Mike Peters – I think in any ‘liberal’ party worthy of the name, we would find it difficult to ban people from opting out and buying their own health care or education, especially where they are ALSO contributing taxes to help fund the public provision. However, I agree with your general thrust that inequality will only be seriously reduced once private provision declines – the liberal social(ist?) idea seems always to have been ‘improve public provision to the point where nobody but the deluded thinks they get a better deal by going private, and private provision will wither away’. There may a case, as some in the far right of our party might argue, that equality might also be delivered by radical restructuring of public provision, so that private institutions deliver it, with the state merely paying/buying it. But personally, I think the transition to this is too complex, and any attempt to implement such a policy would likely collapse in chaos and confusion.
Indeed, according to one private sector teacher of my acquaintance, who has also worked in the public sector, we are already a long way along the road to the former approach – she told me she would not pay for the provision she delivers in the private school, when she can get an good education for her kids at the local village primary! This seems to me the reason why the Tories are so keen on giving a select few poor folk the chance to have private provision, e.g. the approved places scheme – they need to give state money to the private sector to prop it up, because it cannot stand on its own two feet.
The real key is to eradicate the hotspots – usually urban – where state provision really isn’t good enough. This cannot be done piecemeal by academies/Foundations, as Labour has tried to do, but needs real investment to give good teachers/medics an incentive to deliver services in more challenging areas. The Lib Dem policy of a ‘pupil premium’ for such areas is one way of addressing this. Whether the leadership – and the public – will think it ‘affordable’ in the current climate of panic about government debt is another question.

Thank you Duncan for highlighting the need for more equitable outcomes as well as opportunities.

This is the chapter of RtS that kept me in the LD fold !

Too much financial inequality kills. Human socities seem to tolerate having a small proportion of very wealthy individuals, or families, very well indeed. But if major financial inequality develops in the general population, pretty soon all of us – rich, poor and in-between, start dying a bit younger than we otherwise would have been expected to. No-one knows how that works, but it has been observed too often to doubt that it is real. My impression is that the effect is clearer for wealth rather than income.

We do not have any effective way of substantially correcting this through taxation.The last time England enacted what was, in intention, a comprehensive annual wealth tax was the Poor Law of 1601 (think of a proportional tax on wealth with a rough threshold.) No-one has really done better since, anywhere. Death and inheritance duties – we introduced ours in the First World War – are attempts at wealth taxes, but the wealthy only really pay them if they have bad luck or are personnally very dutiful. Income taxes are not aimed directly at wealth, and become ineffective at high rates because it pays to find ways of converting your receipts into forms which do not attract the tax. Simplifying the tax and eliminating loopholes is worthwhile, but the real problem is that it can be perfectly legitimate to treat many receipts as, e.g., your company’s capital gains rather than your personal income. (Maybe a progressive comsumption tax would do better; but the idea has not been properly developed.) A proper Land Tax is less undesirable than most taxes on economic grounds, but for correcting financial inequality it won’t work. The rich will simply hold less land and more other assets. (Incidentally, we have no real idea whether more financial inequality is likely to favour or discourage economic growth; though we have reason to think both that acceleration in economic growth is likely to lead to a temporary increase in inequality; and to expect that ineffective redistributive tax measures will reduce economic efficiency and reduce likely future wealth for most people.)

So although considerable wealth redistribution is in the common interest, what we can do about it now is strictly limited. Our policies for closing tax loopholes and eliminating the horrible inequalities, hardship and stress caused by Gordon Brown’s mish-mash of overlapping marginal tax rates, benefit and tax credit withdrawal rates are useful initial steps, but not large ones. Vince Cable’s Committe or Commission to tackle high pay may not achieve anything, but it has a chance of pricking the markat bubble in pay for senior executives (the only thing supporting the current high pay rates for senior executives is that no significant numbers of firms have tried offering less). And so on. We must keep the objective in focus, but accept that we can only creep towards it as opportunities offer.

Health inequalities are more a reflection of people’s education than of their wealth (the strongest data on that is for the USA where ability to pay more for health might be expected to make a real difference). More education also reduces stress; and the two factors may be linked. But more and better education takes decades.

Further factors likely to reduce stress concentrate round issues of giving people more personal control over how they live their lives; in the workplace and where we live. More control over our own lives implies more social equality. It can be and is being delivered, bit by bit; as many LibDem local Councillors will tell us. There is no way of delivering more than a good smidgen of it from Whitehall in one or two Parliaments.

By all means let’s re-commit ourselves to implementing the party’s fundamental commitment to greater equality; but also let’s acknowledge that the effort needed will outlast the lives of many of us.

An unequal society is not a fair one

But neither is an equal one, surely? I don’t mean that in a snarky way, just writing a statement of fact that I don’t think should be ignored.

Also I don’t really see the drivers of inequality as the ’super-rich’. Rich ghettoes are created incremental by relatively normal people making rational decisions to try and climb the social ladder themselves. We are all complicit, through individual choice rather than ’society’.

Furthermore – and this is the final reason for advocating a greater emphasis on reducing inequality – it should be popular with the kind of people who are likely to vote for us, generally highly educated, socially liberal and progressive

Duncan Brack knows far more than I about this kind of thing, but I don’t get this. Surely in terms of a political motive for reducing equality, it is better to aim it at those on low-incomes who would benefit most. I really don’t understand why the party seems to insist on stimulating schaudenfreude rather than concentrating on relieving those on low-incomes through raising the lower threshold. “Hey you, pay less tax” seems like a good electoral slogan to me.