Britain is the sixth richest country in the world. But this figure masks a much more troubling economic picture. When the UK’s richest six people control as much wealth as the poorest 13 million and when eight million people have trouble putting food on the table, it is clear that our economy is not working.
Covid-19 has brought Britain’s inequality problem into sharp focus. Deaths in the most deprived areas have been more than double those in the least deprived. BAME people are at far greater risk of dying from the disease than white people. The frontline workers we rely on to take the greatest risks during this pandemic experience some of the lowest pay and live in some of the most overcrowded housing.
This inequality is not caused by coronavirus, but inequality left us underprepared and vulnerable to its devastation. This crisis has exposed the precariousness of work, the strain on household incomes, the gaping holes in our safety net and the extent of underfunding of our public services. But it has also revealed our community spirit, our willingness to help a neighbour, to meet crisis with kindness. This new-found co-operation is something we must hold onto.
It is critical too that we learn the lessons of past recessions – learning not just from the policy choices made during the recovery but the causes of their onset. We entered lockdown as one of the most unequal countries in Europe – and this is relevant to our understanding of how we exit lockdown. Throughout history, recessions have been preceded by growing inequality, leaving economies vulnerable and condemning their recovery to being short-lived and weak.
The Co-operative Party’s report ‘Owning the Future’ explores reasons for this. History has taught us that caring for communities, tackling climate change, protecting workers and consumers, and sharing wealth more fairly cannot be left to the market alone. Instead, we must take measures which, if adopted, narrow inequality by widening peoples’ stake in the economy – ending the shareholder primacy that concentrates wealth and power in the hands of a small number of investors and executives. Polling shows that this is something the public back: only 10% of people feel that the pre-coronavirus economy prioritised sharing wealth fairly, but two-thirds want this to be the priority in what comes next.
We cannot afford to be laissez-faire. As well as ensuring the short term measures are in place to guide the economy out of lockdown, such as assurances for workers that their workplaces are safe and for employers that the transition back to work is gradual and flexible, we must put in place the strongest possible foundations for a sustained, resilient and fair recovery.
It is clear that this cannot mean a return to business as usual. A fairer economy must be more attuned to its communities, more resilient to shocks and more productive. This won’t come about by chance: it requires proactive intervention to broaden peoples’ stake in the economy, change the way economic rewards are distributed, and shift the balance of power.
Economies characterised by a bigger co-operative sector have been shown to be more equitable, productive and accountable. Rather than simply extracting profit, co-operatives benefit the communities, consumers and employees with which they interact. They represent the kind of economy we aspire to – one where business and social responsibility go hand-in-hand.