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Oct
2014
Thursday 30th
posted by Morning Star in Editorial


OPINION polls are notorious for their capacity to be interpreted in different ways, so the survey conducted on behalf of the Centre for Labour and Social Studies (Class) needs careful study.

Its headline conclusions that the gap between rich and poor is bad for society and that introducing a mansion tax, raising the top rate of income tax, closing tax loopholes and ending private education’s charitable status would help combat inequality are incontrovertible.

Redistribution of national wealth from poor to rich in Britain has been inexorable for decades.

Introducing the national minimum wage was a positive development that lifted millions out of dire poverty.

But refusal to raise its modest level to that of a living wage has weakened its impact, while political concern not to upset the applecart by tackling income disparities and the accumulated wealth of the super-rich has exacerbated the situation.

Class points out that 65 per cent of respondents favour a maximum pay ratio of 65:1 in any company, which last existed around the turn of the millennium.

Average pay for a FTSE100 chief executive is now about 160 times as high as that of the average worker. This is neither accidental nor abnormal for advanced capitalist countries.

An Associated Press and Equilar survey in the US showed average pay rises for Standard & Poor’s 500 stock index chief executives of 9 per cent to $10.46m a year, while US workers’ salaries rose by just 1.3 per cent.

The gap between their relative incomes has leapt to 257:1 from 181:1 just five years ago.

Governments often feel the need to appear dismayed by huge income disparities, especially in the wake of events such as the financial markets meltdown of 2008.

But the countermeasures, such as greater shareholder scrutiny of remuneration boards, have in the main proven useless.

Boards have a tendency to replicate or even leapfrog other companies’ provisions rather than squeeze rewards and take the probably overrated risk that executives would go elsewhere or create the impression of an internal financial crisis.

They plump for the quiet alternative of throwing super salaries, share options and pension pots the size of a developing country’s GDP at their executives.

Only external action — from central government — can tackle the issue of excessive wealth.

This is where Labour supporters would expect the Class survey to come to their aid, but the question as to which political party would be most likely to create a fairer country shows 19 per cent for Labour, 15 per cent for Tories and 13 per cent for Ukip.

Nearly a fifth, 19 per cent, of respondents plump for “none of them” and 14 per cent don’t know.

So while 65 per cent want positive action to cap inequality in Britain, just 19 per cent have confidence in Labour to lead the way in doing so.

This is not solely due to Prince of Darkness Peter Mandelson’s oft-quoted reference to new Labour being “intensely relaxed about people getting filthy rich,” but the widespread awareness that Labour in office did nothing to close the gap between rich and poor.

The days of pointing to inequality and expecting people to view Labour as the solution are over.

For that situation to alter, the party’s priorities must change too, revealing the courage to raise taxation on big business and the rich, increase public ownership and act positively to reverse the wealth gap.




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