Letwin: We should redistribute

Oliver Letwin is one of the most influential members of David Cameron's team.  He was Mr Cameron's biggest backer in the early days of his campaign and has been appointed to oversee the new leader's policy process.  His Kyoto environmentalism and cautious approach to taxation have also been adopted by the new Tory leader.  When the Notting Hill set compared David Cameron to Frodo, Letwin was seen as a Gandalf figure - Middle Earth's older and wiser statesman (picture and story from The New Statesman).

Oliver Letwin has travelled a long way since being one of the authors of the controversial poll tax (I mean community charge) - one of the most regressive forms of taxation ever introduced in modern Britain.  Mr Letwin's journey has taken him from regressive taxation in the 1980s to redistribution today.

In an interview with The Telegraph Mr Letwin tells Rachel Sylvester: "Of course, inequality matters. Of course, it should be an aim to narrow the gap between rich and poor. . . not by trying to do down those with most but by enabling those who have least to share an increasing part of an enlarging cake."  Ms Sylvester is struck with Mr Letwin's use of "the R-word": "It's more than a matter of safety nets," he says, "We should redistribute money."

A Telegraph leader is unimpressed:

"In one sense, Mr Letwin is merely stating the obvious when he says "we do … and we should redistribute money". It is, however, a naive choice of word, with overtones of the belief that national wealth is a fixed and limited sum, to be divvied up "fairly" by the government... The way to demonstrate compassion, however, is not to echo the obsolete consensus that has delivered such tragedy. Britain has enjoyed redistribution on a vast scale since 1997, yet the degree of income inequality has remained unchanged. Unless radical reform is undertaken in the public services, more money and more people will be sucked out of the productive and into the unproductive sectors of the economy."

Adam Smith – the intellectual father of capitalism – thought more like today's Letwin, however.  In The Wealth of Nations, Smith said that a society’s idea of ‘life necessaries’ changed over time. Two centuries ago he wrote:

"By necessaries I understand not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct. Custom, in the same manner, has rendered leather shoes a necessary of life in England. The poorest creditable person of either sex would be ashamed to appear in public without them.”

Mr Letwin says that the Social Justice Policy Group, under the chairmanship of Iain Duncan Smith, has been charged with finding solutions to inequality.  He also tells The Telegraph that the pursuit of social justice "is not just about money... it is about the homes people live in, the lack of supportive relationships, the way parents bring up their children."

Comments

[groan]

From Wednesday's Times:

Thatcher-basher Geldof advises Cameron's team

BY DAVID CHARTER, CHIEF POLITICAL CORRESPONDENT Bob Geldof having a frank exchange of views with Margaret Thatcher in 1985 when he famously clashed with her over waiving VAT on the Band Aid single (PHOTO: PA)

BETTER known for turning the air blue, Bob Geldof has agreed to act as an unpaid adviser on global poverty relief for the new light blue Conservative Party. The former rock star turned millionaire poverty campaigner famously clashed with Baroness Thatcher in the 1980s but was successful in changing Conservative policy when she eventually agreed to waive the VAT on the Band Aid single.

Like his fellow Irish rock ambassador Bono, who endured the wrath of campaigners by sitting down with President Bush, “Saint Bob” has risen above partisan political concerns to promote his anti-poverty message. The 51-year-old former Boomtown Rat and founder of Band Aid, Live Aid and Sport Aid, who received his honorary knighthood in 1986, will come to the aid of David Cameron’s latest policy commission on globalisation. There he will form an unlikely alliance with Peter Lilley, the former Social Security Secretary, who will chair Mr Cameron’s latest attempt to rewrite Tory policy and transform the party’s uncaring image. Mr Geldof’s aides were keen to emphasise that he had not joined the party nor signed up to its policies but would act in an advisory capacity. He also remains in regular touch with Tony Blair, alongside whom he worked on the Commission for Africa. He also helped the Prime Minister to put pressure on the G8 leaders to come up with a trade, aid and debt deal at the Gleneagles summit in July. One Downing Street insider remarked last night that Mr Geldof seemed to be acting “like a good civil servant”. It is just the latest role that has brought him an estimated £30 million personal fortune, a Nobel Prize nomination and a UN World Hunger Award. A spokesman for Mr Geldof said: “His view is that this should be above politics — it is politically very important but should not be a political football.”

