How nice of the Organisation for Economic Co-operation and Development (OECD) to remind us all, in its new research, that income inequality has a “statistically significant impact” on economic growth!
Perhaps its next report will be entitled “Egg-sucking for grannies”.
It seems that hardly a day goes by without someone telling us this simple fact of life. It isn’t that long since Inequality Briefing told us that a reduction of the gap between the richest and poorest in the UK – to the levels in Denmark or the Netherlands (both of which are roughly on the same level as this country economically) – would put an extra £2,500 in every household’s budget.
That, in turn, would give the economy a major uplift because it boosts spending power. More money would flow through the system and the fiscal multiplier would be higher – meaning the amount of value it creates as it works its way to the Treasury as tax payments would be greater. Then – in a properly-working economy – it would go back into the economy as government investment and the process would start again.
We don’t have a properly-working economy; we have a Tory economy.
That’s why the message has to be repeated constantly, in the same way a teacher might have to repeat a lesson to an uncomprehending child (in this case, George Osborne).
The OECD’s finding that redistribution of wealth via taxes and benefits does not hamper economic growth will fall on deaf ears while George Osborne is the resident of 11 Downing Street. He has been cutting taxes on the rich, and reducing benefits for the poor.
According to the OECD, the gap between rich and poor is at the highest level in 30 years among its 34 members. The richest 10 per cent earn, on average, 9.5 times the poorest whereas – in the 1980s – they earned 7 times as much. Osborne thinks this is a good thing, even though the economy is stuttering on the edge of another precipice.
His policies are designed to increase the income gap: Benefits have been capped to ensure they do not increase in line with inflation – meaning employers are free to pay their workers less, saying that there are plenty of unemployed people who would be happy to take the lower amount. Trade unions are toothless, having had all the fight taken out of them during the first neoliberal Tory government of the 1980s.
The result will be less money flowing through the economy, meaning lower tax income for the Treasury, making it harder to provide public services (as Osborne intends). This provides an excuse for public services to be cut in favour of inferior but more expensive privatised systems that put even more cash into the hands of the rich and starve the economy still further. Debt increases exponentially and the United Kingdom doesn’t just fall over the economic precipice – we leap into the chasm like a lemming in a Disney movie.
The fact is, George Osborne is a Tory. He’ll never accept that his ideas are wrong for the United Kingdom. Whether that means he has been lying to you about his plans, or he is just really, truly stupid, we may never know.
So the OECD’s message isn’t for him at all.
It’s for you – and anybody else who will listen.
The only way to improve our standard of living is to rid the country of Tory neoliberal economic idiocy, by voting them out at the next general election, and taking steps to ensure they can never return on the back of the discredited foolishness they’ve been peddling to us.
The only way that can happen is if we – individually and personally – take responsibility for educating the people around us to understand the faults in Tory ideology and the dangers they represent.
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