When Mrs Thatcher came into power in 1979 she, with Sir Keith Joseph, introduced a set of policies which are now known as ‘neoliberal’. The core idea was to cut back on government and reduce tax for the wealthy to encourage them to invest more in business. The wealth would ‘trickle down’ to the poor.
Westminster governments since then have all followed the same policy. Whether they were Tory or Labour, they continued to believe that government should be cut back – and that tax on income was bad for the country (they meant, bad for votes…)
So by now, 38 years of neoliberal policies later, you’d expect to see some pretty good results. You know, evidence that wealth had in fact trickled down.
The data on wealth and income inequality from the Office of National Statistics goes back to 1978. The key measure is the ‘Gini coefficient’ https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/datasets/nowcastinghouseholdincomeintheuk .
The Gini coefficient is a measure of the way in which different groups of households receive differing shares of total household income. A higher Gini coefficient means greater inequality of household incomes, a lower Gini means more equality.
In 1979, when Mrs Thatcher came into power, the Gini coefficient for non-retired households in the UK was 24.5. Since then it has risen steadily, and in 2014-15, the last full year of data, it was 33.2. That is more than one third (35.5%) more inequality than at the start of the neoliberal experiment.
Failure. The neoliberal experiment failed. Wealth did not trickle down. It floated up. (You don’t need statistics to tell you this. Spend an afternoon at one of Scotland’s busy foodbanks and you’ll see the real human suffering behind the Gini data.)
You would think that decent, honest politicians would admit the failure. Confess that Tory and Labour neoliberalism has not worked, and admit that they are looking for an alternative.
Wrong. Brexit Britain is built on neoliberal policies. The ‘Singapore’ model is low tax, little government and little welfare. And a ‘Hard Brexit’ means more austerity because (a) Scotland will lose its currently relatively generous EU grants and (b) the UK will lose businesses, and thus tax income, to the EU.
In heading for Hard Brexit, the Tories are not only condemning people in Scotland to more and deeper poverty.
They are also fighting the failure of their 38-year experiment.