The latest figures on the distribution of income and the extent of relative poverty in the UK, covering 2008-09, will be published next Thursday. The Institute for Fiscal Studies will be commenting on the figures, and recent trends in poverty and inequality in the United Kingdom, immediately after their release and will then be releasing a fuller report the next day, 21 May, on:
- how average incomes and the gap between rich and poor in the UK changed during the first full financial year of the recession;
- whether the rise in child poverty between 2004-05 and 2007-08 continued for a fourth year, or whether the increased generosity of benefits and tax credits for families with children led child poverty to fall;
- whether pensioner poverty has fallen during the current recession, just as it did in past recessions.
Dragging the entire population into the tax credit maw while levying high tax rates on the relatively less well off was a central plank of New Labour's socioeconomic policies. These figures and the IFS take on them will be a judgment on Labour.
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Human nature is such that it does not matter how much you distribute wealth 80% will always end up in the pockets of 20% of the population. So socialist dogma of wealth redistribution accelerates the divide between the poor and the rich. There are brief interludes when it appears not to be the case because the mass movement of money to the poor is faster than it's movement to the rich.
Like all socialist policies admirable as the aims behind them are there execution are self defeating.
We know that the Gini coefficient has risen markedly under Labour, A. It will be important to have a measure of the efficacy of the particular form of redistribution chosen and pursued so determinedly since 1997.
Redistribution is acceptable but not in the form of buying a client state and controlling the lives of others by government. I would argue that socially raised monies should be socially consumed not directed into private consumption which is indistinguishable from voter bribery and leaves social infrastructures and wealth creation deprived of funds in the interests of party political and temporary advantage.
It's pretty clear if you look at the recent IFS study on the impact of tax and benefit policies that the they were redistributive under Labour Governments since 1997. If there has been an increase in inequality it has been because of a greater trend in the other direction at a gross income level before tax and benefits.
Somehow I doubt that Conservatives would want the State to interfere in what distribution at a gross income level (and most Keynesian social democrats for that matter) which I am afraid is the rather bizarre logic if they want to reduce inequlaity and rule out redistribution by tax and benefits.
Surely the state should not raise, spend or redistribute money for social reasons it only should encourage and facilitate wealthier sections of society to do that. Where the state has high cost obligations such as defense then the wealthy should carry most if not all of the monetary burden. This should be the rule but all rules have exceptions and these exceptions have to be catered for by government but not to the extent that exceptions become the rule and the rule becomes the exception.
Just allow the rich to get richer and the powerful yet more powerful, and everything will be all right.
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