Labour In Power (3) – Equality.

Perhaps famously relaxed about the growth of wealth, Labour in power was at the same time successful in attacking poverty, although its detractors, and even some of its supporters, may not appreciate to what degree.

Edit: see also http://blogs.independent.co.uk/2013/10/21/wealth-more-equal-in-uk-than-in-france-or-germany/

As for equality, the background elsewhere in Europe and the world is important, not least the growth of footloose individual wealth, in the form of billionaires from other parts of the world.

In the UK, these have an effect on equality defined by the American economist Paul Krugman as ‘Bill Gates walks into a bar…’ When that happens, the total income of the bar increases, as does the average income, but so does inequality, without the circumstances of the rest of the people necessarily being affected.

The relevance of this analogy is that the UK has gained many international ultra-rich residents since the 1990s, for example, Russian oligarchs and middle-eastern potentates, attracted by relative safety and security  for both their fortunes and their persons. The effect of this upper income stratum of ultra-rich has been to distort statistics, which show that outside this group, Labour did indeed have real achievements to boast about.

In contrast, Labour’s achievement was to prevent the growth of  inequality of the UK against wider global trends.  In fact, according to John Rentoul of the Independent:

 

inequality increased sharply … between about 1984 and 1990. [The Thatcherite years] For the past 20 years, therefore, the trend has been roughly flat, while real GDP per head has increased by around 40 per cent (even after the correction of the past three years). [1]

 

In other words, inequality did not increase, and at the same time real incomes increased steadily and evenly in the Blair/Brown years. If Bill Gates walks out of the bar to buy some gum, or abolish polio,  no-one is less equal, and everyone is better off.

So how did the Labour governments achieve this? Here are some of the specific measures introduced by Blair and Brown:

  • Labour introduced the National Minimum Wage and increased it faster than inflation each year.

 

  • Labour enjoyed exceptional success at lifting children out of poverty: “reducing child poverty by 900,000 children was a remarkable achievement, certainly without historical precedent in the UK, and impressive compared with other countries.”[2]

 

  • Labour introduced tax credits for families with children plus help with childcare costs.

 

  • Labour introduced minimum income guarantee for pensioners and the winter fuel allowance was increased from a mere £10 under the Tories to £250.

 

  • Labour provided protection against unfair dismissal after 12 months in a job instead of after two years, and increased the compensation from £12,000 to £63,000 to deter employers from sacking un-necessarily.

 

  • Labour gave part-timers equal rights for the first time (equal pay, pro-rata pensions for the first time, pro-rata sick pay etc). They gave everyone the right to a 20 minute break if they worked more than six hours a day.

 

  • Labour increased paid maternity leave from 14 weeks to 39 weeks, and introduced paid adoption leave and paid paternity leave. They introduced emergency time off for parents and carers.

 

  • Labour built 149 new hospitals and by 2009 waiting times were down to just 2 weeks – the lowest since the 1970’s, meaning that people could get back to work more quickly following serious illness.

 

  • Labour upgraded more than 1 million council houses, saving billions on fuel bills.

 

In short, Labour’s ‘relaxed’ attitude to inequality was in fact a strategy of attacking poverty rather than wealth. And by any reasonable analysis, all of this shows that like all governments they were more successful in some of their endeavours than others; but to dismiss their successes would be blinkered, or indeed willfully blind.

 

 

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