Why isn’t inequality a central issue in this election?

Inequality ought to figure much more sharply in this election than it has done so far.   The reasons are obvious – the grotesque injustice in the widening gap between the top 1% (and more particularly the top 0.1% and most of all the top 0.01%) and the rest of us, the way that austerity has been manipulated to hit the poorest far harder than the rich, the brazen myth that markets generate a trickle-down that enriches all when in fact they have driven a flooding-up of wealth to the top, the scandal of massive tax avoidance by the super-rich as one of them once declared that “only little people pay taxes”, and the unfairness of remuneration systems guaranteeing huge bonuses and lucrative long-term incentive plans to many of the miscreants who caused the crash and numerous financial scandals in the first place.    But there’s another reason why inequality should now be centre-stage in this election: it causes slower, not faster, growth.

The OECD, the West’s most important thinktank, has reported that the UK economy would have been more than 20% bigger if if the rich-poor gap hadn’t widened since the early 1980s.   Nor is this a one-off exception.   The OECD survey covered its 34 rich country members, and found that rising inequality had knocked more than 10% off growth in Mexico and New Zealand, 9% in Finland and Norway, and 6-7% in the US, Italy and Sweden.   It’s striking that the OECD, which is certainly not a Left-campaigning outfit, proposed higher top rates of income tax, scrapping tax breaks that tend to benefit higher earners, and switching taxes from incomes to property and wealth.

The OECD also had other highly relevant lessons for Britain.   They emphasised that it’s not just poverty (i.e. the incomes of the 10% lowest paid) that inhibits growth, but the bottom 40% more generally, including the vulnerable lower middle classes at risk of failing to benefit from what little recovery there has been.   Anti-poverty programmes will not be enough.

Part of the policy to reduce inequality must also be the recognition that 35 years chasing the chimera of faster growth by cutting corporation tax must now be ended.   It is stunning today to realise that it has been cut from 52% in 1980 to 21% now.   Yet it did not produce faster growth, it led to lower growth.   In the 30 years 1950-80 average annual GDP per capita income growth in the UK was 2.4%; in the next 30 years 1980-2010 when markets were let rip, finance deregulated and privatisation rampant it fell to 1.7%.   It is also worth noting that if UK companies paid, proportionately, as much tax as they did in the last year of Thatcher, the UK would now be £30bn better off.

 

7 thoughts on “Why isn’t inequality a central issue in this election?

  1. My dear Mr Meacher. You are a true socialist with a real social conscience. Hopefully, there are many others like you in the Labour Party but unfortunately, when it comes to society in general, you might be in the minority.

    I’m no psychologist but think that these days too many people like to think that they are “better” than others and believe that they deserve to be in better circumstances, have more money and worldly goods, etc., than the masses. So perhaps they’re not so keen on less fortunate people being given a hand up, as it makes them feel good about themselves to keep others down. Of course, it shouldn’t be like this, but I fear that perhaps it is. So much for human nature.

    The worst culprits appear to be those in our present government, who have a very poor opinion indeed of those far less fortunate than themselves. IDS refers to them as “stock”!! – and these are the people who are in a position where they could make a difference!

    The whole system is geared to make the rich richer and keep the poor poorer:-
    I used to work 9-5 and paid a fair amount of tax. I then became self employed and, although I was earning far more than before, I paid less tax as I could claim for travelling expenses and meals out, which I couldn’t do before. I felt this was unfair on other 9-5 workers, who couldn’t claim tax relief for anything, but that’s how the system worked.

    Now that I can no longer work though illness I’ve had to cash in my personal pension as I have used up my savings as ESA doesn’t pay me enough to live on. As the 25% lump sum brings my savings over £6,000, the DWP are deducting £1 a week for every £250 over this amount and my local council are also deducting the same amount from my Council Tax benefit. So, for every £250 I am losing £104 per year!! (£2 x 52 wks). The government’s assumption is that I would earn this amount in interest, but this represents an interest rate of over 40% whereas the best rate currently available is 4% for over 65s (for which I don’t yet qualify). Is this fair? Millionaires are whinging about a possible Mansion Tax, even though they wouldn’t even notice the payments!

    As we’re in a “what’s in it for me?” type of society, the point needs to be made that it’d be better for everyone if such inequality didn’t exist here. Unfortunately though, I think it’ll be very difficult to get people to see that it’d be to their advantage to increase equality, as they won’t want to believe it!

    In the debate on inequality a few months ago you quoted from the book “The Spirit Level” which explained how everyone in more equal societies benefited from having less inequality. Perhaps this book should be obligatory reading for those in power who could make a difference.

