Talk of a return to the 1930s fills most of us with dread – conjuring up the spectre of mass unemployment and economic devastation. But for the rich, it recalls an era of gross wealth for a tiny minority.
The last 30 years has seen a historic shift in the distribution of income in Britain.
From the end of the First World War until 1979, the share of total pre-tax income going to the top 1 percent of the population declined fairly steadily.
The rich didn’t exactly go short of course – even in the very “hardest” time of 1979 these parasites still grabbed 6 percent of the total wealth.
But that was only a third of the share they had been getting in 1918. It was a time that economists called “the great leveling”.
From the mid-1970s that trend reversed.
We are talking here about pre-tax income – so it wasn’t just that Tory prime minister Margaret Thatcher cut taxes for the richest after she came to office in 1979.
It is also that the introduction of harsh market measures, and the series of defeats for working people in set piece battles, such as the Miners’ Strike of 1984-5, opened the way for the rich to loot even greater amounts of income.
It will perhaps come as little shock that the advent of a Labour government from 1997 made precisely no difference to this process.
Under Labour the richest continued to suck in more and more so that today the richest 1 percent now have nearly 15 percent of the total pre-tax income.
That level was last reached in 1941! And even these figures slightly obscure the real plunderers.
The richest 0.1 percent – one in a thousand – now seize almost 5 percent of the total.
These are the top 47,000 people. To get into this group of the “very, very rich” you need an income before tax of more than £350,000 a year.
Their combined pre-tax income is more than £37 billion a year.
But surely the tax system smoothes out some of this inequality? After all, whenever Lord Mandelson is reminded about his famous quote, that he was “intensely relaxed about people getting filthy rich”, he adds that the quote ends “as long as they pay their taxes”.
Of course they don’t pay much of their taxes, but even if you assume they do it doesn’t make much difference.
The rich have to give up a bit, but the rise in the rich’s share of post-tax income has been even more dramatic than in pre-tax income.
The top 1 percent’s share of the post-tax income rose from 4.2 percent in 1978 to 9.4 percent in 2000.
The increase continued after the election of Tony Blair’s government in 1997, and if the trend continues the share will soon reach that observed in 1937.
In the case of the top 0.1 percent, we have precisely returned to the situation before the Second World War.
Meanwhile, at the other end of society, the share of income has actually fallen for the poorest tenth of the population. In 1997 they had a princely 2 percent. Now they get 1 percent.
Today the richest tenth have income about equal to the bottom 60 percent of society.
Labour Party pressure group Compass has called for a “high pay commission”.
And the Labour conference in September may hold a limited discussion on “banking and executive remuneration, bonuses, economic stability, high pay commission”.
Speeches will no doubt highlight the fortunes paid out to the bankers who presided over the financial collapse – and the fact that many of them have emerged with their wealth unscathed.
Even the government-owned Royal Bank of Scotland has offered an “incentive package” worth nearly £10 million to chief executive Stephen Hester.
But the rot goes much deeper than this. And despite the occassional words of outrage, Labour is not going to do anything serious to attack the rich.
As unemployment grows and more and more people face stress, hardship and the destruction of their hopes, there will be increasing discontent about the way the rich live.
There is a growing feeling of “them and us” in Britain – a feeling of class. It doesn’t always explode into formal struggle, but it is there.
Dominic Lawson, not a left winger, wrote recently in the Independent newspaper that, “If there is a bloody Bolshevik revolution in this country, I think I can guess the inflammatory pamphlet which will be waved by the people putting the wealthy up against the walls and shooting them.
“It will not be the Communist Manifesto. It will be the Sunday Times Rich List.”
In truth I think it might be both.
I can’t promise that there will be a Bolshevik revolution in Brighton on 27 September, but the government’s cosseting of the rich is a good reason to demonstrate at Labour’s conference.
Top executives keep raking it in
- The average income of the chief executives of Britain’s top 100 companies has increased by 295 percent over the past decade.
- The ratio of their pay to employee pay has risen from 47 times to 128.
- worker on the minimum wage working 40 hours per week would have to work for 226 years to receive the same money as one of these top bosses does in a single year.
For more details of the protest at Labour Party conference, go to » www.righttowork.org.uk