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Labour’s shame

"I am the TaxPayers' Alliance!"

Last Friday's Guardian, like every other paper, led on the scandal of MPs' expenses. But the really shocking story sat next to it: "Gap between rich and poor widest since 60s." As Larry Elliott reported, it's not just relative poverty that's increased: "According to the figures, the real incomes of the poor are lower than they were in 2005, with a cleaner, a security guard or a care assistant stuck in the bottom 10% of earners getting by on £9 a week less than they were three years earlier."

Labour made some amends with its equalities bill and the introduction of the 50% top tax rate, but, as Polly Toynbee lamented, it was too little and too late. This didn't prevent an outpouring of grief by hard-done-by chief executives, most of whom wrote the same letter of complaint to the Daily Telegraph or Financial Times (with one honourable exception).

The howls of outrage on behalf of the richest 1% were far louder than anything heard on behalf of the sinking 10%, though there were some excellent rebuttals – from Seumas Milne in the Guardian, Simon Caulkin in the Observer, and a flotilla of bloggers: Richard Murphy, Graham Turner, Vino, Paul Sagar, Tom Miller, Hopi Sen and Adam Lent.

As Adam points out, Stephen Byers was among those who joined the top earners' crusade. So let's leave the last word to Peter Wilby, who, in two brilliant paragraphs for the New Statesman, sums up the contribution of both Thatcherites and Blairites to this crisis:

"The Institute for Fiscal Studies said the other day that [Gordon Brown] ran an unsustainable boom, with output 3 or 4% above the economy’s long-term capacity. So he should have run 'a much stronger fiscal position'. This is an academic version of David Cameron’s tiresome mantra that he should have fixed the roof while the sun was shining. But let’s get the metaphor straight. The people who failed to fix the roof were the Tories, who neglected schools, hospitals and other public services while North Sea oil flowed plentifully. Brown, therefore, had to rescue the NHS, education and so on with what his opponents call a spending 'splurge'. The error lay not in the spending, but in the failure to raise taxes sufficiently to pay for it, perhaps by introducing a 50p tax on the highest incomes.

"The people who stopped him were the same Blairites who now line up with the Tories to criticise Alistair Darling’s belated move to make the rich pay more."

Posted by Other TPA at 09:47am on 12 May 2009
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That is a good quote from Wilby but it does rather exonerate Brown. I’m not sure that the Blairites exactly twisted his arm to stop him raising taxes for the rich.

Posted by Su Su at 11:56am on 12 May 2009

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