Kate Thick: Our politicians have their heads in the sand - or the trough

Kate Thick says inequality is a key concern - but how many people are going to talk about it at the elction?

Pope Francis hugs a child during his meeting with the youth in Santo Tomas University in Manila, Philippines
Pope Francis hugs a child during his meeting with the youth in Santo Tomas University in Manila, Philippines

Good, we have a Pope more passionate about the poor than Prada shoes.

As Pope Francis returns from the Philippines and Sri Lanka, world leaders head for the annual World Economic Forum in Davos. The Forum’s annual global risk report states interstate conflict and water shortages will threaten stability over the next decade. Hopefully they won’t forget the need for reform encompassing international banking, trade and tax regulation.

Inequality is one of the main concerns of British voters according to a poll conducted recently for ITV News.

We have all heard the numbers. There are now 13 million people, one in five of the UK population, living below the poverty line. Britain’s 1% grab more than their counterparts anywhere else in Europe.

Most worrying, the proportion of children living in poverty in the UK has risen to 25.6% and 7.5 million young adults within the EU are not in education, training or employment. With many people in low-income, unstable and part-time jobs, 2014 was a year of unprecedented inequality.

Global inequality has been falling but – and this is crucial - the conventional wisdom that development naturally increases and then reduces inequalities is wrong: the data clearly show that there is no systematic tendency for inequality to fall as an economy matures. Our politicians have their heads in the sand … or the trough.

The government continue to cut welfare to the very poorest while giving financial breaks to the wealthiest. Government pandering to big business means the UK loses around £30bn a year in unpaid taxes, £5.2bn of which is from wealthy individuals using the UK as a tax haven.

Power and money siphons off and up to political and corporate elites. How can trickle-down economics work when 40% of the global economy is controlled by 147 transnational corporations? Assets are transferring from the state to the rich. As foreign and UK investors gobble up property, we are becoming a nation of renters from buy-to-let barons.

Our free-market economy means 90% of energy to our homes is controlled by just six huge suppliers; it means privitisation and outsourcing. Energy firms resist or fail to pass savings to consumers because the government voted against giving regulators adequate teeth. Why do we put up with this? Do businesses and plutocrats deserve the privileges given them? It is a question I would like to put to the politicians we have to choose between in May who have so far failed to offer any compelling or coherent fiscal vision.

In Germany, where the wealthiest 1% receives in pay and bonuses half as much as their counterparts in the US, unemployment is at a 20-year low and there is less social misery. In the US and the UK, the 1% has gained the most as top taxes have been reduced the most. It doesn’t look like rocket science to me.

Is the economy recovering? The World Bank has just cut its forecast for global growth, warning the world economy remains overly reliant on the US and lower oil prices. Some economists predict 2015 will be the best year for living standards since the financial crisis but households are likely to remain poorer than before the recession.

Local councils, especially here in the North East, are picking up the pieces and helping the unemployed and most vulnerable but there are more cuts to come.

Matthew Arnold, the English essayist, said, “Our inequality materialises our upper class, vulgarises our middle class, brutalises our lower class.” Violence is certainly more common where inequalities are greater. Insecurity and stress lead to social unrest, to people simmering with resentment and ignoring the ballot box.

The electoral race should be about solving the housing crisis, raising wages, creating secure jobs, achieving tax justice, and debating the rationale behind austerity. If only. I want a robust economy with a human face, with values the Pope would be proud of, one which provides a safety net to protect the sick, the young and the old.

The north-south divide? London and the rest need one another but if devolved powers enable local politicians to lift prospects for the North East then let us vote for it. Fairness and inclusiveness - constantly imperiled by the powerful - will not be won by voting alone but by organising and demonstrating, through grassroots and social media campaigns. We had better get going.


David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer