22 JUNE 1974, Page 1

Soaking the poor!

The Chancellor of the Exchequer, at the highest point so far in a career marked more by intellectual pretension than performance or plausibility, has in recent days reaffirmed more than once his intention, announced long ago at a party conference, of soaking the rich in the interests of Labour's social objectives, proba bly by means of taxes foreshadowed in his first Budget, but as to their character and real impact as yet shadowy. What needs to be said as often as possible, and with as much force as possible, between now and Mr Healey's second Budget, is not merely that the destruction of the wealth of the country by the denial of rewards to the most able and energetic frustrates every serious attempt to finance social amelioration, but that the facts upon which the Chancellor and his collaborators in bringing about Britain's financial ruin and social destruction — the Labour Party — base their analysis are wrong.

It is a cardinal tenet of socialism that equality in every sphere, including the social, can be achieved by the taking of resources into public —that is, not public, but bureaucratic — ownership, and the redistribution of income, for so long as the Labour Party remains a democratic parliamentary party on the British model — that is, for so long as it resists the extremism of Allende-type anarchism, which may not be long if Mr Benn has his way — the penality of any tax system designed to achieve income redistribution will be related to a view of how much inequality actually exists. For calculating inequality Labour policy makers have continually used statistics provided by the Inland Revenue, even though the Revenue Inspectors have continually warned us how improper it is so to use these figures. As a new research monograph How Much Inequality? from the Institute of Economic Affairs — a body always eminent, sometimes wrong, but never far from accurate on these matters — this week demonstrates, the cardinal statistic on which Labour propaganda is based — that ten per cent of the population own seventy per cent of the wealth — is almost wholly false. Indeed, as the authors, Messrs George Polanyi and John B. Wood, argue, "What may lie behind the reluctance to acknowledge the evidence about the dispersal of wealth we see all around us could therefore be the need to sustain the Marxist thesis that under capitalism the workers must become progressively more impoverished."

The IEA advance tentatively a thesis we would state much more strongly. So blind has Labour Party consistently been to challenge of seriously tackling poverty and deprivation through taxation policy that Mrs Hart, when a social service minister in the last government, went so far as to admit that, despite any conceivable juggling with Labour's preferred system of family allowances, several hundred thousand children would remain in poverty. Yet she refused even to consider examination of the reverse income tax system put forward by the Conservatives, just as Labour declined in advance to partake in the parliamentary investigation of such a system during the life of the last government, and just as Mrs Castle and Mr Healey in this parliament have made clear their intentions to destroy both Conservative pensions legislation and Conservative tax credit proposals, not because they do not work — they have scarcely been tried — but because they are Conservative. Blind with malice, envy and intellectual prejudice, Mr Healey will put anybody to the rack — the pensioner who has accumulated a nest-egg, the man with the corner shop, the worker striving to better himself and his family — and all those among others, like the one-parent family, will be the victims of his taxation policy — if he can serve his own notion of the tidiness of Marxism. Well and accurately did the Child Poverty Action Group — scarcely a Tory front organisation — say in 1970 that the poor had got poorer under Labour.

While Mr Healey soaks the lowly, Mr Benn sets about the destruction of British industry. As Mr Peter Wilsher has observed of his proposals for the state management of industry, the sorry body of the British Civil Service, not to mention the trade unions, are hardly likely to be able to replace the existing management of British industry, and run things more efficiently: yet Mr Berm too, blinded by a Wagnerian ambition to destroy What he does not agree with, sets about the implementation of his policy with a will. Of course the really rich can go elsewhere, or fight rearguard actions with some success against this madness. It is the middling sort of People, and the workers and their families, and the poor and the old, who are the stationary rctims who cannot escape. The question now is: how effectively, and in what strength, will a:Tory Party afraid to emasculate the Finance Bill in the House of Commons, step forward to the rescue of the victims?