How Labour has redistributed from rich to poor

New data shows how tax changes have benefited the poorest 10 per cent.

Robin Cook was always fond of hailing Tony Blair's Labour government as the most redistributive since Lloyd George, and now here's the data to prove it.

The graph below, from the Institute for Fiscal Studies, shows how New Labour's tax and benefits changes have redistributed wealth from the poorest to the richest since 1997.

Distributional-impact-Labour-1024x723

Under Labour, the poorest 10 per cent of households have gained by 13 per cent, while the richest 10 per cent have lost by almost 9 per cent.

With the Tories still committed to their grossly regressive plan to raise the inheritance-tax threshold to £1m and the Lib Dems' tax plans likely to widen income inequality, it's clear that only Labour can be trusted to combine redistribution with growth.

The party's deficit reduction plan, based on a ratio of 67 per cent spending cuts to 33 per cent tax rises, is also the most progressive.

The Tories plan to reduce the deficit through an 80:20 mix of cuts and taxes, while the Lib Dems, as Nick Clegg boasted to the Spectator, plan to do so through spending cuts alone.

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George Eaton is political editor of the New Statesman.

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Richmond is a wake-up call for Labour's Brexit strategy

No one made Labour stand in Richmond Park. 

Oh, Labour Party. There was a way through.

No one made you stand in Richmond Park. You could have "struck a blow against the government", you could have shared the Lib Dem success. Instead, you lost both your dignity and your deposit. And to cap it all (Christian Wolmar, take a bow) you self-nominated for a Nobel Prize for Mansplaining.

It’s like the party strategist is locked in the bowels of HQ, endlessly looping in reverse Olivia Newton John’s "Making a Good Thing Better".

And no one can think that today marks the end of the party’s problems on Brexit.

But the thing is: there’s no need to Labour on. You can fix it.

Set the government some tests. Table some amendments: “The government shall negotiate having regard to…”

  • What would be good for our economy (boost investment, trade and jobs).
  • What would enhance fairness (help individuals and communities who have missed out over the last decades).
  • What would deliver sovereignty (magnify our democratic control over our destiny).
  • What would improve finances (what Brexit makes us better off, individually and collectively). 

And say that, if the government does not meet those tests, the Labour party will not support the Article 50 deal. You’ll take some pain today – but no matter, the general election is not for years. And if the tests are well crafted they will be easy to defend.

Then wait for the negotiations to conclude. If in 2019, Boris Johnson returns bearing cake for all, if the tests are achieved, Labour will, and rightly, support the government’s Brexit deal. There will be no second referendum. And MPs in Leave voting constituencies will bear no Brexit penalty at the polls.

But if he returns with thin gruel? If the economy has tanked, if inflation is rising and living standards have slumped, and the deficit has ballooned – what then? The only winners will be door manufacturers. Across the country they will be hard at work replacing those kicked down at constituency offices by voters demanding a fix. Labour will be joined in rejecting the deal from all across the floor: Labour will have shown the way.

Because the party reads the electorate today as wanting Brexit, it concludes it must deliver it. But, even for those who think a politician’s job is to channel the electorate, this thinking discloses an error in logic. The task is not to read the political dynamic of today. It is to position itself for the dynamic when it matters - at the next general election

And by setting some economic tests for a good Brexit, Labour can buy an option on that for free.

An earlier version of this argument appeared on Jolyon Maugham's blog Waiting For Tax.

Jolyon Maugham is a barrister who advised Ed Miliband on tax policy. He blogs at Waiting for Tax, and writes for the NS on tax and legal issues.