John Sentamu: Only shared wealth brings happiness

We must tackle the ogres of income inequality and youth unemployment for a kinder, fairer world, argues the Archbishop of York

Protesters and city workers are cheek by jowl outside St Paul's but poles apart ideologically (PA)

Why do I say that challenging inequalities of income is such an urgent task? Why do I believe that we need a culture shift to create a fairer society? After all, if someone living in the 19th century had been told that by the 21st century, nearly everyone in this country would not only have bathrooms with hot and cold running water, but also a car, central heating, every kind of electronic gadgetry, and usually more than enough to eat, they would have shaken their heads in disbelief. Or they would have imagined that people would be living in some kind of earthly paradise.

Sadly, such plenty today is tinged with bewilderment. Drug abuse and violence are rife. Mental illness seems to have become more common, not simply better recognised, over the last generation or so. Rates of self-harm among teenage girls are also high and seem to be increasing. Personal debt has hit a record high.

So what has gone wrong? What has caused the loss of paradise? David Cameron said two years ago: "Research by Richard Wilkinson and Kate Pickett, in The Spirit Level, has shown that among the richest countries, it's the more unequal ones that do worse according to almost every quality of life indicator."

The Prime Minister was right to draw attention to this book. Its essential message, backed up by sound social science research, is that inequality damages community life and the relationships that hold us together. It shows that many social problems are more common in societies with larger income differences. Sadly, Britain is among the more unequal of the rich countries. It has worse health, higher teenage birth rates, more people in prison, more mental illness, more obesity, more drug abuse, lower levels of child well-being, high personal debt, and less social mobility than the more equal rich countries.

It is a sorry picture, and one that throws new light on the puzzling contrast between the material success of the UK and her many social failings.

Among the rich countries, the United States and Portugal stand out both as more unequal than Britain and as doing worse on most of these measures. The countries that do better are the more equal societies – particularly the Scandinavian countries and Japan. Surprise, surprise! There was no social violence or looting of shops after the recent earthquake and tsunami, and the explosions at the Fukushima nuclear power plant. Why? Japan is a more equal society. What touches one neighbour, touches the rest.

Whether or not we have close friends or relatives suffering from financial or job inequality, these problems diminish the quality of life for all of us. As if to echo John Donne's lines "No man is an island ...", David Cameron, in the same speech two years ago said: "We all know in our hearts that, as long as there is deep poverty living systematically side by side with great riches, we all remain the poorer for it."

No one can doubt that we would all feel better in a society that is friendlier and more at ease with itself; a cohesive society with less violence, fewer drug problems, a healthier society with well-being for all, in which children's chances in life were fairer. We should not have to accept it as normal to feel nervous walking home alone at night in our cities, and it is a sad indictment of our society that we have young people who feel that they cannot enjoy themselves on a Friday or Saturday night without binge drinking.

Many attempts have been made to solve these problems, but new insights provide new hope. Evidence-based research confirms what many have always believed: that inequality is divisive. It weakens the bonds of caring, kindness and trust between us. Although every problem has many causes, bigger income differences seem to multiply all the difficulties of deprivation and low social status. By making the social pyramid steeper, social status becomes even more important. If we want a happier and less divided society then an important step would be to reduce the income differences between rich and poor.

At a time when the incomes of the less well-off have shown little or no improvement, top incomes have continued to increase rapidly. Added to this are the effects of unemployment. Over 20 per cent – almost a million – young people aged 16 to 24 are without jobs. The trend is upwards and the percentage is likely to be twice as high in some of the deprived areas. The worst affected area is Hartlepool, which has recorded a 3.5 per cent rise in young job-seekers, followed by nearby Darlington.

In 1942, after just 11 months' work during one of the darkest periods of the Second World War, William Beveridge, working closely with William Temple, a contemporary of his at Balliol College, produced his report on the future of the welfare state. He outlined plans for an attack, not on the military enemy but on the "five giants" – Want, Disease, Ignorance, Squalor and Idleness – which he saw as damaging society from within.

The giants that we now face are Income Inequality and rising Unemployment – particularly among young people. They harm individuals and the social fabric.

If we are not to see a generation of young people damaged by long-term unemployment and a society becoming increasingly anti-social, we need resolute action to tackle these insidious and corrosive giants.

Although the economic situation may get worse before it gets better, circumstances are still very much less difficult than they were when Beveridge drew up his plans. As we face whatever economic storms may be on the horizon, it becomes even more urgent to reduce the social fragmentation that income inequality and youth unemployment bring. It is not simply that a more cohesive and fairer society is a nicer place to live: less divided societies are also stronger and more adaptable.

A recent study from the St Paul's Institute found that 75 per cent of the financial services professionals working in the City thought that income differences were too large. In our bones we all know that huge inequalities are an anachronism which lies uneasily with the growing interdependence of our lives in the modern world. Together we must slay the giants of Income Inequality and Youth Unemployment.

In the absence of powerful counter-action, the tendency is almost always for the costs of economic difficulties to end up on the shoulders of the most vulnerable at the bottom of society's social and economic ladder. That way we will experience the damage, sense of unfairness and understandable anger which we have already seen in some countries. That will add to our difficulties and we will emerge as an even more divided and dysfunctional society.

Let us instead try to emerge from the economic difficulties of the next few years a better society. The groundswell of public opinion in favour of reducing income differences makes it easier for the government to act against these two giants.