But Mr Cameron lost no time in using the appointment to promote the Conservative Party’s new appeal by linking it to the Make Poverty History Campaign that inspired so many activists to converge on Scotland earlier this year. Mr Cameron said that his policy group on globalisation and global poverty would study the impact of free trade and examine the interaction between trade, sustainability and the relief of global poverty. He added: “This summer, millions of British people took part in the Make Poverty History campaign. A new generation of concerned citizens want prosperity for themselves and progress for the poor — whether living on the other side of the street or the other side of the world. “Modern, compassionate Conservatism means responding to their demands.” Mr Cameron’s deliberate echo of President Bush’s “compassionate conservative” slogan seems to hold no fear for Mr Geldof. Like Bono, he has risked criticism by praising Mr Bush’s engagement with Africa even though the US leader’s extra financial commitment has yet to come up to levels demanded by the UN

Mr Cameron added: “I hope our policy group will develop ideas to enable the economic empowerment of the poorest people on our planet, for example through property rights and other institutions to promote economic development and wealth creation.

“I am delighted that Mr Geldof, though remaining entirely non-partisan, has agreed to work in consultation with the group. He will bring his influence to bear, in order to help us to go in the direction that he and we both want to go.”

The new Tory leader has already pledged to refocus Britain’s aid budget on defeating diseases such as malaria. He is planning six policy commissions to rewrite Tory aims.

But publicity won from the appointment does not come without a price. Mr Geldof is likely to denounce vocally any attempt by the Conservatives to pay only lip-service to the measures needed to end world poverty. His spokesman confirmed: “There is no doubt about that. The proof of this will ultimately be how this policy development process transfers into a serious political agenda, the Tories pushing hard for an increase in aid in the next Budget, for example.”

[it all makes sense now]

SO NOW WE KNOW WHY THERE WILL BE NO TAX CUTS:

"Thatcher-basher Geldof advises Cameron's team"--The Times

"EXCLUSIVE: Top Cameron Aide Tells The Right - Don't Expect Tax Cuts, School Choice, Right Wing Conservative Government"--The Spectator

"Of course, inequality matters. Of course, it should be an aim to narrow the gap between rich and poor. It is more than a matter of safety nets."--Daily Telegraph

[from the Daily Telegraph]

"At least DC seems to be distancing himself from Ollie's statements" yes, by appointing anti-capiatlist campaigner Bob Geldof to join Zac Goldsmith to draw up Tory policy.

As the Daily Telegraph notes:

Right way to help Africa
(Filed: 28/12/2005)

We can see why David Cameron was keen to involve Bob Geldof in his commission on global poverty. Mr Geldof has extraordinary appeal: a hero of the anti-capitalist movement, he is also a successful businessman, a Daily Telegraph reader, a Euro-sceptic and a knight.

And, for what it's worth, he is a devoted father and a skilled songwriter. The trouble is that, on the central question of how to alleviate Third World poverty, he is wrong

[it all makes sense now]

And before all the whining apologists get here claiming it's all some clever PR move with no substance, listen to your new leader (talking to the BBC):

"Announcing the new Tory group, which will be chaired by former social security secretary Peter Lilley, Mr Cameron said Sir Bob would help the party "go in the direction that he and we both want to go"."

[global-guy]

Geldof has done little to relieve poverty:

http://www.globalisationinstitute.org/blog/0506_saving_africa_will_take_humili.php

[global-guy]

http://www.globalisationinstitute.org/blog/0506_saving

_africa_will_take_humili.php

[confused]

So now we will advocate redistribution at home (Letwin) and overseas (Geldof).

[malcolm]

I'd take some of these comments seriously if only the authors had the courage to use their real names.As it is they haven't so I and hope others won't.

[Greg Jones]

While not everyone wishes to be up front about their opposition to what is going on, and some may have good reason, I think it is a shame more people won't or feel they can't use their real names. The party should not give the impression that those who disagree with the new lines will be excluded.

I am worried that Letwin's remarks illustrate an intellectual incoherence. Cutting tax and eliminating regulations has tended to increase income inequality even while the incomes of the poorest has increased in many countries in the last few decades. What he is saying now at least about income inequality may well be incompatible with a conservative approach.

