The Organisation for Economic Cooperation and Development (OECD), the West’s most respected economic think-tank, has rejected the whole concept of “trickle-down” economics being pursued by David Cameron and George Osbourne and cites evidence showing that “income inequality has a sizeable and statistically negative impact on growth”.
Based on its latest research, the organisation states that the UK economy would have been more than 20% bigger if the gap between rich and poor had not widened so much since the 1980s (across OECD countries, the richest 10% now earn 9.5 times the income of the poorest 10%, up from 7 times as much in the previous period).
Far from cutting taxes for the top 10%, the OECD proposes a rejigging of tax systems to ensure wealthy individuals pay their fair share. The proposals include increasing top rates of income tax, scrapping tax breaks and reassessing the role of all forms of taxes on property and wealth. The think-tank also recommends putting in place redistributive policies to achieve greater equality in disposable income and thus improve life for the bottom 40%.
This is reminiscent of Ed Miliband’s recent speech at the University of London where he described the current state of the country as “deeply unequal, deeply unfair, deeply unjust”, and pledged to change the “zero-zero economy” where some people are on zero hours contracts and those at the top are paying zero tax.
The OECD report was well covered across all media, from The Guardian (Revealed: How the wealth gap holds back economic growth) to the BBC (Inequality “significantly” curbs economic growth: OECD) to Sky News (Wealth gap harms countries’ growth – OECD). Not even The Daily Telegraph (Inequality worst in decades) or The Daily Mail (Reducing inequality would boost economic growth) could spin the story in favour of Cameron and Osbourne’s awful economic policies.
Meanwhile many (including We Ladies) were wondering what the hell took the OECD so long! But be that as it may, beyond the economic-speak of “trickle down”, “growth”, and “redistributive policies”, we were also struck by some other recent stories that speak volumes about the corrosive effects of income inequality on the health of the society.
Bribery and corruption
The OECD had also made headlines the week before with its report that bribes in company deals average $14m, with 57% of them paid to win public procurement contracts, mainly in wealthy countries.
Here, two recent deals come to mind. The Royal Mail rip-off is estimated to have lost the government £1 billion and made a profit of £36 million for the hedge fund of George Osbourne’s university pal and best man. And why would the government privatise the profitable, publicly owned East coast mainline in a time of austerity?
Then there’s the case of Stephen Dorrell, the Tory MP who won’t give up his parliamentary seat until after the May 2015 General Election, despite taking up a job with KPMG, a private company that wants to bid on a £1 billion NHS contract. Dorrell himself admits his new job is “incompatible” with his role as an MP. So who’s his boss for the next five months, his constituents or KPMG?
Moreover, on the day the OECD inequality story led the news, Tory peer Baroness Jenkins proclaimed that poor people go hungry because “they don’t know how to cook” (to which one Twitter wag responded that poor people certainly know how to cook as they’ve been working below stairs for generations to feed the upper classes). What’s more, the peer showcased this gem of ingrained class prejudice while launching the damning report of an all-party parliamentary inquiry into hunger and food poverty in Britain.
“Feeding Britain” identifies a “growing budgetary crisis for many low-income families”, with a considerable number finding it difficult to afford the “three main essentials of food, housing and utilities”, due to low pay, growing inequality, the harsh benefits sanctions regime and social breakdown.
In a typically Tory mealy-mouthed way, the Baroness later faux-apologised “to anybody who’s been offended”. She should have “learned the lessons” after criticism of the House of Lords refreshment committee, on which she sits, for its refusal to share catering facilities with the Commons because they were worried the quality of the bubbly might suffer.
Also showing his intense interest in the fate of the poor was Tory MP Nigel Mills, who was photographed playing the online game Candy Crush during a meeting of the Works and Pensions Committee.
Sexism and racism too
On the same day the Baroness put her foot in her mouth about what poor people can’t do, Janet Suzman, the actor and Dame, declared from hubristic heights that theatre was invented by white people. We don’t know from whence came this flight of ignorance; we can only hope that she takes on board the ensuing criticism.
However, Suzman’s ignorant comment pales when set against Nigel Farage who, late for a meeting in Wales, blamed immigrants for there being too many cars on the road. The Daily Mail was surprisingly unsympathetic, noting that, “UKIP pays £60,000-a-year for Mr. Farage to enjoy the services of a chauffeur”.
It’s been a bad week for Farage altogether (as we’re always glad to point out). Apart from crass immigrant paranoia, he also reminded us of his lack of empathy towards women, telling a radio interviewer that women should breastfeed “in a way that’s not openly ostentatious”, perhaps sitting “in a corner”. A follow up, it would seem, to his recent remarks that women who work in the City and have children are worth less than men.