Hurrah for Iain Duncan Smith and a dunce’s cap for David Cameron. Duncan Smith was the worst ever leader of the Conservative party. Since then, however, he has developed a thorough understanding of the characteristics of Britain’s underclass. Last week he unveiled a raft of well-researched reports covering family breakdown, drug and alcohol addiction, educational underachievement and consumer debt. Once a caricature moralising right-wing Tory, nowadays he is careful to avoid sermons.
By contrast Cameron’s response was crude and superficial. He has already jumped to the conclusion that family breakdown is at the heart of our horrendous social problems, and has re-committed himself to supporting marriage through the tax system. Duncan Smith looked embarrassed as Cameron converted 300,000 words of serious study into a soundbite that endorsed his preconceptions.
Admittedly there is plenty of evidence that children on average suffer fewer problems when they have two parents, and that their parents are more likely to stay together if they are married. But that is like observing that it rains less when the sky is blue. People who have no educational achievements and are addicted to alcohol or drugs find it hard to make a success of anything in life, and that includes relationships and parenthood. By suggesting that a tax break would make a measurable difference Cameron appears thoroughly out of touch.
It is surprising because the Tory leader is a fan of Camila Batmanghelidjh, a psychotherapist who has worked with damaged children for 16 years. This year she published a book of letters that she has written to children about their terrifying lives. One is to a seven-year-old girl who has to take responsibility for all the household tasks in her home including care of her younger sister. Her drug addict mother punishes her by burning her on the cooker and her mother’s boyfriend tries to abuse her sexually. When violence puts the little girl’s life in danger she grabs her sister and rushes out onto the estate where she lives in the hope that the first person she meets will help her, not assault her.
Matched against such realities Cameron’s idea of tax breaks is a worthy successor to Marie Antoinette’s exhortation that the poor eat cake when short of bread. Batmanghelidjh founded Kids Company, which enables children to visit a safe environment where they can experience love. She says that an antisocial youth is unaffected by punishment. It is what he expects and merely confirms his belief that everyone hates him. Love, by contrast, takes him by surprise and can help to change him.
Presumably her thinking underlay Cameron’s much-derided suggestion that we should “love” hoodies. It was dismissed as naive. In fact that thought was profound whereas the tax-break idea (greeted with acclaim by Tory newspaper columnists) is risible. I hope that this is not the start of a broader cave-in by Cameron to his right wing and the Daily Mail.
It is a pity that Cameron’s remark distracted attention from Duncan Smith’s reports, because they are a devastating critique of the government’s failures. During the years that Labour has been in office no progress has been made in raising the educational achievements of those at the bottom of the heap.
Although the prime minister declared education to be his priority, and regardless of the enormous increase in the education budget, and despite chancellor’s efforts to redistribute income through tax credits, 26,000 children leave school each year without a single GCSE and 75,000 15-year-olds have low literacy. Children from disadvantaged backgrounds are five times more likely than average to fail academically and children in care do just as badly. Today 18% of children have special educational needs and the numbers with social and psychiatric disorders are rising.
The education system has focused on the government’s target of increasing the proportion of children who get five GCSEs with grades A to C. Coaching the most disadvantaged is unlikely to help hit that target, so they have been neglected.
By commissioning Duncan Smith’s reports Cameron has made inequality a political issue. But it is still hard to believe that either the Tories or Labour are serious about tackling it.
The divide between rich and poor in Britain today is monstrous and getting worse. If Labour were in opposition they would paralyse parliament and organise direct action on our streets in protest. According to some estimates 4,000 people in the City of London will receive a bonus of more than £1m this Christmas, and the total bonus pot will be about £9 billion. The satirists who savaged the “loadsamoney” phenomenon of Margaret Thatcher’s times evidently have nothing to say about the far more egregious excesses of today.
Residential property prices have risen by 180% in the past decade. That has produced a widespread feeling of prosperity and fuelled a binge of spending and borrowing. More than any other factor our illusion of wealth underlies the belief that Gordon Brown has run the economy well. Soaring house prices are thought to be a victimless phenomenon. In reality they represent a massive transfer of wealth to those who own property from those who do not. For the poor home ownership is a receding prospect.
Since inequality is supposedly now an issue for all parties you might expect them to debate the house price issue. But it is scarcely mentioned. Nobody has a policy to relieve the haves of some of their windfall gain to help the have-nots. Indeed the Conservatives are likely to go in the opposite direction since they already bend a sympathetic ear to middle class demands to cut inheritance tax. It is hardly surprising, or unjust, that we pay more tax on houses that have risen in price massively and fortuitously.
Inequality will increase further as the impact of the pensions disaster becomes apparent. After 1979 Britain’s policy, pursued by both parties in office, was progressively to move responsibility for pensions from state schemes to occupational ones. For many years it worked well, because companies offered pensions based on what a person was earning just before retirement.
That system has collapsed. Partly because Brown has taken from pension funds an extra £5 billion a year since becoming chancellor, and partly because of the poor performance of the London stock market, new entrants to pension schemes are no longer offered pensions based on final salary. Now most are saving too little for their retirement. The state pension is a small and diminishing proportion of earnings, so the inequality between people in work and those in retirement will grow. Most pensioners must receive means-tested supplements to their pensions and that proportion will rise.
In other European countries people and their employers are obliged to save quite large sums. So Britain’s pensioners will be disadvantaged compared both with other Britons and pensioners abroad.
Politicians can address most issues except big ones. Duncan Smith managed to focus attention on inequality for one day last week, but with relief MPs returned in following days to smaller matters like how Diana died and what the police asked Tony Blair.
At least John Hutton, the secretary of state for works and pensions, takes poverty seriously. Last week he unveiled plans to require companies to contribute to pension schemes for their workers. However, the amounts that the poor (and their employers) can be expected to put aside may not be enough to lift them above the dependency level when they retire. Also, Hutton will allow employees to opt out, to spend now and live off the taxpayer later. Neither Labour nor the Conservative party is willing to force people to save. The political response to the foreseeable pensions catastrophe is pathetic.
Recently Britons have agonised over what are the defining characteristics of our country. A little complacently, we have come up with concepts such as respect for law, tolerance and liberty. Perhaps now we can add another. Sadly it subverts the rest. It is inequality.
