Friday 24 July 2009

Rip off research

“The way I see it,” explained Evan Harris MP at the Fabian public attitudes seminar in Birmingham, “it's poor people taking money from society they’re not entitled to or it's rich people taking money from society they’re not entitled to. Personally, I’m far happier with the poor evading system as they’re poor”.

With good reason too. Benefit fraud costs the country £800 million a year, according to the Public Accounts Committee where as the wealthy are ripping us of to the tune of £13billion a year.

Depressingly though, recent JRF research found the public still view the poor with more cynicism than the rich, doubting their ability to make any worthwhile contribution to society. Although the public does agree that some people do well in life because of who they know not because they are especially talented. Whilst the poor are often denigrated, inequalities at the top end can be justified so long as they're are seen as fair, the Fabians’ found. High earners are more talented, work harder and studied longer, people think.

Or rather, thought.

People’s ability to make order of inequality has come crashing down with the credit crunch and they can no longer rationalise excessive wages as before. There’s now broad cross-party support for taxing the rich and, according to Evan Harris, the Lib Dems plan to seize on it.

Harris outlined plans to raise £20billion through taxing the wealthy and polluters in order to raise the tax threshold to £10,000. Those earning less than this would also be exempt from Council Tax.

“This is massively redistributive,” he explained, “but the losers, although there aren’t very many of them, will lose massively.” Can the Lib Dems really gain support for such progressive measures, policies that will address inequality but will also give money to an ‘undeserving’ poor?

One of the problems Harris argued, is that the government talks loosely about ‘ordinary’ families, ‘hard-working families’, those on ‘middle incomes’, which almost everyone identifies with. What is a middle income though?

Lib Dems claim their proposals will benefit 80% of society, leaving only the top 20% worse off. Think bankers, lawyers and hedge fund managers. But also think so called 'ordinary' households where, for example, a teacher lives with a policewoman. They also have a combined income that falls into the top 20%. Suddenly people are not so comfortable. Taking money from greedy fatcats, we like, taking money from our neighbours, we don’t.

There is a need for clarity. The public needs to be made more aware of existing inequalities and the impact of poverty on people's life chances. When research participants were given evidence of the long-term impact of inequalities, they were far more in favour of poverty-tackling policies.

The media could also do more to help. As Harris pointed out, papers happily tell the ‘man from bad background makes good’ story without ever mentioning that it was the welfare state that kept him alive on the way up.

Policy makers must to provide more information and hone in on people’s social conscience. Progressives should seize the opportunity for change.

Next Wednesday, Rhodri Morgan speaks at the Cardiff leg of the Fabian Roadshow. There are still a few places left.


Robert said...

The poor well we do not give enough to society, the poor we are told are people getting below 32,000. This means the lads who are dying for new labour in two wars are not giving sod all to society because a lad in his first term of deployment gets £14,000 a year which is anyone language poverty wages, so I think people better be careful when they talk about the poor doing piss all for society.

Anonymous said...

A teacher living with a police officer have a combined income putting them in the top 20% of earners?


That's definitely not right. Unless, of course, you're thinking of a Head Teacher and a Chief Superintendent. But that's not exactly typical.

It would help if you specified what grade of teacher/police you are thinking about, and provided figures for their incomes relative to average (mean and median) incomes.

EvanH said...

badconsicence -

Sorry but it is right!

Top 20% household gross earnings = £70,000 (boosted by the London high earners).

Average teacher pay = £35k
pay of new police sergeant or experienced PC (10+ years) = £35k.

Your example of Headteacher and Chief Supt would earn well over £100k which is well into the top 10%.

It's all there on Google if you look. You have a skewed idea of income distribution or a strange idea of what people earn in decent jobs.

Dr Evan Harris MP

Anonymous said...


I think I certainly have to concede your point.

I guess my comment - written in too much haste and not enough thought - is a good example of how "ordinary" people can be earning a lot more than is typically expected or assumed, and in turn how popular perceptions of income distributions can indeed by quite far off the mark.

Thanks for putting me right.

Tim Worstall said...

"With good reason too. Benefit fraud costs the country £800 million a year, according to the Public Accounts Committee where as the wealthy are ripping us of to the tune of £13billion a year."

Erm, that paper to which you link makes no mention at all of tax avoidance or tax evasion.

I have a feeling you probably meant to link to a Richard Murphy paper instead. Which of course means that the numbers are nonsense.