Rich pickings

Rich pickings
Larry Elliott
April 30, 2007 2:00 PM

http://commentisfree.guardian.co.uk/larry_elliott/2007/04/rich_pickings.html

Denis Healey never actually ever said that he would tax the rich "until the pips squeaked". Even so, the super-rich got the message in the 1970s that Britain was definitely not the place where they were likely to get the warmest of welcomes. The air was thick with whingeing from rock's trashocracy as they jetted off to their tax havens to produce their dreary little records.

Times change, don't they? There were two fascinating things about the Sunday Times rich list published at the weekend. The first was just how rich these plutocrats are, with Britain's 1,000 richest people increasing their wealth by 20% last year and the number of billionaires up from 14 to 68. The second was that only three people in the top 10 richest people were born in England, with the table headed by the Indian-born steel magnate Lakshmi Mittal and the Russian oligarch and Chelsea FC owner, Roman Abramovich.

As the Sunday Times notes, the New Labour decade since 1997 has been a golden age for the rich, particularly the expatriate rich who have been attracted here by Britain's favourable tax regime. The rich in Britain are getting richer more quickly than the rich anywhere else in the world - not something one would imagine Tony Blair is likely to highlight when he makes his valedictory address to the nation.

The argument in favour of of the government's hand's-off policy to the rich is that the wealth trickles down to the rest of us. Mittal and Abramovich buy houses and cars, employ gardeners, lawyers, estate agents, caterers and so on. Better to have them spending their dosh here, in other words, than for them to spend it in New York or Paris. From this standpoint, it should not really matter that the gap between the rich and the rest is getting wider, because all of us are getting richer; moaning about the super-rich is simply the politics of envy.

Ah yes, the politics of envy! This is always a convenient stick with which to beat anybody who dares to raise even the slightest objection to widening inequality. Yet, it is wrong to think that a Labour government can ignore the growing gulf between rich and poor that has been allowed to develop on its watch.

For a start, not everybody benefits from the arrival of the super-rich and their money. One reason house prices are unaffordable for those on modest incomes in London is that the market has been distorted by sales at the top. Moreover, the sort of jobs that have been created by all this wealth tend to be low-paid, low-skill jobs such as security guards and cleaners. The percentage of the population employed in some form of domestic service in Britain is as high now as it was in the 1860s: something else I don't expect to hear Blair mention.

Even so, Labour's feather-bedding of the rich exacts a political cost. When the government receives a bloody nose at the polls this week, one reason will be that voters believe deep down that ministers care more about Mittal and Abramovich than they do about people at the bottom of the heap. Times have changed. Voters don't want to hear the pips squeak. Nor do they want "howls of anguish" (something Healey did actually say). They wouldn't mind the odd whimper of discomfort, though.

"The percentage of the population employed in some form of domestic service in Britain is as high now as it was in the 1860s:" !!!!!!!!

To make sure the growing ranks of the poor don't steal anything from the growing ranks of the rich!

Good post