There is still a class system in the United Kingdom. People may not like talking about class anymore, least of all the Labour party, but it is still the basis on which income and wealth are distributed. Approximately, the richest 1% own 21% of total UK wealth, with the top 10% owning 53%. In a country and economy where there are so many inherent advantages to belonging to a richer family, most notably the existence of private schools, such a stratified society in terms of wealth distribution inevitably leads to poor social mobility. The UK’s top universities still take in a disproportionate amount of private schools students (around half in Oxford), who are mostly (admittedly not all) from a relatively wealthy background, despite the percentage of students in private school education being only 7%. It is the richest few in society which continue to dominate political, business, cultural and national institutions. 22 of the current cabinet are millionaires, 19 were educated privately, and 19 went to Oxbridge.
At the same time as this upper echelon, the ‘1%’, dominates society, the working class continue to pay a disproportionate price of the failure of the economic system which creates wealth for the top 1%. It is they who will bear the highest burden of the cuts, it is they who cannot afford homes as not enough are built, and it is they who, according to Owen Jones, are being demonized. The poorest half of society, 50% of people, own only 7% of total wealth. Class consciousness and self-identification may have declined, but economically a significant portion of the population belongs to a group whose opportunities are significantly worse than those at the top.
Even the policies of the Labour government of 1945-1951 failed to address this, there may have been a post-war consensus of nationalised industries and a cradle to grave welfare state, but the class system remained, and has remained, broadly the same in economic terms. It is changing this, and hence the fundamental nature of how the British economy works, which should be Labour’s goal.
How is it to be done? Nationalised industries have already been mentioned as not having changed the class system, but they provide one vital part. To have a host of public services, including transport, utilities, banking, green industry and education, fully owned by the state, with outsourcing not done to private companies, will reduce the profit and wealth-retaining properties of the top, and provide employment opportunities for the rest, on Living Wages, decent pensions and industrial democracy. However, where the Labour governments of the post-war period went wrong is not matching this nationalised ‘towering heights’ with a fundamentally changed business model for the rest. We need fewer global chains, not paying Living Wages and in many cases not at all (Workfare, unpaid internships), and more businesses owned as co-operatives, whether consumer like the Co-operative group, or worker, like John Lewis Partnership, but going further where the business is ran by and for the benefit of all of its employers rather than a board of directors. Trade unions formed a vital part of the economic structure of the country prior to Thatcher, ensuring that worker’s wages remained high, reducing income inequality and boosting consumption, and it is the destruction and demonization of the movement, failed to be reversed by Blair and Brown, which has led to the widening income inequality of this country as unionisation, particularly in the private sector, plummets and employment relations are such that companies take on temps, short-contract workers, and outsource to low-paid employers in developing countries, giving little scope for unionisation and job safety for many people. Technological development has advanced rapidly in the last couple of decades, but this has been for the benefit of increasingly large global companies rather than for the benefit of the people. Innovation in certain sectors, particularly renewable energies and the car industry has been held back by the vested interests of a few. There is great scope for research and development to forge a new economy based on green industry supported by state-owned businesses and investment banks. Tinkering with the market to incentivise carbon reduction has not worked, only a change of the economic model itself will bring about the necessary reductions. Taxes need to be rebalanced away from the dangerous trend towards indirect taxes and back to direct, with regressive VAT reduced, the higher rate of income tax raised and more bands created to ensure the new ‘super-rich’, for whom £150,000 is a drop in the pond, pay a fair share, and the ending of the current situation which sees the highest-earners pay very little marginal national insurance, making their marginal tax rates in many cases lower than those earning much less. Taxing wealth is hard, but possible through some kind of Mansion Tax which targets those who own significant property.
It is only really by fundamentally altering the model of the British economy, away from the consensus of neo-liberal capitalism which perpetuates the inequitable class system described above, and towards the kind of economy based on the principles of Democratic Socialism where there are public services and industries which are for the benefit of the people, where business is not ran for the shareholders and board-managers but for its workers and benefit of society, where trade unions and industrial democracy form a vital part of each workplace, where green industry is promoted and technological development for the benefit of all encouraged, and where the tax system is such that it changes the burden to increase the freedom of the working class and place the burden on those who have taken, but who now must pay.