A big, unequal society

David Cameron could claim to be a Conservative, pure and simple. Often he adopts other titles, like liberal or progressive Conservative. But recently he has unwittingly adopted a new label: the confused social democrat. Cameron’s November 2009 Hugo Young lecture established inequality as a standard by which Conservatives wants to be judged—specifically the gap between the incomes of the poorest and middle England, not just the very poorest and the rich.

The lecture acted, in part, to correct the cartoonish depiction of the state that featured in Cameron’s address to the Conservative party conference in October 2009. He finally acknowledged the role of legislation in social progress—easy enough, as there are good examples of this during Tory governments, like the Factory Acts of 1819 and 1844. He also intriguingly refined his critique of the state. Where once he had been ideological in his criticism—the state cannot help because it is the problem—he was now historical: during the 1960s, Cameron claimed, the state just ceased helping. More important, however, was the desire to move his thinking further towards the left, saying: “we must use the state to remake society.” The only Miliband who disagrees with that is Ralph.

Then came an unanswered Cameron question: if government is the question, not the answer, how exactly does the broken society heal itself? To the extent that he offered a solution, he retreated. The state, in his earlier formulation, was not just an inadequate answer to social breakdown; it was also its cause. Now, all of a sudden, the state is part of the healing process. While Cameron’s strategy svengali Steve Hilton wrote both speeches, this shift was so stark it felt as if the two had different draughtsmen. If the Hugo Young was pure Hilton, the earlier smacked of his hard-headed press chief Andy Coulson.

Cameron’s new “egalitarian” platform is full of holes, whoever wrote it. He still seemed to think, during the Hugo Young lecture, that the state has eroded national solidarity. This is a bold claim, and one for which he offered no evidence. He still cannot wholly resist the image of the state as a society-devouring monster. “Today,” he said, “the state is ever-present: either doing it for you, or telling you how to do it, or making sure you’re doing it their way.” Is it, really? Where does he live, Burma?

The Labour party sentimentalises state power as the lifeblood of communities. But just because this view is silly does not mean that the opposite must be true. It seems not to have occurred to either party that the size of the state might not be relevant to the sense of solidarity that a society enjoys. That said, the best counter to Cameron did come from Labour’s Liam Byrne, whose speech on the “smarter state” to the Institute for Government in November argued that countries with “big” civil societies almost never had smaller states. Even within the US, liberal Minnesota has higher spending, and more civic engagement, than conservative Mississippi.

Another hole in Cameron thinking was the period 1979 to 1997. To make a speech about inequality and poverty and then to chart the course of 20th-century British history but miss out the Thatcher years was dishonest. The Institute for Fiscal Studies’s assessment of these years is that “the scale of this rise in inequality has been shown… to be unparalleled both historically and compared with changes taking place at the same time in most other developed countries.” A brave leader would have taken his party to task on this, as Tony Blair so often did; confident of carrying his people with him, he would have either argued that Thatcher was wrong, or that growing inequality came inevitably with the end of corporatism. Instead, he closed his eyes and wished the past away.

He was also worryingly silent on inequalities in wealth, which have risen far more quickly in recent years than inequalities in income. Cameron now argues that we should concentrate on the inequality between the middle and the bottom, rather than between the bottom and the top. Oddly, this is what current policy does—giving the impression that Cameron didn’t understand, for instance, that measures against child poverty target those on less than 60 per cent of median income. Then, at the other end of the income scale, the Conservatives had to deal with the embarrassment of Zac Goldsmith’s “non-dom” tax status. This hurt largely because of George Osborne’s pledge to cut inheritance tax for millionaires like Goldsmith: once a political masterstroke, now both a liability and wrong in principle. Although Osborne announced a delay to its introduction, he seems determined to keep it—an uncharacteristically stubborn act from the Tories’ most tactically astute politician.

But the biggest curiosity of all is that Cameron is still forswearing the answer to his own question. It makes literally no sense to declare that inequality needs to be reduced, and then call for a reduction of state benefits. Cameron cites the right reasons for current rises: a new, growing gap in wages between skilled workers and unskilled workers. One can shrug shoulders and say: “that’s life.” It’s also possible to do more to equalise opportunities using the state. But it’s wrongheaded to say that rolling back benefits will make us more equal. The issue here is not ideology, it’s not even politics: it’s just arithmetic. Labour’s record shows that cash transfers can work to reduce basic income inequality. It also shows that even a broadly centre-left government did not feel able to transfer money on the scale needed truly to make society more equal. So inequality has been checked, not reversed.

The Conservatives are missing a very big trick here. The most thoughtful Labour politicians question approaches to poverty that focus on income alone. They know disadvantage has many dimensions. At least one cabinet minister, Liam Byrne again, has been to Harvard to learn more from Amartya Sen about the application of his “capabilities” approach—which focuses broadly on education, health, economic resources, and so on, to attack inequality. There are echoes here of Labour’s initial enthusiasm, stoked by Blair’s policy adviser Geoff Mulgan, for new broad measures to gauge and tackle “social exclusion” in place of a narrow, mechanistic focus on income-based poverty. Privately, some inside the Cameron bunker warm to this idea. They need to be more assertive with their boss—because at present he is signing himself up to Labour-style poverty and inequality measures, even as he rejects Labour-style redistribution. In other words, he is setting his own big trap, and trotting gamely towards it.

That said, there is much to like in Cameron’s approach. Few of his predecessors gave anything like this attention to inequality—not since Macmillan, at least. Labour can also take some credit: the left has been successful in its historic mission of pulling the Conservative party leftwards on social policy. To this extent, at least, it has changed the weather of British politics.

Still, Cameron might be better off telling a different story. He speaks well on the vibrant social action he would like to see, and he seems to adore trendy social entrepreneurs and community organisers. He is genuinely radical on the need to use technology for greater transparency, on devolving power, and on the need to grant more responsibility to individuals. So it is quite possible to hear him speak plausibly about a society which is “bigger”—meaning more plural, more open, gentler, more interesting, more vivid and more imaginative. But more equal? Not likely.