Curb your enthusiasmOctober 22, 2008 at 10:06 am | Posted in British Politics, New Labour, Working Class Britain | 2 Comments
There’s been some jubilation on the Labour blogs about this OECD report on income inequality, and I’m frankly at a loss to understand why. For the Anglo-centric among us, the big headline is that whilst other ‘developed’ countries have experienced an increase in inequality, the gap in Britain has narrowed dramatically. Even though the banking crisis and global recession has made the report pretty antiquated (not to mention leaving us nostalgic for those long-gone days of stability), it does provide some good news and, on first glance, offers a rebuke to people like me who have criticised the government for not doing enough.
However, if you give the report’s findings slightly more scrutiny, you’ll find that there remain several reasons to curb your enthusiasm. First, the greatest reduction occurred during 2000-2005, and whilst it’s right to identify tax credits, the minimum wage and the New Deal as contributing factors, it remains true that the main driving force behind any reduction is greater employment, and the government can’t take sole credit for every job that was created during this period of growth.
Second, after 2005 these numbers begin to stagnate, which suggests the government’s policies have had only limited success and haven’t gone so far as to substantially tackle entrenched poverty and immobility. This would be confirmed by other studies showing an increase in poverty amongst both children and pensioners, greater health inequality and declining social mobility. We should also remember that Britain remains one of the most unequal countries in the developed world, that the poor remain massively effected by the spiralling cost of living, and that this government recently doubled the amount they had to pay in income tax.
The OECD report shows that Labour has overseen a reduction in the gap between richest and poorest, and their supporters are welcome to wave it in the face of a Conservative Party which contributed to its eye-watering rise and has no substantive plans for how to reduce it further. But before they get too self-satisfied, they’d do well to remember that by their own high standards, they’re still falling short.