Inequality

A few days before the vote on Brexit, a crowd of Democratic Party grandees gathered in one of Manhattan's toniest venues. Old friends and allies happily greeted one another, and as liquor unlocked emotions, one of them turned nostalgic about his stint in the Clinton Administration -- a happier time, when the party was unified around the cult of political pragmatism known as triangulation. 'Yes,' said a misty-eyed associate who also remembered those days fondly. 'We didn't have the inequality thing.... How did we miss it?' Propriety prevents me from identifying the participants, but the clueless arrogance about 'the inequality thing' largely sums up the reaction to Britain's Leave vote in America's capital of high finance and outsized intellectual pretentions.

I spent Sunday at the Sage Gateshead watching an epic performance of Götterdämmerung (I declare an interest, as a trustee of Opera North), so my head was full of it as I braced for more political backstabbing and immolation on Monday. That was very much the way it went as Andrea Leadsom fell, Theresa May rode her horse into the ring of flame that is the forthcoming Brexit negotiation, and Jeremy Corbyn, still clutching Labour’s tarnished ring, was dragged underwater by Angela Eagle, unlikeliest of Rhinemaidens. Enough of the Wagner mash-up: what really caught my ear during the brief moment between Mrs May’s campaign launch and coronation was her attack on the business elite.

“Inequality has gotten much worse in the United Kingdom,” declared the Nobel laureate Joe Stiglitz when he was on Andrew Marr’s Start the Week last month (clip below). It’s one of those things that ‘everyone knows’ which is (to put it politely) not supported by the data. The latest inequality data came out today, taking us up to 2013/14. There are various measurements, but you get the overall picture (above). As David Cameron said in Prime Minister’s Questions yesterday, inequality is lower than the levels inherited under Labour. There has been a lot of talk about surging economic inequality recently, and lot of books about the problem. But not much evidence.

Ed Miliband has wasted little time in returning to speaking duties in the House of Commons. George Osborne came to the Chamber to announce £4.5bn of savings - made up of £3bn from non-protected departmental Budgets and £1.5bn from asset sales, including the disposal of the government’s remaining 30 per cent stake in the Royal Mail - and Miliband was in place to hear him. Once Osborne’s duel with the new shadow chancellor Chris Leslie was over, Miliband rose to speak. Unlike when he was leader of the opposition, Miliband was heard in respectful silence — Tory backbenchers, perhaps, took their cue from Osborne who declared that Miliband had earned the ‘respect of the House’ by turning up to the debate.

Labour is proposing to balance the current not the overall budget. This is presumably because they think that borrowing to spend money on capital projects is a sensible policy. But you wouldn’t have known that from watching Ed Miliband on BBC1 just now. In response to questions from Evan Davis, Miliband was determined not to say that Labour would borrow to invest. In a highly disciplined performance, Miliband would also not engage with Davis’ questions about inequality and whether it was a good thing if everyone got richer even if the gap between rich and poor widened. Indeed, Miliband was so cautious that you began to wonder if he’s started to think that this is now his election to lose.

Had the public been asked, before Monday morning, to identify two MPs who stood for honesty and decency, the names Jack Straw and Sir Malcolm Rifkind would have been prominent among their replies. Both have served as foreign secretary, Straw also as home secretary and justice secretary. Neither seemed unduly driven by personal ambition, nor were they the worst offenders in the expenses scandal. Both are probably right in saying that they have not broken any rules when discussing work opportunities with employees of a Chinese company who turned out to be undercover Daily Telegraph reporters. But it is astonishing that both seemed to believe this sufficient to let them off the hook.

Boris Johnson is about the only politician in Britain to stand up for the rich, pointing out that while they may be annoying, they tend to create jobs and prosperity and having plenty of that is no bad thing. The Mayor was interviewed for the latest Freakonomics podcast, boasting that: "London is attracting huge amounts of international investment... London is to billionaires what the jungles of Sumatra are to the orangutan. It is their natural habitat."   Here it is the podcast - Boris is at the start:- "I'm sure you like your poor people too," replied the presenter - which is an odd question. Does welcoming wealth imply being sniffy about the poor?

(Update: you can now watch the documentary online here) Inequality is rising up the political agenda right now, but the debate usually descends into clichés about wealth, bankers and tax. On Monday, I try to look at the subject more broadly in a Dispatches documentary for Channel 4 entitled How the Rich Get Richer (clip above). I write about it in the Sunday Telegraph today. Inequality UK, a documentary presented by Fraser Nelson from Fraser Nelson on Vimeo. First, the problem is not (as Ed Miliband would have you believe) rich people paying zero tax. For the documentary, I submitted a Freedom of Information request asking after the top 0.01 per cent of earners – ie, the top 3,000. They pay 4.2 percent of all income tax, more than the bottom £9 million.