Leading Article: A little redistribution does you good

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The Independent Online
Here is a question for New Labour. Does its leader accept it is a responsibility of government to reduce inequality? We only ask because Gordon Brown seemed reluctant to be drawn on this issue last week. It is, of course, a trick question. It was asked by Tony Blair of John Major two years ago in the House of Commons. Now, two years may be a long time in the politics of today's Labour Party, but given that Mr Major's answer was "Yes" even Mr Blair is hardly going to answer "No".

Mr Major's one-word reply was one of the more genuinely shocking moments of the last and unlamented parliament. It was certainly not what Margaret Thatcher would have said, but it is also difficult to reconcile with the softer-edged philosophy of the Conservative government since 1990.

Similarly, many Independent readers will treat the Prime Minister's concern for the have-nots in today's newspaper with a curling eyebrow. Yet there is a credible argument Mr Major could deploy. Greater inequality, he could say, was a price we had to pay for halting our relative economic decline. It is a price we probably have to continue to pay if we want to remain competitive in world markets; but so long as we can sustain growth then we can ensure that the less fortunate do not lose out in absolute terms.

That was Baroness Thatcher's argument, and it remains the logical case of the Conservatives still. It was an argument which explicitly turned its back on the idea that the state had a responsibility to promote equality. In today's article, Mr Major seeks both to proclaim himself a One Nation Tory and to condemn the self-defeating "paternalism" of the Macmillan era in which he grew up. The only way to square this particular circle is to avoid the issue of equality altogether - to ditch wealth comparisons as a blind alley. He can only speak of One Nation by turning a blind eye to the huge growth in the numbers of the relatively poor over the past 18 years.

When it comes to equality, the record of the Conservatives is stark. The gap between rich and poor has grown sharply. The poor may not be significantly worse off in real terms than in 1979, but there are three times as many families dependent on state benefits than there were - and incomes for those in the middle and at the top end of the distribution have risen substantially. And for those at the very top, the increases have been so steep as to induce a sense of moral vertigo.

The most dramatic growth in inequality happened in the 1980s, mostly as a result of the opening of the British economy to world markets and the collapse in demand for unskilled labour. But the Tory government's tax policies had an important effect in widening the gap still further, and the general direction of tax policy has not changed since Mr Major became Prime Minister. Nor has a One Nation instinct been apparent in other policies. The Tory enthusiasm for cutting inheritance tax is hardly congruent with it. Nor is an education policy which, by putting parental choice at its heart, inevitably accelerates the polarisation of schools into good ones for the better-off and sink schools for the poor. There are logical economic reasons behind these and many other policies. Tory impatience with "equality" as a political idea has a long and intellectually coherent pedigree.

Fair enough. But one reason the country may be prepared to contemplate change at this election is that there is a widespread desire to see some of the divisions in our nation healed. It may be conscience. It may be middle-class self-preservation, confronted by the spectre of rising crime. But it seems to exist.

"Equality" is not a big New Labour word either. But simply by asking that question of Mr Major two years ago, Mr Blair has accepted that a Labour government would be under an obligation to reduce the gap between rich and poor. This is not, as Mr Blair has accepted, simply a matter of that slippery concept, equality of opportunity. "For the notion of community to have any meaning, then there must be a certain degree of equality of outcome," he said in 1993.

That is the kind of phrase calculated to summon up unwelcome ghosts of the long-distant time, "BT", or Before Thatcher. And Mr Blair and his Shadow Chancellor become strangely inarticulate when pressed for further particulars. It was up to David Blunkett, a less squeamish politician, to explain New Labour's credo in an important speech earlier this year. "There was a time, of course, when socialists believed that by redistribution of income through progressive taxation, it would be possible to provide equal treatment for everyone," he said. Cash transfers are no longer an option, he added brutally. "The only way of enabling people to rise out of poverty and disadvantage is by enabling them to earn their own living."

Mr Blair was goaded into declaring this week that of course he was passionate about social justice - for him, widening educational opportunity is social justice, not handouts to the poor.

He is right, but there is a problem with this view, which has not so far been examined in this election campaign. Of course, if a Labour government can "cut the bills of failure" by shifting large numbers of people off welfare and into work, then many of the poor will be better off and the gap between the rich and (many of) the poor will have narrowed. But that is a big "if", and this newspaper has yet to be convinced that Mr Brown's plan for 250,000 young and long-term unemployed, paid for by the windfall levy on privatised companies, is of the kind of scale that will match up to the challenge.

Let us hope that, if Mr Brown gets to present a July budget, he will be bold. It may be that the tax system is neither the most important cause of greater inequality, nor the most effective means of closing the gap, but there is a strong case for an immediate move to take away tax reliefs from the better-off. A little old-fashioned redistribution would do the country good and the economy no harm. Yesterday's words from both leaders were cheering. But actions would be better.