To have and have not

Britain is now a more divided society than it has been at any time since the Second World War. The extent of those divisions are documented in the report of the Rowntree Foundation inquiry into income and wealth, published last week: divisions between the bottom tenth of the population, who are 17 per cent worse off than they were in 1979, and the top tenth, who are more than 60 per cent better off; divisions between households where both partners work and those where neither does; divisions between council estates and wealthy suburbs. Until recently, the comfortably-off tended to think they need not care about such divisions. The Rowntree report expresses a different view: "Just as in the last century it was in the interests of all to introduce public health measures to combat the spread of infectious diseases fostered by poverty, so in this century it is in the interests of all to remove the factors which are fostering the social diseases of drugs, crime, political extremism and social unrest". In other words, no appeal is necessary to such unfashionable concepts as compassion and social justice, only to our wish to feel safer in the streets, in our cars and in our homes. Brute self-interest demands change.

Thus crumbles the last defence for the Tory project of the past 16 years. The Rowntree report leaves no doubt that the growth in inequality cannot be blamed solely on the global market. The Government has quite deliberately attempted to make us a more unequal society, and succeeded. Benefits have been increased in line with prices, instead of with earnings. Taxation has been made less progressive. Deregulation has made it easier for employers to pay low wages. One by one, the arguments for these policies have fallen. Greater incentives and freedom for the "wealth creators" (whatever happened to them?) were supposed to produce "trickle down" benefits for the poor, to give us higher economic growth, to create more jobs. Government ministers do not often have the cheek to repeat such arguments now. They are reduced to despairing statements about living in what Professor Patrick Minford, one of the Chancellor's economic advisers, calls "a savage world". If we don't continue on the same track, they insist, things will only get worse. But what is it about Britain that its top executives need so much carrot and its masses so much stick? Other countries, such as Canada, France and Germany have designed tax and benefit systems that have slowed down or cancelled out rises in wage inequalities. Japan has low unemployment and low inequality. All these countries, by most standards, are more economically robust than Britain.

In truth, the Tory vision for Britain has never been susceptible to rational argument, any more than was the vision of the Ayatollah Khomeni for Iran or of Stalin for the Soviet Union. You cannot, as RH Tawney once put it, argue with the choice of a soul. For Margaret Thatcher and her acolytes, inequality was not a means to an end, but an end in itself. A society where everybody knew their station - a station based, not as it once was, on birth and rank, but on wit and effort - was a good society. The unsuccessful should be as ready to applaud the rewards of success as the successful were to enjoy them.

Thatcherism has often been accused of appealing to self-interest. So it did. Just as Calvinism worked for God's elect, so did Thatcherism work for the market elect. But at heart Thatcherism was always a moral programme, not an economic one. Or, to quote Tawney again, it was an "exhilarating palpitation", which no logic could prove either right or wrong.

Even in Tory breasts there are few palpitations now. As the Rowntree report notes, the middle and professional classes are discovering an interest in reducing inequality. They have learnt that an unbridled market does not guarantee life-long success, rather a series of ups and downs. The pit, for a period at least, may await them, too. They are beginning to see the point of redistribution because they want safety nets, to redistribute between good times and bad. Some people were never invited to the party that began in 1979; but, even for those who were, the party must end soon.