...a blog by Richard Flowers

Tuesday, July 08, 2014

Day 4932: You Can Prove Anything With Statistics Part Deux


This time it’s Tom Clarke writing in the Gruaniad to assert:

“How the Tories chose to hit the poor”

(and just look at all those buzzwords in that URL!)

“George Osborne claims to have cut inequality,” adds the sub-editor. “But look behind the figures and it's clear the Conservatives can't take any credit.”

To summarize: the existing data points do not agree with his thesis so he says that they don't count and makes up what next year's figures will say instead.

It seems Iain Drunken Swerve isn’t the only one for whom denial is a preferred tactic.

The implications of the piece are that the CHOICES of the Coalition are bad ones, and therefore that any beneficial outcome is accidental. To come to that conclusion it is necessary to downplay, ignore or indeed run away and hide from the contribution of the Liberal Democrats to Coalition policy.

Inequality, measured by the Office for National Statistics figures for 2011/12, FELL in the UK under the Coalition, and the new 2012/13 figures show that fall has not reversed.

As Lib Dem Voice reports, the Institute for Fiscal Studies have commented that inequality is now lower than since before Tony Blair brought Labour back into government in 1997.

This is a fact.

A startling one but indisputably a fact. Startling not just because this is the first fall in inequality for nearly three decades, but also because it is unique among Western nations.

Is this a beneficial outcome?

What has happened has happened in the worst way. I – and I think most Liberals – would prefer to reduce inequality by raising everyone up, not grinding the richest down. Making the rich pay, that’s Labour’s way. In this recession, everyone has had to take a hit, including hitting some of the least well off, but proportionately the better off you were the more you’ve been asked to pay – from each according to their means, as it were. And it must gall Labour and the left that this Coalition has been more socialist than the socialists ever were.

But if, as Labour do, you subscribe to the “Spirit Level” thesis that more equal societies are happier, healthier and better then you would have to say this is a beneficial outcome. Even if you don’t subscribe, you would have to accept that the cost of the Crash had to be borne by someone, and these figures show that the better-off have shouldered their share of the burden. Those better able to pay have paid and as a result there has been a slight rebalancing of income after tax and benefits.

So is this just by accident or does it down to the choices we have made in government?

It is not difficult to see how it’s happened. Salaries were frozen or even reduced, whereas, at the insistence of the Liberal Democrats, benefits continued to be increased*, and with a triple lock pensions – more than half the Social Security budget – were and still are increased by even more.

(*Full disclosure: for the period covered by these figures, benefits were increased in line with inflation. For 2013/14 benefits were still increased, but we could not stop George Osborn capping many increases, but not pensions, at 1% – a cut in real spending power as it is below the rate of inflation. Because pensions increase by more than inflation, the impact of this is uncertain, but it does, of course, form the basis of Mr Clarke’s speculation that inequality will rise again in next year’s official figures.)

Add to that the effect of the flagship Liberal Democrat tax policy of raising the personal allowance, a tax cut directly aimed at the less well-off earners.

And the Liberal Democrats also required, in the price for Coalition, that Capital Gains Tax – a tax largely paid by the well-off – be increased from Labour’s inequality-creating low level of 18% to a more reasonable 28%.

Furthermore, the Lib Dems would not let Master Gideon reduce the top rate of tax from 50% to the 40% rate that it was under Labour.

Remember when Labour raised the top rate to 50p… for a MONTH. The Coalition because of the Liberal Democrats has a rate of 45% that is still higher than under any budget presented by Gordon Brown.

Remember when Labour DOUBLED the tax paid by those in the lowest band, and how Mr Balls still wants to reintroduce the 10p starting rate? The Coalition because of the Liberal Democrats gave those people a ZERO starting rate and took them out of paying income tax altogether!

You can see the theme here: Labour under Mr Blair and Mr Brown – who, if you recall, were in the words of Mr Peter “Prince of Darkness” Mandelson: “intensely relaxed about people getting filthy rich” – saw inequality rise like a rocket. The Coalition, because of Liberal Democrats’ fair tax policies, has seen a remarkable fall.

For that fall in inequality to come about because “the Tories chose to hit the poor” IS. NOT. POSSIBLE.

Remember Labour’s COMPLICITY in the Great Crash of the Twenty-Nothings. It wasn’t ALL down to a few “rogue bankers”. I’ve written before of how Labour’s “borrow and spend” economic policy buoyed the bubble, how their “let the good times roll (on tick)” philosophy cheered on many millions of small borrowers to risk more than they could afford on the (fictitious) promise of a never-ending supply of cheap money lent from China – how often did Gordon Brown say “no more boom and bust”? What did he think he was encouraging people to do?

Remember how Labour were taking bungs and favours from everyone from Bernie Eccleston to Rupert Murdoch. They were deeply entwined with the really filthy rich.

Remember the facts of what Labour really DID, not the fairy story of good times that they want you to believe in.

Labour, even when they nationalised a bank or two, were only ever socialist by accident; we have achieved this by design.

In this crash (which, whatever the causes, you have to admit happened on Labour’s watch) everyone has done worse. But Liberal Democrat choices have made good on the Chancellor’s promises of being “all in this together”.

And that’s important to us because we CARE about a Fairer Society as well as a Stronger Economy.

The impression from his article is that Mr Clarke appears not to care that Labour never really cared at all.

"…so when the truth finally outs, what will be the response?"

Practically an admission there that he doesn't know that either. So he’s just making that answer up too. Not necessarily an unreasonable prognostication – Mr Drunken Swerve has form – but still not in fact fact.

The 2013/14 data – when it comes out next year – may (or may not!) undermine the Chancellor's current statement, but at least Mater Gideon is basing his words on the facts as they are known now. Mr Clarke and the Graun are not.

And the confirmation bias of 450 below the line CiFers nodding and saying “he’s right you know” does not count as supporting evidence.

Mr Clarke touches their G (for Grauniad) spot again by referring to the 2008 crash as “Lehman Brothers' implosion” pinning the blame on the bank and definitely not the profligacy of any governments that might have supposedly had oversight of the economy at the time.

And again we have the lazy accusation against the Coalition of “a government that has lurched to the right”.

Then there is this:

"This week's data only takes us up to this point, the financial year that began in April 2012"

This is such a weirdly constructed sentence that I have to wonder if it's deliberate. If you are talking about the point that the data takes us to, then surely it only makes sense to talk about the *end* of that Financial Year, so April 2013.

By using 2012 (whether by accident or design) it conveys the impression that the data is even more out of date and only covers maybe a year or so when the Coalition were in charge, rather than 60% of the current Parliament.

If you are going to criticize the use of statistics by others, then you must take the greatest care that no distortion creeps into your own version – that he has failed to do so critically undermines his argument.

I realize Mr Clarke has a book to sell – it’s actually advertised right there in the article (or “advertising feature” as these things used to be called) and "oops I have no evidence" doesn't help with that, but really this is just hiding from the facts.

Inequality has fallen. This is not because the Tories chose to hit the poor. It’s because the Liberal Democrats chose to defend the poorest-off where we could and to raise fair taxes from the rich.

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