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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Why Jeremy Corbyn’s evolution on Brexit matters for the Scottish Labour party

Scottish Labour leader Richard Leonard, an ideological ally of Corbyn, backs staying in the customs union. 

Evolution. A long, slow, almost imperceptible process driven by brutal competition in a desperate attempt to adapt to survive. An accurate description then by Shadow Chancellor John McDonnell, of Labour’s shifting, chimera of a Brexit policy. After an away day that didn’t decamp very far at all, there seems to have been a mutation in Labour’s policy on customs union. Even McDonnell, a long-term Eurosceptic, indicated that Labour may support Tory amendments when the report stages of the customs and trade bills are finally timetabled by the government (currently delayed) to remain in either “The” or “A” customs union.

This is a victory of sorts for Europhiles in the Shadow Cabinet like Emily Thornberry and Keir Starmer. But it is particularly a victory for Scottish Labour leader Richard Leonard. A strong ally of Jeremy Corbyn who comes from the same Bennite tradition, Leonard broke cover last month to call for exactly such a change to policy on customs union.

Scotland has a swathe of marginal Labour-SNP seats. Its voters opted voted by a majority in every constituency to Remain. While the Scottish National Party has a tendency to trumpet this as evidence of exceptionalism – Scotland as a kind-of Rivendell to England’s xenophobic Mordor – it’s clear that a more Eurocentric, liberal hegemony dominates Scottish politics. Scotland’s population is also declining and it has greater need of inward labour through migration than England. It is for these reasons that the SNP has mounted a fierce assault on Labour’s ephemeral EU position.

At first glance, the need for Labour to shift its Brexit position is not as obvious as Remainers might have it. As the Liberal Democrat experience in last year’s general election demonstrates, if you want to choose opposing Brexit as your hill to die on… then die you well may. This was to some extent replicated in the recent Scottish Labour Leadership race. Anas Sarwar, the centrist challenger, lost after making Brexit an explicit dividing line between himself and the eventual winner, Leonard. The hope that a juggernaut of Remainer fury might coalesce as nationalist resentment did in 2015 turned out to be a dud. This is likely because for many Remainers, Europe is not as high on their list of concerns as other matters like the NHS crisis. They may, however, care about it however when the question is forced upon them.

And it very well might be forced. One day later this year, the shape of a deal on phase two of the negotiations will emerge and Parliament will have to vote, once and for all, to accept or reject a deal. This is both a test and an incredible political opportunity. Leonard, a Scottish Labour old-timer, believes a deal will be rejected and lead to a general election.

If Labour is to win such an election resulting from a parliamentary rejection of the Brexit deal, it will need many of those marginal seats in Scotland. The SNP is preparing by trying to box Labour in. Last month its Westminster representatives laid a trap. They invited Corbyn to take part in anti-Brexit talks of opposition parties he had no choice but to reject. In Holyrood, Nicola Sturgeon has been ripping into the same flank that Sarwar opened against Richard Leonard in the leadership contest, branding Labour’s Brexit position “feeble”. At the same time the Scottish government revealed a devastating impact assessment to accompany the negative forecasts leaked from the UK government. If Labour is leading a case against a “bad deal”,  it cannot afford to be seen to be SNP-lite.

The issue will likely come to a head at the Scottish Labour Conference early next month, since local constituency parties have already sent a number of pro-EU and single market motions to be debated there. They could be seen as a possible challenge to the leadership’s opposition to the single market or a second referendum. That is, If these motions make it to debate, unlike at national Labour Conference in 2017, where there seemed to be an organised attempt to prevent division.

When Leonard became leader, he stressed co-operation with the Westminster leadership. Still, unlike the dark “Branch Office” days of the recent past, Scottish Labour seems to be wielding some influence in the wider party again. And Scottish Labour figures will find allies down south. In January, Thornberry used a Fabian Society speech in Edinburgh, that Enlightenment city, to call for a dose of Scottish internationalism in foreign policy. With a twinkle in her eye, she fielded question after question about Brexit. “Ah…Brexit,” she joked. “I knew we’d get there eventually”. Such was Thornberry’s enthusiasm that she made the revealing aside that: “If I was not in the Leadership, then I’d probably be campaigning to remain in the European Union.”