Surveys show a substantial majority of the electorate agree that differences in income are too large and that ordinary people don't get a fair share.
The Institute for Fiscal Studies reports that last year incomes among the top 1% grew at the fastest rate in a decade. According to the Sunday Times Rich List, the top 1,000 are £60.2bn better off this year than in 2010, bringing their collective wealth close to the record pre-recession levels. The High Pay Commission reveals that FTSE 100 chief executives are on average paid £4.2m annually, or 145 times the median wage – and on current trends will be paid £8m, or 214 times the median, by 2020. In the financial sector, even the CEO can seem modestly rewarded: this year, the top-paid banker at Barclays will get £14m, nearly four times the chief executive's earnings and 1,128 times more than the lowest-paid employee receives. The latest news is that Lloyds Banking Group plan a £2.57m final payday for Eric Daniels, the former chief executive, and a massive signing on deal for his replacement Horta-Osorio was given a £13.5m package to lure him from Santander to replace Mr Daniels, including £4.5m in shares for his first year. Later he will be eligible for a bonus of 2.25 times his £1.06m salary and up to 300 per cent of his £1.2m "reference salary" in long-term shares.
Meanwhile, once inflation is taken into account, most people's incomes are set to fall, after 15 years of virtual stagnation. Between 1996-7 and 2007-8, the earnings of someone in the middle of the income distribution rose (1997 prices) from £16,000 to £17,100 – barely £100, or less than 0.7% a year. Even the increase for those quite near the top of the income scale, better off than 90% of their fellow citizens, was unspectacular. Their inflation-discounted pay crept up from £36,700 to £41,500, or less than £450 (1.2%) a year. The top 0.1% scooped the jackpot. They got a £19,000 pay rise every year, taking their incomes to £538,600, a gain of 67% over 11 years. The commission gives no figures for the top 0.01%, but we can be confident they did even better.
In Britain and America during the neoliberal era: the very rich are soaring ahead, leaving behind not only manual workers but also the middle-income masses, including doctors, teachers, academics, solicitors, architects, Whitehall civil servants and, indeed, many CEOs who don't run FTSE 100 companies, to say nothing of the marketing, purchasing, personnel, sales and production executives below them. Many of the not-so-rich were born into the professional classes and high expectations. Now, to their surprise, they find themselves struggling. In income distribution, their interests are closer to those of the mass of the population than to people they once saw as their peers.
Why can't socialists harness workers' anger against the super-rich? One reason why is the working classes having little daily contact with the rich and little knowledge of how they lived, they simply didn't think about inequality much. Sociologist Garry Runciman observed: "Envy is a difficult emotion to sustain across a broad social distance." Even now, most Britons underestimate the rewards of bankers and executives. Top pay has reached such levels that, rather like interstellar distances, what the figures mean is hard to grasp. As psychologists will tell you, fear of loss is more powerful than the prospect of gain. The struggling "middle classes" look down more anxiously than they look up. Polls show they dislike high income inequalities but are lukewarm about redistribution. They worry that they are unlikely to benefit and may even lose from it; and worse still, those below them will be pulled up sufficiently to threaten their status.
This generation of the "middle classes" has internalised the values of individualist aspiration, as zealously propagated by Tony Blair as by Margaret Thatcher. It does not look to the application of social justice to improve its lot. It expects to rely on its own efforts to get ahead and, crucially, to maintain its position. This is exactly the mindset in the US, where individualist values are more deeply embedded. Americans accepted tax cuts for the rich with equanimity. Better to let the rich keep their money, they calculated, than to have it benefit economic and social inferiors.