'We Can and Should Take Action If the Earnings of the Rich Set Them Apart from Society': Anthony Giddens Argues That New Labour Needs to Embrace a New Egalitarianism If It Is to Take Further Its Commitment to Social Justice. Unlike the Old Notion of Equality, It Would Reject Totemic Gestures Such as Raising Income Tax Rates
Giddens, Anthony, New Statesman (1996)
The government is often criticised from the left for having done nothing to counter inequality. It is said that Labour's classic mission--to create a socially just society--has been largely abandoned. Instead, new Labour has opted for an essentially Thatcherite mix of more privatisation and flexible labour markets, with a few nods in the direction of social justice. Are these claims true?
Certainly, this Labour government, from the start, took a different line from its predecessors on poverty and inequality. The intellectual leader on the issue was Gordon Brown rather than Tony Blair. Brown argued that economic stability and consistent growth were the keys to social policy. Indeed, the fons et origo of new Labour was the idea that social justice should go hand in hand with economic dynamism and job creation. The realisation of "human potential" was at the centre of it: only if individuals were free to make the most of their capabilities was it possible to move towards greater equality.
It is difficult to think of a single area of government intervention since 1997 which has not been related to questions of poverty and inequality. The child tax credit, working tax credit and pension credit; the minimum wage and the New Deal; the child trust fund and child benefit increases; Sure Start and the childcare tax credit; education action zones and a veritable maze of other programmes directed at deprived areas; large-scale investment in public services--the list goes on and on.
Far from betraying Labour ideals, the emphasis upon keeping labour markets flexible, above the floor of a minimum wage, has helped to further social justice. Old Labour, as much as new Labour, saw the importance of full employment. Getting a job is the best way of moving out of poverty. And by any orthodox meaning of the term, full employment has been achieved. Levels of employment stand at a historic high. The UK has 75 per cent of its adult population in jobs, one of the highest proportions in Europe.
Since 1997, new Labour has achieved significant reductions in levels of poverty overall, and in levels of child poverty and pensioner poverty. By 2002-2003, the numbers living below 60 per cent of national median income--the standard EU measure of poverty--had fallen by about 1.5 million. Experts agree that the government will almost certainly reach its target of reducing child poverty by a quarter by the end of the current financial year. From ranking 15th out of 15 among EU countries for child poverty, the UK in 2003 had moved up to 11th. Pensioner poverty should in principle be eliminated more or less completely through the combination of pension floor and pension credits.
There has been redistribution, even if not from very top to very bottom. The long rise in income inequality appears to have levelled off since the late 1990s. The lowest 10 per cent of earners were 8 per cent better off in 2003 than they were in 1997--largely, according to the Institute for Fiscal Studies, because of tax and benefit policies.
This may be the first Labour government actually to effect redistribution, rather than just talk about it. The critics hark back to a golden age when Labour leaders really believed in equality. That they did nothing effective about it could be safely ignored. Previous Labour governments were either in power for too short a period or became rapidly mired in economic crisis.
Yet there are many questions to be asked. How are the targets of halving child poverty by 2010 and eliminating it by 2019 actually to be met? An emphasis on getting people into work is all very well, but what about those who can't work? Have we reached the limit of the usefulness of tax credits? Are targeting and means-testing being used too widely, given their known problems?
A recent report, The State of the Nation, from the Institute for Public Policy Research (IPPR), recognises the successes while observing that "there is a strong sense that Labour's reform programme is incomplete and vulnerable to challenge" as well as "lacking in vision". …