Tuesday 30 March 2010

Two cheers for George Osborne

Cheer One: It is always good to see George Osborne on television. Next Left has been rather distressed at the Tory Osborne invisibility plan to keep him out of sight during the campaign.

But let's leave partisanship aside for a moment. One thing which George Osborne said during tonight's Ask the Chancellors debate raises a genuine cheer here at Next Left for something that has changed in the last ten years in British politics.

Asked, should government seek to narrow the gap between rich and poor, all three candidates for Chancellor agreed that it should. In the run-up to the 2005 election, the Fabians were trying to make sure inequality got a mention, and arguing that all parties should say 'yes' when asked the "David Beckham question" about whether the gap mattered.

Here is what Osborne said tonight for the Conservatives:

"At the risk of agreeing with both of my colleagues here, I agree that a fairer society is the objective of a government.

When you have the gap between rich and poor widening, that creates a less fair society and a less strong society, and we don't feel so much part of that society

So I think it is the job of government.

But I don't think the current policies that have been pursued over the last 13 years are working.

Because the gap between the rich and poor has grown.

And child poverty is now rising.

And, indeed, crucially, social mobility - the ability to get on in life, regardless of where you are born - has declined.

So the current policies are not delivering on something that we all agree should be an objective of government.

That answer was far from perfect. Yet Osborne's pledge that inequality matters is important - because he agrees that an important 'fairness' test of any government is whether it narrows the gap. Were he ever to become Chancellor, the Fabian Society will be among those offer advocacy and scrutiny on whether he is achieving that.

But we will have to stick at two cheers, for a couple of reasons.

Firstly, we should certainly withhold the third cheer until he has a policy agenda likely to narrow the gap rather than widen it. Darling challenged Osborne over narrowing tax credits. Vince Cable scored a very direct hit with how this concern to narrow the gap was directly contradicted by his inheritance tax cut.

Secondly, Osborne's account of where we are now and why is worryingly weak, in a way which would augur ill for his policy agenda, as we shall see.

The Osborne reading list on inequality

To succeed in his egalitarian ambitions, I feel that George Osborne would need a firmer grasp on current trends and policy debates about inequality. Here are five things for the reading list of the Shadow Chancellor, his advisers and any other ProgCons who might want the commitment to narrowing the gap to be credible, rather than cosmetic.

1. Britain's war on poverty

The authoriative and detailed study from Jane Waldfogel of Columbia University, published last week, offers an important challenge to Osborne's view that current policy hasn't worked.

Yes, the government has fallen short of its ambitious targets. At the same time, Britain made more progress on reducing child poverty than any other western democracy in this period. Waldfogel says there are many detailed lessons from the British experience, but the most important is that "policy works".

Waldfogel also explains why the British strategy has become an important model which US anti-poverty campaigners believe the Obama administration should emulate:

When Britain declared its war on child poverty in 1999, 3.4 million children - one in four - lived in poverty. Within five years, the chlld poverty rate (measured in relative terms, as is customary in Britain) fell from 26 per cent of all children to 22 per cent as half a million children moved out of poverty. This was no mean achievement given that a relative poverty line moves up as average incomes rise (as they did quite rapidly in Britain during this period).

On an absolute poverty line, like the one used in the United States, British progress was even greater. Child poverty measured with an absolute line fell by nearly half in the first five years of the British antipoverty effort, from 26 per cent to 14 per cent, as the number of children in poverty fell by 1.6 million.

2. The Institute of Fiscal Studies report, published last week, showing how Labour's policies have been highly redistributive. This contrasts with the regressive impact of Conservative policies from 1979 to 1997 which redistributed upwards.

Tory leader David Cameron has said he wants to reduce inequality (which is good), yet that "I am basically a Lawsonian" on flatter taxes (which would do the opposite). These goals might not be consistent, for the reasons Stuart White set out in his overview of the government record.

3. John Hill's national equality panel report.

This shows just how wide wealth inequalities are - and ought to give Osborne pause for thought about his inheritance tax cut. It also offers a concise guide to how inequality has narrowed across 90% of the income range. This could help the Tories to escape the rather strange contradiction - where they are complaining that inequality has increased, while arguing that inequality between the top and the middle doesn't matter. If they want to stick to that position, then they should acknowledge that the inequality they think matters has decreased.

4. I think they're wrong about the gap between the middle and top not mattering, which is why they should read The Spirit Level by Richard Wilkinson and Kate Pickett. Conservatives now increasingly quote this - as David Cameron did in his Hugo Young lecture - but some are sceptical as to whether many have read it.

Given his excellent insight that, with too much inequality, "we don't feel so much part of that society", I hope Osborne might find the Fabian's Solidarity Society useful, particularly its evidence on the importance of universalism in creasing that "we're all in this together" spirit he wants.

5. Osborne sought to imply that social mobility has declined under Labour. This is a common mistake. But the antidote is Next Left's social mobility fact check, which contains all of the key academic references from all sides of the debate, and which quoted the authoritative LSE studies on recent changes in social mobility:

We cannot find any evidence that the sharp drop in mobility observed for children growing up in the 1970s and 1980s has continued. But nor can we find evidence that mobility has improved.

1 comment:

Robert said...

The sad fact Darling came across as being an empty shell as bad as Darling cuts or not to cut, Darling well no cuts but some cuts later, oh for god sake if another person tells me they know savings in the NHS worth £20 billion, I'd want to know why you allowed it to go on for so long, my hospital is making some savings next month two wards are closing with large scale redundancies, except for the managers who will be redeployed, because the contracts would give them large hand outs while nuirses just get four weeks pay.