“We’re all in this together” was without doubt the most horrible slogan at the last election, given how disingenuous it sounded when uttered by George Osborne and other frontbench Conservatives. It was, according to one author, “grotesquely implausible”. It suggests that the costs of the “necessary” austerity measures would be borne by all, and that everyone would pay their fair share. One would imagine that this means those responsible for the financial crisis itself – that is, those who got rich and benefited disproportionately in the bubble years – would bear the brunt of what would euphemistically be called “structural reform”. We now know that was not the case.
The Resolution Foundation recently found that inequality in the UK has increased over the past 15 years, just as it grew in the 1980s. The top 1% of earners now absorbs 10p in every pound of income, while the bottom half take home just 18p.
Inequality is, at least, creeping back onto the agenda in Britain. New Labour, which claimed to be “intensely relaxed about people getting filthy rich, so long as they paid their taxes”, did not pay much attention to inequality itself, but focused its attention on those at the bottom – demonstrated through its focus on eliminating child poverty. Inequality involves preventing those at the top from climbing ever higher though; Labour hardly dared venture that far. The Coalition, meanwhile, has overseen a harsh austerity programme, that has actually increased the number of children in poverty. The outcome of the Liberal Democrat-inspired policy of removing lowest earners from income tax altogether remains to be seen. In any case, that policy was overshadowed – at least in terms of public debate – by the simultaneous cut in the top rate of income tax, though again, the effect of that change remains to be seen.
Ferdinand Mount’s 2012 book, The New Few: Power and Inequality in Britain Now, is a fierce polemic focusing on the hyper-concentration of power and money in Britain today. Same old ‘Lefty’ stuff, some might think? That criticism fails completely here, because, even if it were anything more potent than an ad hominem logical fallacy, The New Few is written by a Tory.
Mr Mount (Sir William Robert Ferdinand Mount, 3rd Baronet) is, indeed, a man of impeccable conservative credentials. Educated at Eton College and Christ Church, Oxford, he has been a journalist for a number of centre-right publications including the Daily Telegraph, The Times and The Spectator, and in 1982 was the head of the 10 Downing Street Policy Unit – under Margaret Thatcher, no less. Moreover, his cousin is David Cameron’s mother. He is no usual suspect, and it is he who lambasted Mr Osborne for the grotesque implausibility of his slogan. As Ian Jack put it: “You know you’re in trouble when even the Tories say inequality has gone too far.”
Mr Mount’s argument is quite simple: power and money have concentrated in too few hands, which is bad news for the people and a danger to democracy. The gap between “the people” and “the oligarchs”, as he calls them, has expanded intolerably over the past few decades and culminated in the financial crash of 2008. Indeed, Mr Mount spends the first third of his book blasting the bankers who caused the crash, and the excessive pay rises that they received for their fine work in the preceding years. He makes a compelling case, and his analysis of how a flawed system, riddled with perverse incentives, came to collapse makes for a good primer on the crisis. One gets the feeling he doesn’t think much of Fred (no longer ‘Sir’) Goodwin.
Bankers are not Mr Mount’s only target though. In the political sphere, he points out many instances where he believes democracy is eroding: the subservient role of a whipped House of Commons that often shows too many empty green seats; the end of localism and continuing centralisation of power in Westminster; the democratic deficit in the EU; the stage-managed circus that is the modern party conference; and the aloof nature of modern politicians that he believes puts people off politics altogether. He also worries about the role and clout of media barons, which is particularly relevant in the light of the Leveson inquiry.
In many of his examples, Mr Mount is correct in his analysis: the hyper-concentration of power is a problem. This, he argues, is not because it creates inequality of outcomes, but because it creates persistent inequalities in opportunity. Mr Mount’s conclusions about inequality are similar to those of many ‘left-wing’ thinkers, as well as liberal policy wonks such as Richard Reeves, but the differences are pronounced about how to tackle it. Mr Mount is distrustful of state intervention, and regularly argues for deregulation in numerous spheres. Although he admits that the financial crisis was not caused by the state, he seems very sceptical about its enabling role. This may be an ideological block, or a refusal to believe that neo-liberal prescriptions about the economy have completely failed, but the reasons behind his scepticism are never clearly explained.
There is though, he concedes, room for the state to fiddle at the edges, without doing damage. A tinkering of company law, for example, could improve transparency and realign the long-term interests of companies with those of their shareholders rather than their highly-paid managers, who are often incentivised to merely focus on the next financial quarter. A voluntary social compact backing the Living Wage for low-skilled workers in large companies would raise the lot of many of the poorest members in society. Localism – or “local democracy” – is also a favourite concept, and he argues for its reinvigoration. He even goes so far as to argue for a “mansion tax or new council tax bands at the top end, to remind the oligarchs that they owe a duty to the place where they live”, which might endear him to Ed Miliband and Nick Clegg, but probably not many current members of the Tory party. This is all very far from mainstream Conservative thinking, without being anything close to what we might – correctly or incorrectly – call ‘socialism’.
Mr Mount is evidently disturbed by inequality in Britain. This book is about the problem of inequality and its malignant social and political effects. It is not a rigorous analysis like The Spirit Level, but it just about beats Polly Toynbee and David Walker’s similar polemic The Verdict, which focuses on the Labour years – not least because he manages to include a ‘Notes’ section. If even those responsible for drawing up some of Mrs Thatcher’s inequality-increasing policies are now lamenting its effects, we may indeed be in trouble. But maybe we can hope that the need to diffuse power will finally be taken seriously.