Dave Cameron’s stolen Ed Miliband’s clothes, but nobody’s noticed

Cameron did not sound like someone who particularly cared that poverty had been reduced

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When Ed Miliband rises to the despatch box on the other side of the House of Commons, after four successful years as prime minister, in his dreams, he would want to say something like this: “If the Opposition look at the figures, they will see that inequality is at its lowest level since 1986: one million fewer people are in relative poverty and half a million fewer children are in child poverty than when Opposition members were in the Cabinet.”

How peculiar, therefore, that when David Cameron said those words on Wednesday, almost no one noticed. Politics carried on as before. By which I mean Ed Balls heckled, “Worse off. They’re worse off. Worse off.”

Ed Miliband looked pleased with himself because an energy company had offered to freeze its prices, which he took as an endorsement of his policy rather than an attempt to defend market share. Politics carried on.  Miliband and Balls did not rush back to their offices to hold a crisis meeting of the inner circle. Miliband did not claw at his eyes and cry: “Cameron’s made progress towards what I say should be the central purpose of a Labour government; what are we going to do now?”

Miliband’s advisers did not put their heads in their hands and say: “But we have just told some of the more intellectual commentators that you are going to make the war on inequality the centrepiece of your election campaign. What can we tell them now?”

Miliband himself said in the Hugo Young lecture last month: “Tackling inequality is the new centre ground of politics.” He and Stewart Wood, his shadow minister for ideas, like talking about Thomas Piketty’s new book, Capital in the Twenty-First Century, which says rising inequality is inevitable under capitalism.

Well, it may have risen in America, but it is not true of the world as a whole, and it is not true of Britain. There is a remarkable disjunction between what people think is happening and what is actually happening in this country. Labour supporters tend to be convinced that the rich are getting richer while the poor are ground down, forced to go to food banks and forced into debt by the bedroom tax.

Plainly some people are having a rough time. Life on benefits has always been hard. The question is, though, whether things are getting better or worse. And the surprising answer is that, for the poor generally, they are getting better. More people are in work, which is the important thing. 

We also know that, overall, the rich have borne the greatest share of the burden of starting to balance the Government’s books. Only just, according to Treasury figures published with the Budget this month, but the rich have lost a higher percentage of their income than the poor over this Parliament. Of course, the 4 per cent cut in income for the richest fifth of the population does not hurt as much as the 3.4 per cent cut suffered by the poorest fifth. But it does help to close the gap between rich and poor, at a time when the pre-tax income of the poor is already doing better than that of the rich.

That is why the Prime Minister is right to say that incomes are more equal than at any time since the great rise in inequality under Margaret Thatcher in the 1980s. Labour could point out that more public spending cuts are to come and that the incomes of the better off will bounce back from the recession. But the Institute for Fiscal Studies estimates that, though inequality may rise in the next few years, it will still be lower than it was before the financial crash.

Again, therefore, we are brought back to the enormity of the mistake made by Cameron and George Osborne in the Budget two years ago, when they cut the top rate of income tax to 45p. This probably had little effect on revenue, but the symbolism was disastrous for the coalition. It was a “tax cut for millionaires” and it means that no one will believe that, overall, the gap between rich and poor is closing.

In a way, Cameron continues to compound that mistake. Last week he read out his “killer facts about equality” at Prime Minister’s Questions as if they had been prepared for him by a researcher. He did not sound like someone who particularly cared that poverty had been reduced; he sounded like someone trying to score a point. That is what allows Miliband and Balls to pretend that they didn’t hear the facts: they don’t fit what most people “know”, so if Cameron and Osborne sound as if they are just sloganising, Labour can ignore them.

Thus we head towards an election in which a left-wing party that cares passionately about equality will assail a centre-right government for pampering the rich and being cruel towards the poor, when it has actually promoted greater equality but barely seems to realise it.

twitter.com/@JohnRentoul

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