The Economy and Pensions

Part of Orders of the Day – in the House of Commons at 3:09 pm on 14th November 2007.

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Photo of Michael Meacher Michael Meacher Labour, Oldham West and Royton 3:09 pm, 14th November 2007

I do think that the reduction from 40 to 18 per cent. needs to be looked at very carefully. I know that what has excited the City has been the increase from 10 per cent. to 18 per cent., but as the hon. Gentleman points out, there is another dimension to this issue, and given the costs involved, we ought to consider very carefully whether this is what we intend. The reform was aimed at tackling the increase for those who gain massively from private equity transactions, and I do not think it was aimed at the other side. We ought to look into this matter further.

The imbalance to which I have just referred needs to change radically. Indeed, it has to if the Government's other laudable aims of reducing social disorder are to be achieved. There is abundant cross-national evidence that, in societies where income differentials between rich and poor are smaller, there is less violence, including substantially lower homicide rates, prison populations are smaller—an important issue for this country—community life is stronger, people are more willing to trust each other, health is better, life expectancy is several years longer, there is more social mobility, and educational attainment at schools is higher. That might sound like a wish list. Indeed, I found it difficult to believe until I read several surveys from different countries that illustrated those facts. The truth is that there will be no vision to excite a political response in this country until this fundamental divide, which has now grown so wide, is tackled.

I do not want to duck the question "What would you do about it?" which has been rather prevalent in this debate. I believe that, first and foremost, what is needed is much greater transparency. That might involve establishing a pay commission to set down guidelines for a reasonable range of incomes between rich and poor, and applying incentives, of which I am all in favour as long as they are applied consistently right across the range from rich to poor, not just at the top.

Equally, people should be asked whether they think it right that, in all large and medium-sized organisations, the representatives of all the main grades from the boardroom to the cleaners should, at an annual meeting of the company—a private meeting, not a public one—have to justify the pay claims that they are making at the expense of potential pay increases for all other grades. That is my view, but the proposal should be tested more widely. If people believe that it is right, implementing it would inspire a vision of real fairness unmatched by so much of the rhetoric of today.

The third component for a vision that is sorely needed in Britain today to redress the slide into privatised power and money is a renaissance of the high ideal of public service. Putting some of the largest US health care operations in charge of commissioning the bulk of NHS services, as is now happening, and spreading privately sponsored academies throughout the education system—with, according to the latest evidence, distinctly mixed and counter-productive results—has much more to do with market dogma and business lobbying than with improving performance on the ground.

That applies equally—I say this with real feeling, given the situation in my constituency—to housing, where there is a serious breakdown involving 1.6 million people being on local authority waiting lists. In my constituency, there are 11,000 people on the waiting list yet the total number of council houses after all the sell-offs is only 12,000 or 13,000. There are also 100,000 homeless people in this country. As the Chancellor has said, the Government are trying significantly to increase house building, which I strongly welcome, but the extra 40,000 homes a year is still greatly inadequate. The Government still seem to put too much emphasis on private owner-occupation, when the poorest quarter of the population will never have the necessary wage levels and job security to pay a mortgage.

Other areas of concern include the privatising of the probation service and the outsourcing of local government functions through the euphemistically named strategic development partnerships. Something else that really distresses me is the swingeing cuts at the BBC. I am all in favour of value for money, but those cuts are being made on such a scale as to put the whole concept of public broadcasting at risk. I think that those are areas where there is a strong case to call a halt and undertake a full-scale review, as I believe my right hon. Friend the Prime Minister seemed to be hinting at and recommending.

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