Friday, February 23, 2007

Peter Hain Heralds the Return of the Politics of Envy

A reader has sent me an article by Simon Nixon of Money Week in which he lambasts Peter Hain. He accuses him of reverting to old style 'envy politics'...
I’m usually one of those who believe Tony Blair is among the worst prime ministers in modern times. But now and then something happens to remind you just how much we all owe him. I had one of those moments this week when I read that Peter Hain was calling for City bankers to give away two-thirds of their bonuses to charity. Sounding more like a gangster than a minister, he warned that if they didn’t hand over their cash, others would take action... Blair’s genius is to have led a government stuffed with people like Hain...for ten years and yet to have stopped them from destroying the economy, as they did in the 1970s. Hain and his friends forget that the City already pay tax at 40% on everything they earn. If they gave away a further two-thirds, they would be left to keep just 20% of their earnings. If he thinks they should be taxed at 80%, he should come out and say so. He won’t, of course, because he knows the City is vital to the UK economy... In fact, Hain’s beef with the City has nothing to do with economics, or even morals. It’s about aesthetics. He doesn’t think it looks good to have 4,000 people in the City earn more than a £1m a year. The less well paid could be offended. Rising inequality is bad for social cohesion. If the bankers don’t give way, there is no knowing where public pressure – no doubt whipped up by demagogues like Hain – will lead.

I don’t buy this analysis. For a start, I don’t believe people care about inequality nearly as much as Labour politicians think. As a financial journalist, I spend my professional life among people far wealthier than me – indeed, the very people Hain wants to give their money away. At a recent dinner, I tried to guess the combined wealth of the other guests and put it at about £2bn. I reckoned the next poorest was probably worth £10m more than me. But that didn’t tempt me to sound the tumbrils. What people really care about is opportunity. Most people accept wealth inequality is a fact of life. What they resent is being denied the chance to compete. What struck me about my fellow diners was not only how competitive they all were, but how none had started out wealthy. That’s a huge change in the City even in the 15 years since I started work, when there were still many people at the top who seemed to be there simply by dint of heredity. The Sunday Times Rich List bears this out. Three-quarters of those appearing in it are self-made, whereas 20 years ago, 75% inherited their wealth. Britain should be proud of this record of social mobility. What should really worry Hain is that, thanks to this Government, social mobility has actually got harder.

A United Nations report finds that British school children are the bottom of the league among 21 developed countries on almost every measure from education to health and happiness. The Confederation of British Industry has pointed out time and again that our education system is churning out school leavers without the basic skills to take their place in the workforce. Last week, Sir John Rose, the chief executive of Rolls-Royce, warned that, thanks to Britain’s open borders and reluctance to protect national companies, the UK economy will live and die by its skills. And right now, our skills aren’t good enough. A generation is being denied the chance to compete effectively. It is that – and not the fact that some banker in the City earned a £10m bonus last year – that will make people resentful. The City understands this only too well. Quietly, without fanfare, many bankers, hedge-fund managers and private-equity people are giving away large amounts of money, much of it to educational charities. Business and the City have been major backers of Blair’s City academies – schools that he had to fight to establish in the teeth of opposition from many of his own party. It is Hain and Prescott, with their ideological objection to selection and competition and their insistence on a one-size-fits-all mediocrity that poses the real threat to Britain’s social cohesion. Blair may have succeeded in preventing his colleagues from destroying the economy. But it will be up to his successors to deal with the consequences of a failed generation.


Anonymous said...
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Anonymous said...

Peter Hain may well be an unctuous, hypocritical wierdo, but the very fact that Simon Nixon was busy trying to tot up the combined wealth of those around him at a business jolly shows either that he is envious of their money himself, or in awe of the money around him.

I don't know which is worse.

Anonymous said...

You are right Iain, people want opportunity. I'd like to see equal opportunity but we won't be getting that while the city is still stuffed with ex public schools produce.
Equality of education for all, and the other equalities will follow according to ability.

CityUnslicker said...

i think this is a good article. Although I disagree with his points on social mobility, which by all measures is falling, the idea that we could tax people at 80% is madness.

Monaco is not that far away and even Hain should remember this is where they all went in the 1970's.

I really hope there are no votes in the politics of envy.

Rush-is-Right said...
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Anonymous said...

Iain I think you miss the point.

The reason why a vaste magority of socialists are socialists is precisely because of their envy of other peoples wealth.

Envy is the basis of all Marxist theory. So much so, it is the reason why Marxists always believed that their would be a revolution in all capitalist countries one day.

Just because that day has not come and looks further away then ever. Does not mean that Marxists have lost faith in their envious religion. Why not its won them every election that they have won.

We all know that there are envious people in all parties. So there are still votes in it.

Try a quick trip to Cuba to see a country were everyone but politicians and policemen earn the same. Cuba is a place where words cant describe how bad things are and can get.

God said that a good man should give at least 10% of his wealth to the poor.

I calculate that Gordon Brown is currently taking 70% of mine. Thats not including dedts he is creating in my childrens names.

Even my children are now giving to charity. They cant vote yet, dont have an income and nobody asked them what they thought on the matter, but pay they must.

