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June 10, 2008


Matt Cain

Don't the figures actually demonstrate that what we need for greater inequality is an economic downturn?


It's a very big IF, and I don't think the if is relevent. We DO need a break from NL policies or the country will be broke for the foreseeable future. Tax, borrow, spend - borrow more, tax more, spend more. That's Gordons vision, his only 'policy', and you can only keep that up so long.

Labour and Gordon Brown have failed to achieve (a) what they set out to do and (b) anything good.


Matt I think you will find that equality has been growing all the way through the 'labour years' - nothing to do with the current downturn...

Anyway - this downturn is the result of 10 years of borrowing, borrowing more, taxing, taxing more, spending, splurging, without any sensible controls.

Get rid of Labour and give it a few years and the economy /may/ recover... Having said that the damage that Gordon can do to the UK in the next two years is pretty much unthinkable - if he carries on as he has done for 10 years, taxing and borrowing more, then I think this country is fucked for the rest of my lifetime and more...

john b

No Zorro, you're talking total nonsense (and Matt is right).

What the figures show is that we've enjoyed massive economic growth over the last 10 years with the rewards accruing most strongly to those with skills in strong global demand; and that the rise in taxation and government spending has not been sufficient to offset the impact of that growth.

If there's a recession and lots of people in FS and IT and professional services lose their jobs, income inequality will narrow.

Oh, and this downturn is the result of a rise in global commodity prices combined with a global crash in credit availability. Blaming either of those on Brown and Darling's moderate tax rises and moderate borrowing (national debt still well below 1997 levels) is gibbering economic illiteracy.


John B

Moderate tax rises , when we supposedly had a storming economy? Government borrowing, when tax receipts where booming? Why did he need to do either?

And if Gordon wants to blame the global economic environment for our woes, then he shouldn't take the credit for the good times and their equally global based causes.

Matt Munro

Given that overall incomes have risen in 10 years and that poverty is absurdly defined as living on less than 60% of median income in one of the richest countries in the world, and that we have universal health care, education and housing, why does it matter than "inequality" is getting worse ?

Alex Sabine

The comparison with 1997 is not favourable to Brown. After the huge deficits of the recession years, public borrowiong was falling rapidly during Ken Clarke's Chancellorship, and it was not particularly high by international standards by '97.

Brown's so-called 'moderate' borrowing has left the UK with a big structural budget deficit (it was 3% of GDP at the top of the cycle) and one of the largest deficits in the developed world.

Most other countries have used the benign conditions over the past decade to reduce deficits or even run surpluses - it's quite clear that it was Brown's decision to increase government spending much faster than GDP growth (outpacing even the rising tax revenues) that has resulted in the deterioration in the UK's public finances.



Why does inequality matter? Well for starters there is ample evidence to suggest that inequality makes us unhappy - see Affluenza by Oliver James. From an utilitarian point of view it is an suboptimal distribution of resources due to the diminishing marginal utility of wealth. There is evidence to suggest social cohesion decreases and crime rates increase as inequality increases. There is a proven correlation between wealth and life expectancy so inequality of wealth is also reflected here.

It is not surprising that Denmark which according to the UN Gini Index has the lowest inequality in the world also has one of the lowest rates of mental illness.

Although it is undeniable that decreasing absolute poverty should always be the priority this does not mean that relative poverty and inequality does not have a significant negative affect upon our society.



"It is not surprising that Denmark which according to the UN Gini Index has the lowest inequality in the world also has one of the lowest rates of mental illness."

I wonder is that inequality directly causing mental illness or high amounts of welfare spending helping to reduce inequality and mental health problems?

Trooper Thompson

Any reduction in the statistical measurement of inequality is likely to be caused by the middle class being forced downward and thus swelling the ranks of the lower class, NOT by any arrest in the process of consolidation of wealth in the hands of the very few.


In a despairing attempt to inject factual content into discussion of public finances, let's have a look at the figures for public sector net debt as a % of GDP, which reached its all-time maximum at 43% in.....1997. It is now 36%. (http://www.statistics.gov.uk/cci/nugget.asp?id=206)

Further, any reference to Tory financial policy at the time must be qualified by reference to the fact Kenneth Clarke, and some other senior Tories, later expressed surprise that Labour maintained it on the grounds that they had had no intention of doing so.


http://www.hm-treasury.gov.uk./media/4/7/maastricht_311007.pdf for a different set of debt numbers. In any case - what about PFI, unfunded public sector pensions etc.

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