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CAMBRIDGE LETTER
Equitable no more
BILL KIRKMAN
“I have never seen such a polarised U.K. economy. The rich are so very, very rich... But the poor are getting poorer.”
When, some 44 years ago, I had the opportunity to stop working for a major newspaper, The Times, and take a post with one of Britain’s leading universities, Oxford, the move was financially neutral. There was virtually no difference in the salary levels. Both jobs were stimulating and challenging. I was able to make my decision by weighing up many factors — without having to worry whether I could afford the move.
Such a situation was not at all unusual. There were, it is true, some people, in some occupations, whose pay was much higher than the national average, but for most, there was a sense of getting fair pay for the work one did. Those who remembered — or whose parents remembered — Britain as it was in the 1930s, when there was high unemployment and scant help for the unemployed, were able to recognise that the country was much more prosperous, and society much more equitable.
Dramatic changes
In recent years, things have changed dramatically, and for the worse. A report from the Institute for Fiscal Studies records that the top 10 per cent of adults now receive 40 per cent of all the income earned in Britain. The top one percent — some 4,70,000 people — earn an average of 222 thousand pounds a year; the average across all taxpayers, by contrast, is 24 thousand.
It is hardly surprising, in these circumstances, that there is fierce resentment among public sector workers — such as teachers, police, nurses — at the attempt by Gordon Brown’s government to cap rises in public sector pay at two per cent. It is fuelled by the fact that the economy is facing increasing problems, with the value of shares, especially in the retail sector, falling, and the prices of basic commodities rising. Fuel prices, which affect the heating of homes, and motor travel, have been rising steeply. So has the price of food. Such price rises clearly affect the poorly paid far more seriously than the well paid. The charity Save the Children, in a report last month “Robbing Peter to Pay Paul”, points out that among low-income families with debt concerns, nearly one family in four say they have difficulties in providing food for the family, and one in five difficulties with fuel and heating.
It is not just organisations like Save the Children which express concern. Sir Stuart Rose, chief executive of the retail group Marks & Spencer, has commented: “I have never seen such a polarised U.K. economy. The rich are so very, very rich. The West End (of London) can’t get enough diamonds. But the poor are getting poorer”.
The reference to polarisation is significant. When such huge pay disparities exist, any sense of community is likely to evaporate. The idea of being able to seek satisfaction in a job, in which one was valued more or less on the same basis as people in other occupations, has gone out of the window. The top 10 per cent are seen as being concerned with the money which they receive, and very little with their wider responsibility to society. Public service workers, on the other hand, feel that their contribution to society is not valued.
A sense of bitterness
At a time of prosperity, the effects of this tend to be mitigated. Those on average incomes may feel that others are over paid, but provided that they can afford to live reasonably, the feeling probably does not turn into bitterness. When the economy is weaker, and paying for the necessities of life becomes harder, it is not surprising to find bitterness growing.
It is something which the government — any government — ought to take seriously. The satisfaction of doing a job which one enjoys for a fair rate of pay can quickly be overtaken by resentment that earnings are inadequate to provide a reasonable standard of living for the majority, while the top 10 per cent enjoy what will increasingly be seen as obscene wealth. If such resentment grows, the question will arise whether the United Kingdom can remain truly united.
Against that background of social disunity, the strength of nationalist feeling in Scotland, and to a lesser extent in Wales and Northern Ireland is likely to grow, particularly as devolved administrations introduce social benefits (such as, in Scotland, cheaper higher education than in England). I wrote last August of plans formulated by the minority Scottish National Party government for a “national conversation” about Scottish independence, and suggested that they were politically significant. I see no reason to change that assessment.
Bill Kirkman is an Emeritus Fellow of Wolfson College Cambridge, U.K. Email him at: bill.kirkman@gmail.com
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