The Popes got nothing on me, or my kidds.

Mostly Ordinary said...

I have to say that the possible candidates for the Deputy post just shows what a bunch of lightweights the Labour Front bench are.

Rush-is-Right said...

city is still stuffed with ex public schools produce. (Billy).

Is it? I've worked in the City, in the Lloyds market, and IF I were to generalise (which I don't like doing) I would characterise most of those working there as Essex wide-boys made good. Public school boys (like me) were rare.

David Lindsay said...

"Hain and his friends forget that the City already pay tax at 40% on everything they earn"? As if! This would be true if they condescended to pay tax at all. But they don't.

In fact, in practice, the richest fifth of the population pays a far smaller percentage of its income in tax than does the poorest fifth, while the latter also gives a far higher percentage of its income to charity: such is David Cameron's superclass, no more fit to run the country than would be the underclass (although real life characters from 'Shameless' are at least much more numerous, and found in all parts of the country), and utterly convinced that its wealth equates to "merit", in marked contrast to the aristocratic social conscience of the past.

Cameron has not seen the last of that Bullingdon Club photograph, or heard the last of everything that it respresents. So much for his attempts to sell himself, Blair-like, as just an ordinary (if vaguely upper-middle-class) husband and father in early middle age. No, he isn't.

The Military Wing Of The BBC said...

"Hain and his friends forget that the City already pay tax at 40% on everything they earn."

actually its 41%

The Gordon special NI 1% surcharge is easily forgotten

Old BE said...

David Cameron's superclass

Did I miss something? I thought Blair has been in charge for ten years not Cameron.

That Labour have to resort to attacking his background shows how little intellectual grit there is in the party.

And the person who decries the public schools' strangehold on the professions is forgetting who destroyed our state school system in the 60s and 70s.

Anonymous said...

Iain, you do hit one nail firmly on its head, NuLab vs OldLab. The 'success' of Bliar in controlling a government made up of these disparate views is demonstrated everyday in a society. The real motivation of the Hains, Blears, etc is simply power and greed. They do not have any political convictions, that is essentially the lesson we must learn. The disaster left behind by 10 years of Bliar is a direct result of electing a government with no core principles, no vision and no plan. The drunken policy swagger, from latest headline to next initiative and back again,is the inevitable result of NO guiding ideology or common purpose. The reason they have achieved so little value for the money spent over 10 years is simply they had no idea of what they wanted.

Vacuous speeches about equality, discrimination, world poverty etc were always pointless if not backed up by coherent, thoughtful policy.

So now you know why so many Tory members are deeply unhappy at Camerons neww direction. The horror that might be 5 years of a similary emtpy government from either side is plain to see. The polls are improving for the Tory party but against what opposition. Apathy remains the single biggest risk to Cameron. A low turnout election driven by lack of meaningful policy alternatives, the knowledge that labour will lose anyway and no 'real' Tory policies to galvanise voters may let in a hung parliament.

If Cameron wants a mandate for real change he needs a united party behind him and needs radical policy, not timid middle ground offerings to galvanise people. Both are to be found in traditional Tory policies on tax, europe, law and order and education. Time to be a little bolder.

Schoolboy-Error said...

Iain,Hain's remark is at the other side of the bell curve to the pernicious examples that should be flagged up.Every time a Labour politician sneers about 'Tories' they are doing the same thing:pandering to the assumed envy of their supporters.They are sneering against ordinary men and women-not the super-rich (who they might argue should be the subject of class struggle).How does this fit in with a 'respect agenda'??Pointing out Hain's example is superfluous.EVERY DAY there are instances where these politicians sneer at and label ordinary working class people who are members of the society that they claim to respect.Those cases are the ones that should be reported and written about.They have no values,so they invent enemies to pander to the baser instincts.You can't disect Modern Labour,as at the first touch of the knife,it falls apart revealing a hollow shell.

Anonymous said...

I have never been able to take Hain seriously since his patronising, dictatorial and above all stupid statement to campaigners for a referendum on the EU constitution that "they may as well put their placards away because we're not having one". It was obvious to anyone who picked up a paper that Bliar would be forced to call one when polls were 80-90% in favour.

About the only good thing about Hain is that he would be less of a total disgrace as Deputy PM than Prescott. Anybody who has read Sir Christopher Meyer's description of meetings between Cheney and Prescott must blush for this country and the impression we give to the man who is a hearbeat away from the most powerful job in the world ...

David Lindsay said...

"And the person who decries the public schools' strangehold on the professions is forgetting who destroyed our state school system in the 60s and 70s." It's been a long time since the 60s and 70s, londontory. Do you know who was in government between 1979 and 1997 (or, for that matter, between 1970 and 1974)?

And can you name the Education Secretary who closed so many grammar schools that there were not enough left at the end for her record ever to be equalled? I'll give you a clue, she was Prime Minister from 1979 to 1990, during which time she replaced O-levels with GCSEs.

Rush-is-Right said...

"About the only good thing about Hain is that he would be less of a total disgrace as Deputy PM than Prescott. "

Who says? I rate the buffoon index at about 9 out of 10 in both cases.