Encouraging equality: Mark Carney, governor of the Bank of England in Downing Street in July. Photo: Getty
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The power of stats, Oxford socialists – and why bankers are spooked by high inequality

Peter Wilby’s First Thoughts column. 

Inequality of income and wealth is suddenly being talked about. The extraordinary thing is that bankers, not democratic politicians, are discussing it. Recently, Janet Yellen, the chair of the US Federal Reserve, told an audience of economists: “The extent and continuing increase in inequality in the United States greatly concern me.”

Earlier this year, Mark Carney, the governor of the Bank of England, said a “relative equality of outcomes” was necessary for capitalism to function properly. Lloyd Blankfein, the chief executive of Goldman Sachs, said on CBS: “If you grow the pie but too few people enjoy the benefits of it . . . you’ll have an unstable society.”

Are top bankers worried that the masses will torch their mansions? Perhaps. What’s really spooking them, I suspect, is the realisation that capitalism doesn’t work if large numbers are too poor to buy anything. This simple idea was obvious to just about everybody for 30 years after the Second World War. Then neoliberal ideology and old-fashioned greed persuaded powerful elites to make themselves ever richer and everybody else poorer.

How to reverse the rise in inequality? Yellen had no answers; as she said, she was just laying out the facts. Carney and Blankfein vaguely exhorted their fellow bankers to be more thoughtful of others. By the sound of it, they see a case for more public spending, higher wages and more taxation of top incomes and expensive property. But the words stick in their throat.

Taxing questions

The answers should come from politicians but most have turned into technocrats, making small adjustments to regulation, taxation and spending. Grand narratives – about inequality or anything else – elude them. The shadow chancellor, Ed Balls, for instance, has already reverted to technocratic tinkering with Labour’s mansion tax, admittedly a bad idea in the first place. He says anyone with an annual income of less than £42,000 will be allowed to defer payment until the property changes hands. Given the ease with which the rich manage to declare low incomes, this sounds like another bad idea. Worse, it could encourage elderly homeowners to stay in outsized properties instead of selling them so that, perhaps by conversion into flats, they can house young families.

Rather than fiddling with a tax that won’t work, Labour should propose a wholesale reform of council tax. And for avoidance of doubt, my opinions are wholly disinterested: I don’t own anything like a £2m property. Here in Loughton, Essex, where I live quietly and unfashionably, only retired East End gangsters can afford mansions.

Figures of speech

In Would They Lie to You? – a clever little book on how powerful folk manipulate us – Robert Hutton, Bloomberg’s UK political correspondent, writes: “What a friend we have in numbers. They impress into silence people otherwise confident in their arguments.” But should we believe statistics? The other day, the Financial Times stated: “Some 86 per cent of Americans over the age of 65 have at least one chronic medical condition.” Can this be true? How does it square with claims that the old are getting healthier, as well as living longer?

The figure seems to be authoritative. I traced it to the agency responsible for US public health. But I am reminded of claims that English primary schools turn out large numbers of illiterate children. Look closely and you’ll find that the numbers refer to those judged insufficiently literate to cope with the secondary school curriculum, rather than illiterate in the sense – unable to read and write at all – that most of the public would understand the term. “Chronic medical condition”, I guess, has been similarly inflated. I am nearly 70 and consider myself in good health. But on doctor’s orders I take five tablets daily for blood pressure and cholesterol. I suppose this means I have two chronic conditions but, again, not in the sense understood by most people.

Admirable Halsey

A H Halsey, who has died at 91, was one of the greatest sociologists of his generation, an adviser to Labour’s education secretary Anthony Crosland in the 1960s and one of the last Christian socialists. He sent all of his five children to comprehensives and, ignoring colleagues who suggested private treatment, wrote letters to the health minister as he waited months for an urgent operation on the NHS. But he happily worked at Oxford University, which contributes so much to social injustice in Britain, for 28 years.

