Thomas Piketty with Labour strategist and peer Stewart Wood in The Gladstone Room in parliament. Photograph: George Eaton.
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Thomas Piketty comes to parliament: what we learned

A review of the French economist's appearance with Miliband strategist Stewart Wood.
 

After his recent bravura performance at IPPR, Thomas Piketty, the intellectual of the moment, appeared at parliament today in conversation with Ed Miliband's senior strategist Stewart Wood. The Labour peer and shadow cabinet office minister was one of the first in Westminster to recognise the significance of Piketty's Capital in the Twenty-First Century, tweeting before its British release: "Thomas Piketty's book predicting ever-growing inequality is making waves. We need to start debating how to respond." Today, in the cavernous surroundings of The Gladstone Room (where the PLP and the 1922 Committee hold their weekly meetings), they did just that.

The most politically notable moment of the event, hosted by Class, came when Piketty warned Labour that its planned top tax rate of 50 per cent was "too low" to significantly reduce inequality (caused, as he meticulously documents, by the tendency of the rate of return on capital to outstrip the average growth rate of the economy). The Frenchman rightly noted the absence of evidence to suggest that higher tax rates than this on "very high incomes" (defined as £1m+) will "damage the economy". Although polls show that most voters support a 60p rate, it is a reminder of Labour's self-imposed political limits that there is no prospect of Miliband supporting it (even the 50p rate has been cautiously defended as a temporary deficit reduction measure).

Piketty was warmer about the party's backing for a mansion tax on properties worth more than £2m, but urged it to go much further in taxing wealth in general. One of the justifications he offered was that this would enable governments to reduce taxes on the poor and allow them to begin accumulating capital.

He emphasised, however, that redistribution was a necessary but insufficient solution to inequality. As well as taxing the wealthy more and the poorest less, the state must also engage in "predistribution": stopping inequality before it starts. On the day that the Lib Dems pledged to ring-fence the education budget in future coalitions, he championed investment in education and skills, and a higher minimum wage as the key to a more equal society.

While Piketty is often assumed to be a revolutionary socialist (partly owing to his book's conscious allusion to Marx), his comments today were a reminder that he is actually a mainstream social democrat. He noted several times that he has "no problem with inequality per se" and argued that "up to a certain point, it can be useful for innovation and for growth".  It was "extreme inequality" that was indefensible, he said.

Challenged by my former NS colleague Mehdi Hasan on whether Labour's programme was truly bold enough to respond to Piketty's diagnosis, Wood emphasised the party's commitment to both redistribution and predistribution and said he was keen to encourage "debate" among all parts of the political spectrum on how to do more.

Among the wonkish discussion, some light relief was supplied by Len McCluskey. In his question to Wood, the Unite general secretary mistakenly referred to him as an Arsenal fan. The lifelong Liverpool supporter, whose official title is Lord Wood of Anfield and whose Twitter avatar is the club's badge, looked appropriately mortified.

P.S. I interviewed Wood earlier today on Piketty's work and will be posting the conversation on The Staggers later this week.

George Eaton is political editor of the New Statesman.

Photo: Getty
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It's not WhatsApp that was at fault in the Westminster attacks. It's our prisons

Britain's criminal justice system neither deterred nor rehabilitated Khalid Masood, and may even have facilitated his radicalisation. 

The dust has settled, the evidence has been collected and the government has decided who is to blame for the attack on Westminster. That’s right, its WhatsApp and their end-to-end encryption of messages. Amber Rudd, the Home Secretary, wants tech companies to install a backdoor into messages like these that the government can then access.

There are a couple of problems here, not least that Adrian Russell aka Khalid Masood was known to the security services but considered to be low-risk. Even if the government had had the ability to gain entry to his WhatsApp, they wouldn’t have used it. Then there’s the fact that end-to-end encryption doesn’t just protect criminals and terrorists – it protects users from criminals and terrorists. Any backdoor will be vulnerable to attack, not only from our own government and foreign powers, but by non-state actors including fraudsters, and other terrorists.

(I’m parking, also, the question of whether these are powers that should be handed to any government in perpetuity, particularly one in a country like Britain’s, where near-unchecked power is handed to the executive as long as it has a parliamentary majority.)

But the biggest problem is that there is an obvious area where government policy failed in the case of Masood: Britain’s prisons system.

Masood acted alone though it’s not yet clear if he was merely inspired by international jihadism – that is, he read news reports, watched their videos on social media and came up with the plan himself – or he was “enabled” – that is, he sought out and received help on how to plan his attack from the self-styled Islamic State.

But what we know for certain is that he was, as is a recurring feature of the “radicalisation journey”, in possession of a string of minor convictions from 1982 to 2002 and that he served jail time. As the point of having prisons is surely to deter both would-be offenders and rehabilitate its current occupants so they don’t offend again, Masood’s act of terror is an open-and-shut case of failure in the prison system. Not only he did prison fail to prevent him committing further crimes, he went on to commit one very major crime.  That he appears to have been radicalised in prison only compounds the failure.

The sad thing is that not so very long ago a Secretary of State at the Ministry of Justice was thinking seriously about prison and re-offending. While there was room to critique some of Michael Gove’s solutions to that problem, they were all a hell of a lot better than “let’s ban WhatsApp”. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.