London is a major reason for the UK's inequality problem. Unfortunately, City leaders don't want to talk about it
- Written by Louise Ashley, Senior Lecturer in Sociology of Work, Queen Mary University of London
In recent years, there has been growing evidence that the UK economy is in poor shape. While the latest economic figures suggest it performed better[1] as the COVID pandemic receded than was previously reported[2], the performance of sectors such as manufacturing, construction and agriculture has been revised downwards[3], leading some experts to warn of a greater risk of a recession to come.
Alongside these economic challenges, the UK faces many societal issues – including rising levels of inequality, with the country’s Gini coefficient[4] projected to reach a record high of 40.8%[5] in 2027-28. In 2022, the richest fifth of the UK population had an income more than 12 times[6] that of the poorest fifth.
Rishi Sunak launches a levelling up programme in Yarm, North Yorkshire while chancellor in December 2021.
HM Treasury/Wikimedia Commons[21]
On numerous occasions (both privately and in public), I have been criticised by City leaders for raising this, on the grounds that it is not only impolite but demoralising for people engaged in diversity and inclusion work, and risks setting that agenda back. I believe such defensiveness highlights how financial and professional leaders protect their privileged position – by policing the boundaries of what is “acceptable” to say about the inequalities to which their firms contribute.
Many City bosses operate within an echo chamber[22] that suggests to them there is more consensus around the City’s positive contribution to UK society than is actually the case. Their power and influence insulates them from criticism and challenge. When it does come, their defensive reaction is stifling a much-needed, nuanced public debate around how to tackle the inequalities that blight so many people’s lives.
Read more:
Class and the City of London: my decade of research shows why elitism is endemic and top firms don't really care[23]
Changing the national conversation
Over the past decade, I have conducted[24] hundreds of interviews with City of London workers at all levels, many of whom are strongly committed to a more equitable economic and social system. I believe they are well placed to help change the national conversation, by asking more of their leaders on this front.
Within many corporate organisations, the issue of inequality is positioned as part of corporate sustainability agendas, or the currently more fashionable “environmental, social and governance”. Yet like diversity and inclusion, as this agenda is implemented within a model that prioritises profit maximisation over economic justice, it may have a similarly cosmetic effect. More meaningful improvements would require business leaders to engage more closely with how we can build a more egalitarian economic system[25] that allows for shared prosperity.
The momentum to help drive these and many other changes requires a majority of the population on board. But this is more likely if business leaders are brave enough to acknowledge the UK’s key structural problems while opening up their related operations to wider scrutiny and debate.
Read more:
Poverty in Britain is firmly linked to the country’s mountain of private wealth – Labour must address this growing inequality[26]
In June, Julia Davies, a founding member of Patriotic Millionaires UK[27], warned delegates[28] at an international investment conference in London of a “real risk of actual insurrection” and “civil disruption” if the inequality gap between rich and poor is allowed to widen. There has long been clear evidence[29] that inequalities are ultimately bad for everyone in a society.
Yet consciously or otherwise, many City leaders still impose tight limits on what is considered reasonable to say about the inequalities their organisations help to create. Perhaps we should take note of the University of Bristol’s Kirsty Sedgeman, who has suggested that in pursuit of social justice, more of us need to become “reasonably unreasonable[30]”, to encourage our business and political leaders to think and act differently, and widen the conversation about the UK’s growing inequality gap.
London and its financial and professional services powerhouse are at the heart of the UK’s failing attempts to level up. We need its leaders to play a central role in our national debate about how to address this problem. This is no time for denial and distraction.
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Alongside the Conversation’s curated event The Common Good[33], expect to see Alastair Campbell, Rory Stewart, Ruby Wax, Michio Kaku, David Baddiel, Carol Gilligan, Martin Wolf and more lock horns over a packed weekend of debates, talks and performances. Explore the full programme here[34] and don’t miss out on 20% off tickets using code CONVO23[35].
References^ performed better (www.bbc.co.uk)^ previously reported (www.ons.gov.uk)^ revised downwards (www.ft.com)^ Gini coefficient (www.ons.gov.uk)^ record high of 40.8% (www.resolutionfoundation.org)^ more than 12 times (equalitytrust.org.uk)^ HowTheLightGetsIn (howthelightgetsin.org)^ the common good (howthelightgetsin.org)^ full line-up of speakers (howthelightgetsin.org)^ get 20% off tickets here (howthelightgetsin.org)^ once London is removed (www.ft.com)^ contributed (www.cityoflondon.gov.uk)^ financialisation (blogs.lse.ac.uk)^ property, infrastructure and financial assets (www.theguardian.com)^ productive investment (www.bankofengland.co.uk)^ warned (www.theguardian.com)^ heated (www.politics.co.uk)^ levelling-up bill (www.politicshome.com)^ Highly Discriminating (bristoluniversitypress.co.uk)^ Conversation long read (theconversation.com)^ HM Treasury/Wikimedia Commons (commons.wikimedia.org)^ within an echo chamber (theconversation.com)^ Class and the City of London: my decade of research shows why elitism is endemic and top firms don't really care (theconversation.com)^ I have conducted (www.researchgate.net)^ more egalitarian economic system (blogs.lse.ac.uk)^ Poverty in Britain is firmly linked to the country’s mountain of private wealth – Labour must address this growing inequality (theconversation.com)^ Patriotic Millionaires UK (patrioticmillionaires.uk)^ warned delegates (www.theguardian.com)^ clear evidence (equalitytrust.org.uk)^ reasonably unreasonable (www.google.com)^ HowTheLightGetsIn (howthelightgetsin.org)^ Dangers, Desire and Destiny (howthelightgetsin.org)^ The Common Good (howthelightgetsin.org)^ Explore the full programme here (howthelightgetsin.org)^ 20% off tickets using code CONVO23 (howthelightgetsin.org)
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