Miliband’s Bad History
Ed Miliband has an article in The Guardian this morning, which sets out the themes on which he will elaborate in a speech to Progress shortly. It sets out, in stream-of-cliché form, the leader’s strategy. It is to “chart the future” by being “the optimists, the party with a positive, patriotic mission for our country”.
All one can say is that his minders are doing the best they can with the material available.
The article is, unfortunately, based on one important mistake and one minor one. Miliband says:
People see a growing inequality between those at the top and themselves.
Well, they may do. But they would be wrong. New figures produced by the Office for National Statistics this week (pdf, graph above) suggest that overall inequality has been unchanged since 1990 (the higher the Gini coefficient, the more unequal the distribution of incomes).* Miliband goes on to say:
This new inequality may be getting worse under the current government, but it began long before.
It “may” be getting worse now, but we do not know. It did begin long before, though, as the graph shows. It did not begin under New Labour. It happened in the 1980s.
This is not just a historical point, because Labour’s record matters – especially if Miliband wants to repudiate it. A different set of figures published last week by the Institute for Fiscal Studies suggests that inequality rose slightly under New Labour. But the vital point is that, on the IFS’s calculations, the gap between rich and poor would have widened twice as much had it not been for Labour’s tax and benefit changes:
This increase in inequality since 1996/97 came about in spite of reforms to the tax and benefit system which mitigated underlying increases in inequality. Recall that inequality measured by the Gini rose from 0.33 to 0.36. Had there been no tax and benefit changes we estimate it would have risen to over 0.39 (if the 1997 tax and benefit system had simply been uprated in line with prices). Under Labour, spending on benefits and tax credits rose from 12% to 14% of national income. This extra spending slowed the growth in inequality – and was the main reason for the cuts in child poverty.
I do not see how accepting that inequality rose under Labour, when the evidence is mixed, makes political sense. What matters is how much more unequal Britain would now be if it hadn’t been for Labour policy.
The Miliband article ends by celebrating Labour’s “great victories – in 1945, 1964, 1997″. Harold Wilson’s majority in 1964 was four. His “great victory” came two years later, when he increased Labour’s majority to 96.
Update: In the speech itself today, Miliband does recover some ground, saying: “In power after 1997 we did something that few countries managed to do – stem the rising tide of inequality.” That should have been the starting point.
*The income of the top 0.1 per cent has increased in relation to the median, but the Gini coefficient measures the degree of inequality over the whole distribution.Tagged in: ed miliband, equality
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