Saturday, May 13, 2006

 

Labour has helped reduce inequality

It really annoys me when critics of Labour claim inequality is greater currently under Blair, than at any other time. The easily missed piece in today's Guardian proves this jibe incorrect as inquality now is less than in 2000 when Labour's tax and spending plans had not changed from those of John Major. Since then, inequality has decreased substantially largely through increased benefits to the lower paid, pensioners and families with children. So whatever the shortcomings of Blair's government, it has pursued a redistributive economic policy and millions have benefited. I for one hope the trend continues apace and helps shore up Labour's core vote in 2009-10.

But this is not to say there is not a severe problem. The richest 20% of British families earned 16 times that of the poorest 20%, a relationship which narows to four times after taxes and benefits are taken into account. Inequality is only just back to the level inherited by Blair when he came to power in 1996-7. Steady economic growth worldwide has provided the dynamic for large accretions of wealth by the already wealthy; as capitalism has inherent tendencies to produce inequality Labour have done pretty well in inhibiting such forces. But we don't need the INS statistics; our eyes(at least up here in the north) provide daily proof that far too many families and children suffer the miserable depredations of poverty.

Comments:
that's nice to see, it's just a matter of how long we can stay in government. also, nine years is a pretty long time, especially when we have just reached the levels left to us by the tories!

do you teach Blitz til Blair? (any exam tips? ;o) )

btw the link isn't working
 
No, don't teach such a course-is it at Manchester?- but I like the name so much I might do so in the future!
 
Well, Skipper, it depends whether the glass is half-full or half-empty. As I understand it the Gini Coefficient stood at 0.34 in 1990 (according to a sudy by Jonathan Shaw for the IFS) and (according to the Daily Telegraph 13/5/06) it stood at 0.32 in 2005 (although oddly they have the higher figure of 0.36 for 1990). Jonahan Shaw's figures show inequality increasing during Blair's first term, then falling since 2000. The reduction since 2000 does seem to be due to changes in tax-and-benefits introduced by Labour (his projections show that without these inequality would have increased substantially). That's the half-full part of it. The half-empty part is that the net effect of Labour's policies is to leave inequality pretty much unchanged and considerably greater than in 1979 (when Gini stood at 0.25). Labour have been unable to reverse the damage done by Thatcherism. (Good post about her voice, incidentally, it always made my skin crawl).Yes, it would have been worse under the Tories, but it's pretty bloody awful.
 
Interesting additional points Polly-holic, but if you accept the basic framework of free enterprise, as most social democratic parties now do, then the forces making for increased inequality are going constantly to produce this end.
PS I don't know what the alternative is either- any ideas?
 
Acccepting the "basic framework of free enterprise" is one thing, but New Labour's mindless worship of the market (exemplified by its blind eye to PFI profiteering) is another thing altogether. I'm not sure New Labour can really be called "social democratic"; they accept far too much of Thatcher's legacy. In reply, I suppose it can be argued that more traditional social democratic policies (and I'm sure you know the sort of thing I mean) are not, at this point in history, feasible: they would be unpopular with the electorate and would cause capital-flight and increased unemployment. On the other hand, some other European countries are less unequal than the UK and somehow combine this with reasonably efficient economies. I don't - or won't - believe that we just have to accept as unavoidable Thatcherite levels of inequality or the wretched spectacle of the poorest among us struggling to survive each week on a tiny fraction of what the Labour Prime Minister's wife spends on a hair-do. I suppose I'm just a hopeless utopian.
 
What's so bad about inequality? So long, of course, that the poorest are not poverty-stricken - this, to the capitalist's mind, is inefficient, never mind socially reprehensible.
 
And Skipper, could you amend the link to the piece in today's 'Guardian'? It doesn't seem to be working at the moment.
 
El Tom and SPL, thanks for pointing out the link to the Guardian was not working- I seem to have fixed it now.
Skpr
 
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