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We’re in the grip of a worldwide inequality crisis and growth in support for the far right. The two are inextricably linked and share common features – which means there’s a lot we should learn from this week’s elections in Germany. 

The election saw a historic rise in support for the far-right and a massive drop in support for the established parties of German politics. These aren’t new patterns – we’ve seen them recently in the Netherlands, Italy, America, France – but Germany had been seen as a stronger bulwark against the far-right with a historically strong economic and social model. So what happened, and should we take warnings from this?

One reason we should pay attention are the strong parallels between our situations. Germany's industrial base is struggling after years of austerity; the deindustrialised regions to the East feel left out; working people are struggling; and the inequality that began growing in the 1980s is now entrenched. The parallels aren't only in the long-term trends, either: the established centre-left SPD led a government that struggled to break out of the crises it was elected to solve, presiding over a huge surge in support for the far right. Meanwhile, the centre-right tried to answer the situation by adopting the far-right party's rhetoric and policies around immigration, only to lose support to them by validating their entire identity.

As our government yesterday abandons a policy in their manifesto (to restore foreign aid to 0.7% of GNI after cuts during the last government) and instead adopts one from Reform UK's manifesto (to boost defence spending by cutting foreign aid) we should be incredibly wary of how this could turn out.

The good news is that the German election also offered points of hope. Although in many countries, young voters have been big supporters of far-right parties that challenge mainstream politics, in Germany they instead rallied round the party that offered a clear anti-racist, anti-billionaire campaign. The unexpected revival of a progressive German left shows that offering a clear, inclusive, strong voice for equality can stop the far right.
 
Read our full take on the German elections
Companies profiting from homelessness

A joint investigation from Inside Housing and The i Paper has revealed details about the companies providing temporary accommodation to councils – and profiting enormously.

The UK has one of the highest rates of homelessness in the developed world, and so the use and cost of temporary accommodation has soared in recent years. A record high of 123,100 households were in temporary accommodation by June last year. The result is that local councils in London alone spent £114m every month on temporary accommodation. Maybe we shouldn't have sold off all those council houses. Who's to say.

Inside Housing's investigation looks at who's profiting from this. Since temporary accommodation is unregulated and councils are desperate, they say, people are being housed in garden sheds, shipping containers, and office blocks – while councils pay companies like Travelodge handsomely.

However, the biggest winners from this arrangement are middlemen companies that take properties on from landlords at a guaranteed rent, offer beds to the local council as temporary accommodation, and pocket the difference as profit. Everyone wins! Well, the landlord and the middlemen win. Nobody else does.
Read the investigation
Weekly Poll: Overseas aid
 

Do you agree with plans to cut overseas aid, and will it have an impact on inequality reduction?

Thanks to everyone who votes! The results will be reported next week.

 
VOTE NOW

What do you think about the idea of an Extreme Wealth Line? You said:

  • "I thinks its more about the gap between richest and poorest rather than the max limit. Also people shouldn't be able to influence those in power or authority."

  • "I don't know anything about it. However, rather than capping personal wealth, I would prefer a wealth tax of up to 90% for wealth increases over pre-set levels in a similar way to how income tax works. Similarly, I would also welcome 90% levels of income tax over certain levels as I believe were common in the USA and Europe in post-war years."

  • "I think it’s a great idea. There has to be a limit. Too many people are abusing everyone else, overcharging and generally taking the micky."

  • "It would need to be pegged to inflation and account for all assets. It would be hard to implement, due to tax dodges and shell companies."

  • "I think it's a helpful concept to mirror the poverty line. Neither should need to exist so both would show up the absurdity and unfairness of a system that allows them."

  • "It’s a useful metric to get discussion going. Ask folk how they think someone above it is using that wealth politically."
Inequality in Numbers

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In The News
UK's biggest banks make record profit

PositiveMoney's round up of this month's bank profit announcements has found that the UK's four biggest banks made a record profit of £45.9 billion last year, which is an insane amount of money. Bank profits massively increased after interest rates rose and are staying sky high; this profit is nearly double the average profits for 2018-21. They point out that a windfall tax on excessive profits could raise £14.7 billion this year alone, which is enough to cover the cost of ending the two-child benefit cap five times. Separately, PositiveMoney note that banks are reaping these obscene profits by reducing lending to productive sectors like manufacturing and instead lending to the financial sector.
Read more
Tell the government to rethink Ofgem

Fuel Poverty Action and a collection of other organisations are coordinating responses to the government’s consultation on the future of Ofgem, the energy regulator. Their argument is that Ofgem has failed to protect us from the rise in energy prices – and energy profits – that have hit over the past few years. As well as protecting profits, they note issues like pre-payment meters and standing charges, as well as a revolving door culture between the regulator and the big energy firms. They're asking people to use their tool to respond to the government's consultation on Ofgem, giving as much evidence as possible that our energy sector needs to be reformed.
Write a letter

The Equality Trust
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+44 (0)20 3637 0324

info@equalitytrust.org.uk