Ultra-loyal fans will remember how infuriating I found Cameron’s assertion last autumn about poverty, and how bad for poverty reduction Brown et al have been.
Now they are at it again, in their latest increasingly negative poster campaign. The one that really drives me nuts is the first – “I increased the gap between rich and poor, vote for me”.
Brown did not increase this gap. The gap increased. There is a difference. Brown took steps to try to reduce it, as the non-partisan IFS made clear in a presentation this week, which has this slide:
The Opposition on both sides – and you get this from the Left such as Polly Toynbee too – shamelessly ignore the counterfactual. How much worse would inequality be without Brown? I blame some of the attitudes taken on the Left, who were so wound up by Mandelson saying he was intensely relaxed by the rich so long as they paid their taxes that they have ignored or failed to notice how many good redistributive things have happened with those taxes.
The Oppositon claim that Brown made inequality worse would have the same logical validity as claiming a Green Government ruled by Porrit and staffed by NEF had made the world hotter, if by cratering the world economy they somehow managed to restrict temperature increases to just 1 degrees celsius. Grrr!
(Irrelevant update: CS Clark’s comment here is brilliant. I just wanted to say that.)
Posted by Matthew on March 29, 2010 at 10:26 am
There is, I think, a worthwhile debate on to what extent governments can, and to what extent G.B did, affect pre-tax and benefit inequality. This would mainly be in the job market (who has jobs and what pay they receive) but also savings, including housing (through things like planning permission).
Redistribution by tax and spending does promote income equality, and as you say the government’s impact has been quite pronounced. But naturally there are limits to this process as it is seen as unfair by the losers.
I totally agree that these issues aren’t covered well by many on right and left, however.
Posted by freethinkingeconomist on March 29, 2010 at 10:39 am
I quite agree; I would not recommend doing a ‘Brown’ all over again, until poverty is erased – even if it could be afforded. Other methods need to be tried now.
Posted by james on March 29, 2010 at 2:08 pm
I’m curious as to what other methods to reduce poverty you have in mind, Giles?
Posted by freethinkingeconomist on March 29, 2010 at 3:40 pm
Apart from redistribution? Perhaps upskilling, so that people get better jobs that pay better, for example. It is not all about wha the state does for you. Think about that first Blair term, where poverty fell pretty hard despite state austerity. Maybe it was a fluke.
Posted by james on March 30, 2010 at 9:26 am
Different conditions include increased job competition from A8 migrants – not present in the first Blair term – and also the dire economic situation that we are currently recovering from.
Given that state spending on services will be retrenched, we can expect poverty to grow – perhaps on a scale last seen in the 80s. Sadly, the progress made in recent years may be undone in a matter of months.
Posted by freethinkingeconomist on March 30, 2010 at 10:04 am
Not sure I agree with the protectionism or statism here: I like to think that the real economy CAN grow without the contribution of public services. It is a fairly fragile ‘progress’ if it can be so easily reversed
Posted by james on March 31, 2010 at 11:28 pm
There’s always statism and protectionism – it’s about who benefits. There’s no causative link between economic growth and poverty reduction.
Posted by Philip Walker on March 29, 2010 at 3:02 pm
What does that IFS chart mean? I had thought that you’d shown elsewhere something saying that incomes had increased in real terms at a roughly equal 2% p.a. across the quintiles, so is the IFS chart a relative measure?
Posted by freethinkingeconomist on March 29, 2010 at 3:39 pm
Aaaah, that is the income they get as a result the economy, the pay trends, what you get from investments, AND the government. This chart is just the cumulative effect of just the government stuff.
So incomes have kept rising thanks to the private sector delivering probably higher returns for the rich than the poor; then Brown steps in and does a large redist to the poor.
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