Friday, 9 October 2009

The lost decade

Sometimes I wonder why I blog when I enjoy more reading other people's bright and illuminating writing. Perhaps I should just post links to articles and blogs, like a policeman managing traffic at a busy intersection.

Over the last few months, Iain Macwhirter has written brilliant stuff for the Sunday Herald, particularly about the underlying causes of the financial crisis and the inability of the political class to confront the powerful financial services lobby, in particular the banks. He even seems to have stopped his partisan attacks against the SNP. Who knows, maybe one day Iain and other Herald journalists will see sense in Scotland becoming a normal state within the EU as opposed to remaining as an appendix of England…

This article about the imminent demise of the Labour party in the UK is poignant, coming from someone that used to be a party member while at University.

Sunday Herald

A few days ago, my father-in-law made the mistake of mentioning politics during our weekend visit for tea and biscuits. I went onto a rant about the lost decade and why Labour only has itself to blame for their forthcoming electoral disaster. I don’t think he will make such a blunder again and will stick to football and the weather from now on.

For the vast majority of working class Scots like my in-laws, a Tory government is synonymous with public service cuts, mass unemployment and the hated Poll Tax (in Scotland first). The Conservatives is “their” party. The party of the rich and wealthy. The party that will screw the working class living in (former) council houses. Labour is still, believe or not, the people’s party for the vast majority of working class Scots.

However, after 12 years of Labour rule –or was it New Labour- we can now assess what has been achieved. And, sadly for traditional Labour supporters, we know that things have not got much better.

If anything, things have got worse, and the current crisis will only exacerbate it.

Income inequality is now wider than 1997. People in higher incomes have done very well of Labour’s spell in power.

ONS [pdf, 800Kb]

IFS [ppt]

The working class have remained working for stagnant wages that prevented them from buying assets. These assets became more expensive as middle and higher earners accumulated financial assets and property, keeping them out of reach of lower income households.

Wealth distribution is now more unequal than it was in 1997.

Higher earners have accumulated a higher ownership of assets than ever before, namely property and financial assets thanks to the very generous tax breaks offered to them. Lower and lower-middle earners have not been able to buy assets, as prices keep escalating out of their reach. Thus the poor have stayed poor whilst the rich have become even more richer. The gap is now wider than it was in 1997. (Gini coefficient, ONS, wiki)



Social mobility is now more restricted than it was in 1997.

Access to tertiary education is now more expensive and difficult for families in lower incomes after the increase in tuition fees and the abolition of grants. Oxbridge and first tier Universities remain the preserve of privately educated, middle-class or wealthy families and any changes in access remain statistically non-significant.

Access to good state schools is now dependant on ability to buy property within schools catchment’s area, which is out of reach to any families in average incomes.

So Labour, the party that looks after everybody, the party that is on the side of the have-nots, and in favour of wealth redistribution has been a catastrophe for the very people it ought to have looked after.

It has been very good however to those in higher incomes who have been able to accumulate property (tax relief of interest), financial assets (tax gross up and relief on pension contributions at marginal rate, etc.)

And this is without mentioning the lies over the Iraq war, semi-privatisation of NHS, Post Office closures, etc, etc.

I am not advocating a vote for the Conservatives but anyone on average incomes who believes that Labour is going to be good for them needs to have a reality check. Sorry.

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