Over the last 30 years the Anglo-Saxon world has adopted the most disingenuous of economic systems. Under the guise of capitalism for all, we have produced an extraordinary amount of capital but an ever diminishing number of capitalists. Rather than trickling downwards, wealth has leveraged upwards – denying increasing numbers of people the ability to truly own, trade and prosper.
In 1976, excluding property, the bottom half of the UK population owned 12% of the marketable wealth; by 2003 that had fallen to just 1%. In the same period, the share enjoyed by the top 10% rose from 57% to 71%. Even when property is included, the bottom half of the population still only owns just 7% of the country’s wealth.” David Cameron recognised all of this and spoke at Davos early this year of the need to recapitalise the poor and create a capitalism that works for all. The key political aim of this truly transformative conservatism must be the generation of an asset effect for the decapitalised bottom half of society.
In Britain today, the poorest quarter of the population own less than 1 per cent of the UK’s total assets. To be poor is not simply to be without income but to be without the assets necessary to have a meaningful stake in our capitalist democracy. Assets determine a person’s ability to plan, to invest and secure a future their choosing.
Assets must, however, come from somewhere, and since redistribution and expenditure via the state has such a poor record in alleviating dependency, a fresh approach is required. Welfare or public expenditure should move from a spending to an investment model. The aim must be to free the poor from welfare subsidy through the generation of asset independence.
I am very interested in the capitalisation of welfare streams. The only real viable source for welfare capitalisation is housing and child benefit. Councils have used their housing stock to generate cash income for benefit dependency for generations. By constantly raising rents, councils have created housing that the working poor cannot afford. Some sort of redress is required – a capital or asset credit, financed by a council bond, should be applied to those whose long-term benefit has, in effect, subsidised council receipts. This credit should be a tradable asset that, when conjoined with other new ventures such as community shares or social investment, can generate an asset effect for those whose routes out of poverty are presently so curtailed.
That’s not fair and it’s not right. It’s now vital that we put wealth back into the hands of the poorest so they can not only lift themselves out of poverty – but keep themselves out too. We won’t do that through the old approaches of shuffling state money around and reinforcing the culture of dependence. Through decentralisation and innovation we can succeed where the old-fashioned top-down bureaucratic approaches have failed.
Create a community right to buy. Allow local community groups to register an interest in a local eyesore or decrepit building, whether privately or publicly owned. For a fair market value, such legislation can allow local social enterprises six months to put together a funding package to turn a liability into an asset for a transformative local business.
There are many other ideas; the scaling up of employee share ownership and the extension of management buyouts to workers and social enterprises. A Community Allowance to bridge the administrative nightmare that is moving from benefits to part-time work. Community share issuance offers the prospect of popularising local ownership; the melding of time banks with equity investment; the conversion of sweat equity into real wealth.
All of the above offer the real opportunity to address the contemporary asset deficit and convert an ideology of ownership into a practised and fully participated reality. The essence of the new Conservatism is the priority of associative relationship; this is the coming political economy of that self-same vision – challenging the class-based nature of our society as never before, it offers a new Tory vision of the British commonwealth.