Tuesday 21 October 2008

Toynbee or Thatcher: the Tory choice on inequality:

David Cameron is for 'conservative ends to progressive means'. His argument is the following:

Labour has done little to advance progressive ideals. A government that promised social justice and economic efficiency has in fact delivered neither ... Take the fight against poverty. We can see that in the 20th century, the methods of the centre-left – principally income redistribution and social programmes run by the state – had considerable success in relieving poverty. It would be churlish to pretend otherwise. But those methods have now run their course. The returns from big state intervention are not just diminishing, they are disappearing.

Today's OECD evidence on inequality conclusively shows why his two central 'progressive Conservative' claims are wrong:-headed
(i) that the Labour record proves that 'the state has failed' to reduce poverty or inequality
(ii) that Conservatives will be more effective in addressing inequality because they know that progress is made by other means, without using the failed old methods of state redistribution.

The real choice for the opposition is this:
(1) substantiate the claim to be different and new 'progressive Conservatives' - by accepting much of Labour's political and policy legacy, and seeking to deepen it
(2) OR to return to the Thatcherite principle that reducing inequality is not something that Conservatives should address.

It is no good talking about inequality if your policies will widen the gap. That is what President Bush did with his compassionate conservatism, quoted in the OECD report as evidence of concern about inequality

‘our citizens worry about the fact that our dynamic economy is leaving working people behind. Income inequality is real; it's been rising for more than 25 years’.

But regressive tax redistribution increases inequality by transferring income and wealth upwards; progressive tax changes and investment in public services are needed to reduce it. The Tories have focused on reducing inheritance tax for estates up to £2 million. They risk repeating the Bush pattern: talking about inequality, while actively widening the gap, as Paul Krugman has consistently show

The message for the Conservatives: you can't be pro-Polly Toynbee on relative poverty and pro-Margaret Thatcher in believing that the state should not promote greater equality at the same time.

The party would - I think - prefer the latter. Does their leadership agree?

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