    However, getting the point across to the general electorate might be a different matter altogether. So, to answer your question, this might be the reason why inequality isn’t a central issue to the election, but I do hope that it’s an issue that Labour will tackle once they are back in power.

  2. You may as well ask; why aren’t political and corporate corruption and unemployment central issues in this election or the deaths at Mid Staffs, (which apparently never happened despite the completely damning findings of the Francis report,) and why is Andy Burnham still in his job, why haven’t Tony Blair and Jack Straw finally been arrested, why are we still bombing women and children who pose no threat whatsoever to our national security in the Middle East, why is TTIP being waved through, (at European level,) almost without comment or criticism, the, “why,” list is not endless but it is pretty extensive.

    Answer the first, (largly rhetorical,) question and the answers to all the other are largely self evident.

    Cui bono?

  3. Hum one is right that big companies dont pay their share of taxes but look at government who advice their mates in jobs to be paid by going to use offshore accounts
    Funny isnt it when those ninty nine percent who aint rich pay taxes whist the rest pay nowt or hardly anything smell the coffee so to speak ttip another why even have we to sign it we trade ok without it it seems cam and co want to bind us to the yanks well and truly funny I thought we were british but signing this so called agreement would open our doors allowing the yanks to take us to court for anything they didn’t like if we earn and pay just over a quarter of our wages back in tax and ni then why cant the rest of the one percent pay theirs nah having thatcher in allowed the start of this downfall brought on by greed jeff3

  4. Incidentally and just for the record; my wife who is disabled and who hasn’t been able work for nearly 10 years now, claims ESA, (and income support for me whilst I’m still not working,) and we manage quite well on it, although the prospect of further cuts is frightening.

    Benefits were never intended to support, “a middle class life style,” they’re supposed to be a safety net of last resort, (with a bit of dignity,) whilst people have no other means of support and on that score not only do I have no complaints I’m actually incredible grateful for them.

    Particularly when you read about what’s happening to poorest, the disabled, (particularly the mentally ill,) and the long term unemployed in places like America.

  5. This comment from Today’s Independent about an article about Newham, (Labor,) Council Hounding a man to death for £800 sums the current situation up extremely well:

    http://www.independent.co.uk/news/uk/home-news/man-killed-himself-after-benefit-changes-left-him-owing-800-inquest-told-10021877.html

    Your readers may not know that the picture at the head of this article is the brand spanking new Nowham Town Hall, address 1000,Dockside Road,E16 2QU, built by London Borough of Newham for itself at a cost of £100 million.

    Lurking inside is Mayor Sir Robin Wales who is waiting, even anxious, to receive letters and phone calls from residents and others wanting to know why and how London Borough of Newham was able to write a cheque to itself for £100 million to pay for the new Town Hall, but unable to find any way of mitigating its own mistake in carrying forward a debt without informing the owner. This must be the fitting monument to Iain Duncan Smith and his reduction of housing benefit from £89-39 to £44-75.

    Unfortunately the Town Hall bureaucrats do not escape. There is a gigantic difference between crocodile tears of sorrow at not being able to help and the actuality of not helping. That difference is the death of a citizen. One of their own.

    So the Conservative Government and the Labour Council:- doing very well for themselves. Those that they are responsible for :- doing not so well.

  6. “Inequality ought to figure much more sharply in this election than it has done so far. “…MM.

    Mr Meacher, Take ten minutes to run a search to see who owns the MSM (Mockingbird Media). You will then comprehend very well why the Inequality narrative cannot take its rightful place in the public eye.

    The Fourth Estate insofar as it ever was truly independent is now a complete failure as one of the mainstays of proper Governance for the benefit of the people. Those other Pillars, the Monarchy, the Justice system, and Parliament itself, have joined the Fourth Estate in failure as the Incorporation of Government and all of its institutions into the sick Neo-Liberal “for profit” ideology has turned the proper principles of good governance onto its head. Government has been captured by the Oligarchy of the City of London. Inequality as a narrative will have to be forced onto the agenda by mass protest. Peacefully if the Corporate Coppers cease acting ultra vires. Thinga are too far gone to permit ever again such wealth being generated by the Fiat/Debt con.

  7. In the speech he gave in my town yesterday, Ed Miliband said he wants to fight inequality. He also quoted from the OECD, saying that the more equal societies are the most successful.

    So we’re getting there!

    All that remains now is for Labour to win this election and make the necessary changes to make it happen!

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