Common Dreams / Published on Friday, July 11, 2003 by the Guardian/UK
Here is a good story. Barbara and Ray Wragg recently won £7.6m ($12.4 million US) on the lottery, and naturally it changed their lives. Ray was a roofing supervisor, often leaving home at 4am to get to distant building sites. Barbara had worked for years as a nursing assistant at the Royal Hallamshire hospital in Sheffield, on 11-hour night shifts in the urology department, taking home under £150 a week.
Their lives were hard but they were an exceptionally contented couple, with married, grown-up children and a council house they managed to buy for £10,000 in the 1980s. "We felt we were kings of our castle," Barbara says. "We never dreamed of anything more." But if you think this is going to be another of those schadenfreude tales of money bringing misery, think again.
Once they recovered from the shock of the man from Coutts bank arriving on the first day bearing £5,000 in cash for their immediate needs, the Wraggs bought themselves a bigger house nearby and a Range Rover. They gave £1m to their children to pay off their mortgages and have plenty for the rest of their lives. They took several cruises and gave money and presents to friends.
Then, once they felt they had everything they wanted, the Wraggs decided to give away the rest: they have donated £5.5m to charities so far. They have visited projects, supported ventures large and small and they even gave a sizeable sum back to the Hallamshire hospital where she worked so hard for so little all those years. "We have never had so much pleasure in our lives," Barbara says.
A Labour-voting trade union member, who is not religious, she says: "Labour shaped our life and our thinking." She might, I suggest, like a hand in shaping some of the thinking about wealth of the present Labour leadership, and she laughs.
The Wraggs and their children have a rare sense of balance and sufficiency. Knowing how much is enough is what is now being lost among the new greed-is-good generation of high earners, whose pay has shot out of control.
The Wraggs' impulse to give money to others is typical of their previous status, but most untypical of the higher echelons where they now belong. The poorest tenth of households in Britain on average give 3% of their incomes to charity each year, while the top tenth give only 1%, according to the Charities Aid Foundation.
Even as top earners grow so much richer, ever faster, they see less reason to tithe themselves than they used to. The more remote they become, hidden away in their golden-gated communities, the less obligation they show to a wider society they barely belong to now.
As center-left leaders from around the world gather together today in London for the progressive governance conference - Bill Clinton, Gerhard Schröder, Göran Persson, Lula and Thabo Mbeki among them - the similarities in their political dilemmas may look slight.
Schröder's pleas for "modernization" in a profoundly social democratic society mean something different to British post-Thatcher years. Any Brownite smugness about present German troubles would be misplaced: the "inflexibilities" he castigates still produce a Germany that is richer, more equal, less poor, with enviable public services. Their unemployment is only marginally higher than ours on the best measure while our poverty is far worse.
However, for all the differences, a thin red thread will still unite them all: they all, in theory, subscribe to the ideal of fairness: Tony Blair's new word. Some will call it equality of opportunity, others might even call it equality. But there could be no better place to consider how hard it is to achieve than in Britain now.
Institute for Fiscal Studies researchers, using the latest figures, show the powerful forces of inequality driving against the government's best endeavors. Here, they say, is a chancellor who is the greatest Robin Hood in history.
The IFS tracks 400 policy measures by which he has taken a monumental £50bn in taxes and redistributed it to the poor. The bottom tenth have seen their incomes rise by a real 15%, while the top tenth have had an extra 3% taken off them.
Even so, to hit his quarter mark on abolishing child poverty, the chancellor is still 200,000 children short. (His last chance requires adding a hefty £5 to child tax credit by next April, in a hard year.) The IFS work shows how hard it is to reach these targets while the forces of inequality go unchecked.
The Gini coefficient measures inequality: it rose sharply under Thatcher, fell slightly under Major and has risen to, and remains at, new highs under Labour. So, although the poorest 40% have seen big rises in their income since 1997, the richest 20% have jumped up and away from the middle, and the top 1% distort the whole picture.
Put it another way, over two-thirds of people now earn below-average income and soon it will be 70%, according to Income Data Services, as the number of the low paid grows and pay at the top swells.
Does the widening gap matter? There will be different views on that around the progressive governance table. The old Third Way of Blair and Clinton always said it didn't: all that matters is improving the lot of the poorest. The trouble is, in the end the two things are intimately related.
Social mobility increases most in the countries with the smallest wealth gap. The US-UK view that what happens among the rich does not matter has led to the widest and fastest-growing equality gaps in those low-tax countries. The American dream turns out to the great American self-delusion: of all western countries American poor children are the least likely to escape their backgrounds.
British social stagnation is hardly better. Persson, prime minister of Sweden, will tell a different story about his country, Norway, Denmark, the Netherlands and Finland. With the narrowest gap between top and bottom and the most social mobility, they do think the gap matters. They prove that social norms can be set to agree fairer pay ratios between bottom and top in organizations.
One of the most powerful papers to be delivered at the conference will come from Sweden on how to achieve greater social mobility. First must come more equality of income: there are no poor children in Sweden, none living below the EU measure of 60% of median income. But the Swedes found education had little impact on social mobility: school comes too late.
After income equality, the other great motor of Nordic social mobility is decades of intensive childcare in nurseries everyone uses, so that children arrive at school already equal, undamaged by social differences. Tony Blair's vision of two babies in hospital from opposite ends of society each fulfilling their potential depends on educating them before it's too late. It can be done.
Far harder for Tony Blair is the Nordic message that fairness requires grappling with tearway incomes at the top. If he's looking for renewal, he should invite Ray and Barbara Wragg to give some talks on greed and sufficiency to the Institute of Directors and the CBI.
