We need to talk about inequality
The Liberal Democrats are missing an opportunity to lead the conversation on inequality.
One reason figures like Gary Stevenson have become so popular isn’t because people agree with all of his proposed solutions. It’s because he is articulating something millions of people feel: despite working hard, many households are stressed about money and feel that they are falling behind while wealth becomes increasingly concentrated. The cost of living crisis is real. Inequality is getting more extreme. This is bad.
Too often the political response is to dismiss any discussion of taxing wealth as unrealistic. Or worse, taxing wealth is caricatured as an attempt to replace income tax altogether. That is not what many people are actually arguing for.
The real concern is whether our economy has developed mechanisms that allow wealth to compound much faster than earned income. If that’s true, then inequality will continue to widen, even when people are working, paying tax and doing “the right thing”.
And here’s the thing - this is an area where the Liberal Democrats should be far more confident.
Our tradition has never been about opposing markets. It’s about ensuring markets remain competitive, opportunity is widely shared, and concentrations of economic power don’t undermine liberty or social mobility.
We believe that while capitalism is good, unconstrained capitalism is disastrous. We believe that there is a role for the state in regulating markets to ensure delivery of outcomes that an unconstrained capitalist economy would not. Economic liberalism with social and democratic accountability.
That suggests there should be room for a serious discussion about policies such as land value taxation, reforming the taxation of economic rents, improving competition policy, and shifting taxation away from productive work where possible.
We should be engaging with people who have succeeded in putting inequality back into mainstream political discussion, and then explaining why Lib Dem solutions might be more effective than unrealistic ideals or heavy-handed state interventions.
Instead, we fall into the same trap as the rest of those in the political bubble. We dismiss the conversation altogether, leaving the political space to populists who are very good at exploiting frustration (even if they are much weaker at offering credible solutions). When we dismiss these conversations people feel like we’re dismissing their struggles. Dismissing the lived reality of the majority of people.
Tackling inequality isn’t about redistributing wealth. It’s about slowing down the concentration of economic power. It isn’t about taking from the rich to give to the poor. It’s about encouraging productive investment over passive rent extraction. It’s about preserving genuine equality of opportunity.
I’m a Lib Dem because I believe in our fundamental values. I have high confidence in our political philosophy. I also feel that Ed Davy has intellectual weight and policy credibility.
Gary Stevenson invited politicians to engage with him publicly. How great would it be for Ed Davy to meet with him publicly and say “you’re right, inequality and the cost of living crisis is bad, and he’s what we propose to do about it”.