If Britain is to reduce today’s extreme levels of poverty and economic inequality, it needs to re-embrace egalitarian politics, argues a new Fabian Society pamphlet. The Equality Question: Why Labour Should Re-Embrace Its Egalitarian Roots argues that poverty and inequality are fundamentally linked, with the doubling of poverty levels since the early 1980s driven by the heightened divisions of income, wealth and opportunity reminiscent of the pre-war era.

Over the last four decades, Britain has moved from being one of the most equal of rich nations to the second most unequal.  Over the same period, the child poverty rate, in relative terms, has more than doubled. High levels of poverty and inequality both stem from a problem of distribution, which needs to be actively addressed if the gap between rich and poor is not to widen further.

“Poverty and inequality have again become institutionalised, built into an economic and social system which works heavily in the interests of a small financial elite,” argues the pamphlet. At the same time, “post-1980 governments have turned to old explanations – or excuses – for inaction: that poverty is largely the product of individual failure; that a certain degree of poverty is necessary to encourage a work ethic; that the pattern of rewards matches differences in merit” – all recycled theories from the 19^th century.

Supporters of such ideas champion the eternal superiority of markets, obscuring the fact that monopolisation, the deliberate rigging of financial markets and the selling off of socially owned assets have all been central to the steep rise in inequality. Societies based on these principles lack economic resilience, as the severe impact in the UK of the 2008 crash underlined.

But excessive inequality is not just economically corrosive: it has also left a growing trail of social distress. The long progress in rates of life expectancy has stalled over the last decade; political alienation is widespread; destitution and deep poverty have returned. Pre-pandemic, almost one-third of households with a disabled adult were in poverty, as were nearly half of families with three or more children, up from one-third; teachers report a steady rise in the number of children coming to school hungry.

The nature of poverty is changing as well: in 2018, around 60 per cent of those in poverty lived in households where at least one person was in work, up from a third in earlier decades. Work, as in the 19th century, has, for many, stopped offering a guaranteed route out of poverty.

Up to 1997, the goal of greater equality was embraced by all wings of the Labour Party. Despite the economic difficulties of the post-war era, social spending rose as a share of national income until the mid-1970s. This changed under New Labour, whose attempts to reduce poverty were hampered by its refusal to tackle inequality. “Child poverty,” argued Business and Enterprise Minister John Hutton, “can be abolished while people at the top are very wealthy. It is not only statistically possible – it is positively a good thing.” This was neither accurate nor ethical.

The author of the pamphlet, Stewart Lansley, whose seminal book on the issue, The Richer, the Poorer: How Britain Enriched the Few and Failed the Poor – a 200 year history, was published earlier this year, argues that Labour needs to “embrace and promote a new programme for radical change on a par with the pro-equality and anti-poverty measures implemented after 1945.”

That programme should include an improved and less punitive benefit system moving eventually to a guaranteed income floor funded by a more progressive system of income taxation. Also needed is a new, parallel system of progressive asset-redistribution designed to ensure a much more even distribution of Britain’s growing and heavily concentrated mountain of private wealth.

“These reforms would help to build a more equal and fairer society,” argues Lansley. “But they would not deal directly with all the institutionalised sources of today’s great divisions. To tackle these would require a new system of political economy, one that acknowledges the need to give greater priority to social over material needs… and that changes the balance between the public and private sphere in favour of social provision.”

The pamphlet concludes: “With mounting concern about the social and economic state of Britain, and a new public sympathy towards the need for radical change, there has rarely been a better opportunity to sell an egalitarian vision that raises life chances through guarantees of an equal share in social and economic progress.”