Abi Wilkinson: Labour is right to seek to spread the wealth

Written by Abi Wilkinson on 20 April 2017 in Opinion
Opinion

When it comes to economic policy, Labour isn’t too leftwing – but it does struggle to present an image of economic competence.

You wouldn’t realise it from our newspapers, but most people in the UK are economically quite leftwing. In recent months. Pundits have slated a whole series of policy announcements by Labour as loony lefty extremism – only to discover that the majority of voters think they’re an excellent idea.

Universal free school meals paid for by VAT on private school fees, an increase in the top rate of tax and a £10 minimum wage are all highly popular with voters. Though it was roundly mocked by the media class, most people also back plans to cap bosses’ wages at 20 times the figure their lowest paid employee earns.

Before Jeremy Corbyn, it was Ed Miliband who was attacked as unacceptably leftwing. Various right-leaning newspapers referred to him, contemptuously, as “Red Ed” – yet ordinary voters tended to approve of his redistributive policies. Almost two thirds agreed with the proposed Mansion Tax, for example. And even more were in favour of increasing funding for the NHS by £2.5 billion, partially through increased taxes on tobacco companies.

At this point, some readers might be tempted to argue that I’m extrapolating too much from the data provided. Asking people their opinion on individual policies doesn’t provide a genuine picture of their views. If you want to understand how people really feel about Labour’s policies, look how the party is faring in the polls. Voters might have said they agreed with Miliband’s Mansion Tax, but they still plumped for the Tories when it came to the crunch.

It’s true that, in recent years, popular redistributive policies haven’t translated into electoral success for Labour – but that doesn’t mean the public isn’t genuinely leftwing. A few years ago, polling company YouGov asked a question that gets to the heart of the left/right economic divide. It turns out that the majority of UK voters would prefer to see a more equal distribution of wealth even if the total amount of wealth is decreased. Only 17% agree with the orthodox rightwing view that greater inequality is justified if it leads to greater prosperity over all. With living standards stagnating as a wealthy minority grow ever richer, the claim that “a rising tide lifts all boats” is perhaps less convincing than it once was.

While discussing possible tax increases to fund cash-strapped public services, shadow chancellor John McDonnell suggested any additional burden should fall on “the rich” – which he defined as people earning “above 70,000 to 80,000 a year”. As usual, this has provoked a horrified reaction from many commentators, with some suggesting it would alienate voters in London where the cost of living is higher.

Though it’s too soon to know for sure, I suspect public opinion might be somewhat more positive. Earning £70,000 puts you in the top 5% of earners, and even within London it puts you in the top 10%. What’s more, voters are so aware of the struggles facing the NHS that most support a 1% rise in national insurance – a tax that the majority of workers pay.

When it comes to economic policy, Labour isn’t too leftwing – but it does struggle to present an image of economic competence. In some sense, these issues aren’t unrelated. Because the financial crash happened under a Labour government, the false narrative that it was caused by “overspending” was also able to take hold. What’s more, the more redistributive your policies, the more harshly you’re likely to be attacked by sections of the media representing the interests of wealthy elites.

Already, though, public opinion has turned against government austerity. Most people believe that spending cuts are unfair and only a minority believe that further cuts are necessary or economically beneficial. And if the consequences of Brexit are as catastrophic as many economists predict, Tory claims of superior economic competence are going to seem increasingly absurd.

Labour currently faces a number of significant difficulties, but those who claim it must veer economically rightwards to attract voters are woefully out of touch. Founded to represent the material interests of the majority at a time when politics was entirely dominated by a wealthy minority, it’s still the party best placed to deliver the future most voters desire. The struggle is convincing them of that fact.

 

 

Photo credit: Isbael Infantes/EMPICS Entertainment.

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