[Mark Dobson]

"SO NOW WE KNOW WHY THERE WILL BE NO TAX CUTS:

"Thatcher-basher Geldof advises Cameron's team"--The Times

"EXCLUSIVE: Top Cameron Aide Tells The Right - Don't Expect Tax Cuts, School Choice, Right Wing Conservative Government"--The Spectator

"Of course, inequality matters. Of course, it should be an aim to narrow the gap between rich and poor. It is more than a matter of safety nets."--Daily Telegraph"

We seem to be moving from a one-sided debate about tax cuts (see poor old Howard Flight) to a single-minded sprint in the opposite direction from them. We need more debate in the party, perhaps via CPF, if we are to make such a radical change. This can't all be deciced by Oliver Letwin and a few others in Westminster.

[anonymous]

Malcolm:

Not everyone wants to be blacklisted by Chairman Maode.

[Richard Allen]

"This can't all be deciced by Oliver Letwin and a few others in Westminster."

I'm afraid that it is a little late to be worried about things like that.

[Greg Jones]

"I'm afraid that it is a little late to be worried about things like that."

Well, what can those of us worried about the comments of Letwin, Boles, Goldsmith etc do? I am a free market conservative who voted for Cameron and regret having done so. I feel like a lot of this stuff was saved for release until after the leadership election. There must be something we can do.

[Richard Allen]

"Well, what can those of us worried about the comments of Letwin, Boles, Goldsmith etc do? I am a free market conservative who voted for Cameron and regret having done so. I feel like a lot of this stuff was saved for release until after the leadership election. There must be something we can do."

I sympathise but I doubt there is much we can do. The party must "change to win" and I expect that those of us who don't like it are going to have to lump it.

[Editor]

On the subject of false names I think one person on this thread is posting under multiple names from the same IP address. I know who you are and would ask that you stop. Please pick an identity (or two or three) but I would ask that you stop posting under such a large number of aliases.

[Reasonable]

Realistic, you say:

"My comments and those of others were not about raising higher rates of income tax."

Whereas you had in fact responded to me earlier by stating:

""Mr. Letwin specifically said (and many here seem to have missed it) that he was not in favour of redistributing wealth by taxing the rich." says "Reasonable"

Er, no. If you want to reduce the gap between the rich and the poor you have to do this."

'This' refers back to my earlier comment which you quote.

I'm afraid many commenters here do seem to have taken Letwin's words as a wish to tax the rich until the pips squeak.

[Realistic]

"I'm afraid many commenters here do seem to have taken Letwin's words as a wish to tax the rich until the pips squeak."

No. This is a modernisers' play on words. "We're not departing from conservatism because we don't want to raise top rates of tax," isn't going to cut it as an argument with intellegent people. "Reasonable" and the party chairman should try again. We never said this was what Letwin said. We said that the aim of reducing income inequality, as opposed to helping the poor without reference to the better off, was an unwelcome policy innovation.

It is a bit like some of the sad defences of other statements which are constructed along the lines of, modernising Tories are different from Blair because Labour is socialist. No, they are not any more. And trying to make yourselves look different by claiming that they are simply makes you and our party look ridiculous.

Blair says he is in favour of low tax but like Letwin and Cameron has no plans at all to do anything about it beyond meaningless, vague, never-delivered aspirations. But at least Blair has said that it is not the aim of his government to narrow the income gap.

The last time we were in opposition we had an intellectual giant who would have explained the difference between helping the poor and trying to reduce the gap.

Sir Keith Joseph was a brilliant mind who led us out of a generation of political and policy failure. Letwin's muddled thinking won't lead us anywhere except disaster.

[Peter]

Re-distribution of wealth has no place in a Conservative Party. the concept is pure communism.
The Protestant work ethic created the successful capitalist world economy we know today. As John Calvin said " Poverty is sin, sinful idleness".

A poor person can become rich if he works hard. This also means that taxation should be minimal so as not to deprive those who work hard of the fruits of their work.

[Mike Christie]

What's with the 'threads back from the dead' thing today?

Peter, your point is well-made, but might have been better made in a more current topic thread.

[Terry the Taig]

Protestant work ethic ? Calvin?
What is this, the Orange Order economics blog?
The only redistribution that should happen is that Labour and Lib Dem seats should be given to the Tories.
Now get out of that history book andlets start campaigning for Dave Cameron

Terry the Taig