Letter – Why the ownership of our economy must be widened – Mick Roberts

We will be reproducing letters written to the Crewe Chronicle written by our very own activists. This way we can preserve those letters for your viewing leisure. This is the first of 2 from prominent activist and trade unionist Mick Roberts. Hope you enjoy.

Sunday 25 February 2018

Why the ownership of our economy must be widened.

The Tory government are effectively doing nothing about the crises within our health service, social care, housing and education. On Brexit I am unsure as to whether the government is genuinely inept or is cleverly using the semblance of incompetence to obfuscate their real aim of de-regulation. However as important as all the above issues are, without doubt widening wealth inequality is the biggest societal challenge we face as a country whilst the Tories stay in power. To address inequality, we must firstly acknowledge that our soaring levels of wealth inequality are the result of political choices rather than some inevitable ensural of human advancement.

It cannot be right that in the UK the wealthiest 10% own half of the nation’s wealth whilst the poorest half of the population own less than 10%. Of course, there are many people trapped at the bottom who have no wealth because their debts exceed their assets. Contrast this with the five wealthiest families who between them have the same wealth as the poorest five million households.

There are several factors driving these astonishing levels of wealth inequality:

  • Rising house prices mean property owners are getting wealthier.
  • Wage stagnation prevents low wage earners from amassing any wealth.
  • The government’s monetary policy purposely jacks up the value of financial assets, which the poor cannot afford.

The reasons why high wealth inequality should concern us most is because it arrests social mobility, stifles economic growth, reinforces disparity in health and educational outcomes and results in democratic bias with disproportionate influence for the wealthy contrasted against under representation from lower groups. In truth wealth inequality drives all other inequality. For example, look at housing. The explosion of ‘economic rent’ (the situation whereby the return on an asset grows over and above the cost to supply the asset – rents have risen with no corresponding increase in property owner costs).

In terms of economic distribution, upward transfer of wealth is deeply regressive and unfair. It simply amounts to more of the pie going to the already wealthy. This serves to limit economic growth because the wealthy, unlike those on low incomes, are less likely to put this money back into the real economy.

Labour, under Jeremy Corbyn, recognises the need to widen ownership of our economy and its plans for reform are much needed to redistribute wealth, rebalance the economy and promote social justice and cohesion. Our current limited economic ownership means many important decisions about our economy are made by, and for, an exclusive elite. A more inclusive ownership approach would help the economy deliver for the many and lead to a fairer, more egalitarian society. Whilst attracting press hostility, Labour’s plans are mainstream ideas built on solid Keynesian economics.

Labour’s plans to open-up the economy will help ordinary people. For too long our basic services have been sold-off on the cheap under rip-off privatisations that continue to pay shareholder dividends whilst giving consumers higher prices and poorer quality. For example, water bills have increased 40% since privatisation, and our private energy providers were guilty of overcharging their customers by £2 billion in 2015. The UK must take public utilities back into public ownership. Labour will do this to deliver lower prices, increased accountability and a more sustainable economy.

Our elevated levels of wealth inequality are not immutable, they are the result of deliberate political policies aimed at helping the rich to get richer. Labour, in government, will make different choices, ones that will help everyone to prosper and its plans for wider social ownership will radically transform wealth distribution.

The next Labour government will implement democratic socialist policies that will deliver real changes to help build an economy which distributes the gains from growth more equally, efficiently and fairly. That is why the privileged class, the wealthy elites and our right-wing press are so actively working to discredit Labour.

If the UK is to build a fairer future for all then Labour’s reforms are a must.

Yours sincerely
Mick Roberts
Labour Party member


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