Hunger for fairness is universal. But to want fairness does not mean to want equality. Rather, it means acceptance of the economic and social reality that intelligence, muscle, effort, application and ability may vary, but rewards must remain proportionate. No one should receive more than their due desert.
Crucially, fairness means recognising that life throws everyone undeserved good and bad luck, often through no fault of their own. The commonweal should step in to correct the resulting injustices. These concepts of proportionality and necessary collective action to mitigate the accidents of luck are deeply rooted. Nearly every society levies some tax when inheritance is passed from wealthy parents to wealthy children – and every society attempts to relieve, even if sometimes not very effectively, the circumstances of the children of the poor.
According to these criteria, over the past 40 years Britain has become an increasingly less fair country. Rewards are wildly disproportionate to contribution, most egregiously at the top. There is less societal effort to compensate for the bad luck of where you are born and to whom, and more indulgence of the advantages of those who were born lucky. And when you were born has become another important lottery. Baby boomers, reaping the advantages of a 50-year property boom, generous private pensions and virtually free higher education, got lucky. A millennial is less lucky and generation Z, born after 1997, has drawn the shortest of short straws – facing a wall of unaffordable property prices, the prospect of niggardly pensions and the steepest of bills for being educated and trained. This indebtedness and educational experience is made much worse by the spectre of Covid – and, for those millions of young not double vaccinated, the risk of long Covid.
Conservatives pay lip service to fairness – but many Tory politicians enter politics not to build a fairer society but, rather, to roll back the state, lower taxes, promote individual responsibility and slay the EU. However, last week came an important moment – a recognition that they are reaching the limits of acceptability of the world they have created. It may be true that Brexit and the Tories’ parliamentary majority were built on the votes of baby boomers and those even older – but continuing blatantly to favour them is becoming political dynamite.
Chancellor Rishi Sunak, supported by the prime minister and the chair of the influential 1922 Committee, Sir Graham Brady, has signalled that he is considering not automatically raising the state pension by about £750 a year for every pensioner in line with the expected 8% increase in average earnings this summer. The triple lock, promised in successive Tory manifestos since 2010, requires pensions to rise annually at the very least by 2.5%, but if either consumer prices or wages are growing faster, then by that higher amount.
But this year the combination of earnings that fell 1.3% in July 2020 and the bounce back in July this year throws up the statistical anomaly of an 8% annual earnings increase. Pensioners will not be sharing fairly in the prosperity of all, but unfairly benefiting from a potential £3bn quirk. They will be reaping the bulk of the “savings” made through the savage cuts to the aid budget.
Worse, this piece of undeserved annual good luck, juxtaposed with the bad luck for the world’s poorest, comes just as those on universal credit are to stop receiving the vital £20 a week Covid top-up this September. In addition, students will return to university to be taught online but still charged the same fees – with many unable to get part-time jobs in the hospitality sector to supplement their income, and worried about what kind of work awaits them thereafter. Unfairness will be heaped on unfairness.
Sunak can read the runes, and he also needs that £3bn. He will slide away from honouring the triple lock commitment, probably paying a pension increase averaged over two years’ wage growth at 3.4%. But rather than talk about societal fairness, which will open the government to an avalanche of criticism, his definition of fairness will be more restricted – only to “taxpayers”, as he did to BBC’s Today programme on Thursday.
He has to keep the fairness debate as minimalist as possible because he is boxed in by another manifesto triple promise – not to raise income tax, national insurance or VAT rates, which together provide more than two-thirds of all government income. Moreover, under pressure from donors, private equity and hedge funds, he has shrunk from reforming Britain’s manifestly unfair capital gains tax regime. Nor will the wider Tory base allow him to adjust inheritance tax rates, even though what to do with baby boomer-accumulated wealth – as during the unfair 19th century when the chance of a rich relative could transform a life – is becoming a major preoccupation of young and old alike.
The only avenues open to him to raise revenue – raising corporation tax and freezing allowances – he has already taken. Britain is stuck with no revenue streams to build a fairer society.
It is a continuation of the position since 2010, which has forced economic stimulus to be provided not by flexibly managing spending and taxing, but through rock bottom interest rates and the Bank of England printing £895bn of cash under its quantitative easing policy. That, as the Bank acknowledges, stimulates the economy by lifting the prices of shares, bonds and property. But it is another undeserved piece of good luck for the wealthy who own most of the assets.
Sunak’s hints presage a government in deepening trouble. Society won’t tolerate so much unfairness with more to come, and some of the more decent Tories with their ears close to the ground are picking up the alarm signals. Tory MPs in sufficient numbers threaten both the proposed cuts in aid and universal credit. But the party is lashed to the mast of the sinking ship it has built, navigated by its reckless captain, with the aftermath of Covid and Brexit holing it below the water line. Sooner or later, and I suspect sooner, Britain will turn to a government committed to building a genuinely fairer country.
• Will Hutton is an Observer columnist