Oxford’s socialist dons nearly always leave their radical fervour at the college gates, doing little to agitate for reform of such matters as student admissions. “The place engulfs you,” Halsey once told me when I asked him to explain. “It wraps itself around you, rhetorically and architecturally.” Still, he did decline to drink the college wine.

Lengths of vanity

Does anybody finish the Guardian’s “long reads”, which usually weigh in at more than 4,500 words? I, for one, haven’t got through many, though most are by writers I read eagerly at similar length in weeklies and monthlies such as the NS or the London Review of Books. A check with Guardian-reading friends finds that many have similar problems. Narrower columns and shorter paragraphs would probably help. Yet, like many things in upmarket newspapers, the long reads probably aren’t supposed to be read. Rather, they are designed to flatter readers that, by buying such a news­paper, they show themselves to be serious-
minded and highly intelligent.

As blind as the ref

In last week’s issue, my fellow columnist Hunter Davies considered whether football is best watched at the ground or on TV at home. In rugby union, which I prefer to football, it hardly matters. Wherever I watch, I can’t tell what’s happening in the scrums, rucks and mauls. Nor can anyone else, including the referee. 

Peter Wilby was editor of the Independent on Sunday from 1995 to 1996 and of the New Statesman from 1998 to 2005. He writes the weekly First Thoughts column for the NS.

This article first appeared in the 22 October 2014 issue of the New Statesman, Why Britain and Germany aren't natural enemies

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Nick Timothy’s defence of Theresa May raises more questions than it answers

It would be better for May’s reputation if she had known about those vans.

Nick Timothy makes an eyebrow-raising claim in his Telegraph column today: that Theresa May opposed the notorious “Go Home” vans that trundled through diverse parts of the country advising illegal immigrants to leave the country – actually claiming she went as far as to block them – but the scheme was “revived and approved” in a press plan while she was on holiday.

Some people are assuming that this story is flatly untrue, and not without good reason. The Times’ Henry Zeffman has dug out a written answer from Amber Rudd saying that while Mark Harper, a junior Home Office minister, approved the vans, he informed May of the scheme ahead of time. The timeframe also stretches credulity somewhat. This is the same government department that having decided to destroy the landing cards of Windrush Britons in June 2009, still had yet to locate a shredder by October 2010. Whitehall takes years to approve advertising campaigns and even the process of hiring a van is not simple: so it stretches credulity a tad to imagine that the Home Office would sign off a poster, hire a van and a driver, all without it either coming across the desk of the Home Secretary or her special advisor. That no official faced dismissal as a result stretches it further still.

However, it is worth noting that Mark Harper, the minister who approved the vans, was the only serving minister to have worked with May at the Home Office who did not continue on in government when she became Prime Minister – instead, she sacked him from his post. The Home Office acting off its own bat would support the belief, not uncommon among civil servants at other Whitehall departments, that Britain’s interior ministry is out of control: that it regularly goes further than its ministerial mandate and that it has an institutional dislike of the people it deals with day to day. So while it seems unlikely that the vans reached the streets without May or her advisors knowing, it is not impossible.

However, that raises more questions than it answers. If you take the Timothy version of events as true, that means that May knew the following things about the Home Office: that they were willing to not only hide the facts from ministers but to actively push ahead with policy proposals that the Secretary of State had dropped. Despite knowing that, she championed a vast increase in the powers and scope of the Home Office in the 2014 Immigration Act and at the peak of her powers in 2016 did the same as Prime Minister. She made no effort to address this troubling culture for the remaining three years she served as Home Secretary, and promoted three of her juniors, none of whom appear to have done anything to address it either, to big jobs across the government. It means that she had little grip over her department an no inclination to assert it. (Indeed, this is why the Secretary of State is held responsible even for decisions that they don’t sign off – as otherwise you have no democratic accountability at all.)

If those vans were sprung on May and her political team, that is even more troubling than the idea that they approved them.

Stephen Bush is special correspondent at the New Statesman and the PSA's Journalist of the Year. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.