating inequalities.
The Government’s cuts to social security are pushing more and more people into poverty. The Child Poverty Action Group estimate that cuts to Universal Credit alone will force 1 million children into poverty by 2020, while the ongoing freeze to the vast majority of social security payments means that 10.5 million households will see an average cut of £450 a year by 2020.
Again, as with other Government cuts, low paid workers will lose the most from cuts and changes to Universal Credit, with women and ethnic minorities hardest hit according analysis by the Women’s Budget Group. The cut to the work allowance, the two-child limit, the freeze in payment levels, removal of the family element and the change in the taper rate mean that by April 2021 employed individuals who live in households claiming universal credit will be £1200 a year worse off than they would have been under the original UC system, with women losing more than men.
As hopefully you already know, I have called on the Government to pause the chaotic roll out of their failing Universal Credit programme. Labour has committed to UC’s principles of reducing child poverty, simplifying the social security system and always making work pay in the past, but for me everything else is up for grabs.
I want a radical overhaul of not just UC but the whole system, changing the culture from one that is demonising and dehumanising to a system that is supportive and enabling. And as the sixth richest country in the world, I don’t believe we should be letting people live in squalor without heating or eating either.
We must address the adequacy of the social security system for our children, working age people and our pensioners too. You will know, as I do having travelled across the country as part of my pensions tour about women born in the 1950s who are sofa surfing because they can’t do the work they’ve done in the past in their 60s. We must do better for them.
We have been clear, there are several immediate actions the Government could and should take, but time and again they have refused. We would immediately offer women affected by Government changes to the state pension age the cost-neutral option to draw their state pension at age 64, allowing women who choose it to retire up to two years earlier.
It is also right to extend pension credit to those who were due to retire before the increase in the pension age, which would benefit hundreds of thousands of women. This would provide approximately half a million women on the lowest incomes up to £159 per week. We have repeatedly called on the Government to implement this costed measure, but sadly they have so far refused to act.
These measures are a start. They are actions the Government should take now! They are to compliment additional action on transitional protections. It also doesn’t preclude compensation. We want to continue working with women to right the wrong that they have been dealt.
But in spite of the stalling of life expectancy, and decline for some groups, the Government has said that they are going to accelerate the increase in the SPA to 68! It beggars belief.
But after nearly eight years of Tory austerity, it is the impact on disabled people in the UK that is the cruelest. According to analysis by Demos/Scope, the 2012 Welfare Reform Act alone saw 3.7m sick and disabled people lose approx. £28bn of social security support. And this doesn’t include the cuts in support through social care. And the EHRC report on the cumulative impact of cuts, estimates a disabled adult has lost £2,500 pa since 2010.
Half of those who live in poverty are disabled or live with someone who is disabled, because of the extra costs they face as a result of their disability or illness. This is completely unacceptable. Disabled people face barriers in all aspects of life – including in education, transport, access to justice, access to voting, housing, health and employment. Shockingly, the ‘disability employment gap’ remains high, at 31.3%, yet the Government has scrapped their 2015 manifesto commitment to halve this DEG.
As our manifesto with and for disabled people, Nothing about you, Without you states, we support a social model of disability which recognises that people may have a condition or an impairment but they are disabled by barriers in society.
As a starting point, we will end the current punitive sanctions regime and scrap the current cruel and dehumanising Personal Independence Payment and Employment Support Allowance assessments. Instead of supporting people, the process is often inaccurate and worsens existing health conditions. With 68% of decisions overturned at tribunal it is clear the system simply not fit for purpose and the distress and anguish these assessments cause cannot be underestimated.
A social security system that fails to alleviate poverty is failing at the most basic level. Instead of a safety net we have a trap door.
Like the NHS, our social security system should be there for all of us in our time of need, providing security and dignity in retirement, and the support needed should we become sick or disabled, or fall on hard times. It is a vital weapon in our fight against inequality.
Fundamentally, we will transform our social security system as part of wider radical reforms to drastically reduce inequality and poverty.
I have advocated that the Party needs to go further than we have already.
We need a new social contract with the British people – we need a Beveridge 2 defining a welfare state for the 21st century.
I hope that I will have the opportunity to work on this and contribute to the fairer society that this country so desperately needs and I believe wants as well.