Inequality: What Can Be Done?

Anthony Atkinson’s book on inequality was high up on this year’s summer reading list for policy geeks with very good reason. It shows us what can be done. Often books by academics are great on detail and analysis with lots of graphs and tables. This is too technical to gain widespread readership and often leaves the reader in despair feeling that nothing can change. This book is very different: understandable for the non-economist but still full of detail and information and with a clear programme for change
The book is full of references to the importance of trade unions and highlights our crucial historical role in redressing the imbalance of power. Atkinson’s programme calls for changes to trade union laws to ensure unions can continue to do this. Maybe that’s why the government is so keen to reduce our effectiveness with the opposite: even more restrictive anti-trade union laws. The book also looks at the wider role of trade unions in bringing expertise to the development and implementation of public policy in particular through a role on his proposed Social and Economic Council. Among his ideas for reducing inequality through the tax system is a progressive property tax: something that UNISON has been campaigning for to replace the council tax for some time.

The book is in three sections:
Diagnosis
Proposals for action
Can it be done?

The 15 Proposals– What can be done?

Proposal 1: The direction of technological change should be an explicit concern of policy-makers, encouraging innovation in a form that increases the employability of workers and emphasises the human dimension of service provision.
Proposal 2: Public policy should aim at a proper balance of power among stakeholders, and to this end should
(a) introduce an explicitly distributional dimension into competition policy;
(b) ensure a legal framework that allows trade unions to represent workers on level terms; and
(c) establish, where it does not already exist, a Social and Economic Council involving the social partners and other nongovernmental bodies.
Proposal 3: The government should adopt an explicit target for preventing and reducing unemployment and underpin this ambition by offering guaranteed public employment at the minimum wage to those who seek it.
Proposal 4: There should be a national pay policy, consisting of two elements: a statutory minimum wage set at a living wage, and a code of practice for pay above the minimum, agreed as part of a “national conversation” involving the Social and Economic Council.
Proposal 5: The government should offer via national savings bonds a guaranteed positive real rate of interest on savings, with a maximum holding per person.
Proposal 6: There should be a capital endowment (minimum inheritance) paid to all at adulthood.
Proposal 7: A public Investment Authority should be created, operating a sovereign wealth fund with the aim of building up the net worth of the state by holding investments in companies and in property.
Proposal 8: We should return to a more progressive rate structure for the personal income tax, with marginal rates of tax increasing by ranges of taxable income, up to a top rate of 65 per cent, accompanied by a broadening of the tax base.
Proposal 9: The government should introduce into the personal income tax an Earned Income Discount, limited to the first band of earnings.
Proposal 10: Receipts of inheritance and gifts inter vivos should be taxed under a progressive lifetime capital receipts tax.
Proposal 11: There should be a proportional, or progressive, property tax based on up-to-date property assessments.
Proposal 12: Child Benefit should be paid for all children at a substantial rate and should be taxed as income.
Proposal 13: A participation income should be introduced at a national level, complementing existing social protection, with the prospect of an EU-wide child basic income.
Proposal 14 (alternative to 13): There should be a renewal of social insurance, raising the level of benefits and extending their coverage.
Proposal 15: Rich countries should raise their target for Official Development Assistance to 1 per cent of Gross National Income.

It really great to see a detailed programme to reduce inequality particularly one that recognises the both the previous successes of unions and that we are central to delivering more change. All we need to now is ORGANISE....