Jeremy Corbyn will indicate in a speech to the Fabian Society today that if he becomes our Prime Minister in 2020 the Government will impose “pay ratios” between those at the top and those at the bottom of a company’s pay scale in order to “institutionalise fairness.”

“Too much of the proceeds of growth have accumulated to those at the top,” he will say.

Some Conservatives have conceded a lot of ground in the argument about inequality. Boris Johnson lamented last summer:

“I do worry that we have more billionaires in London than any other city. We had 80 last year and we have 140 this year and they go billionairing around the place…”

By contrast Sadiq Khan, who seeks to succeed Boris as Mayor of London in May, told The Spectator recently:

“I welcome the fact that we have got 140-plus billionaires in London; that’s a good thing. I welcome the fact that there are more than 400,000 millionaires; that’s a good thing.”

The truth is that most workers are more concerned about their standard of living in absolute rather than relative terms. If their pay doubled from £10 an hour to £20 an hour they would welcome it – even if their boss found his annual earnings treble from £1 million a year to £3 million.

The difficulty is that many people think of the amount of wealth being fixed. Thus, for example, they imagine that if profits were abolished – for instance through price controls or nationalisation – that would allow prices to fall. Or that more tax revenue can be achieved, without difficulty, by increasing the tax rates on the rich. Or that rent controls would be a harmless way of reducing rents.

It is right for Conservatives to engage in these arguments – which we thought we had won in the 1970s – Dan Hannan did so his week with his excellent video message on this site about the profit motive. Part of our difficulty in making the case is the widespread confusion between free market capitalism and corporatism: the notion that capitalism means bail-outs for bankers, corporate welfare and assorted state subsidies for the rich and protecting fat cats from competition.

But ultimately the Conservatives will never convince the electorate that we are more hostile to the rich than the Labour Party is – despite Mark Wallace’s analysis yesterday of Corbynista poshness. Nor should we try. Our message which is both true and more politically plausible should be that we want everyone to be rich. That we are the Party of leveling up, not dreary resentful leveling down.

The contrast in approach was seen this week. On Wednesday at Prime Minister Question Time there was a debate about sink estates. David Cameron wants to get rid of them. He wants to knock down the tower blocks to allow people to escape poverty. Jeremy Corbyn didn’t sound at all keen on the idea. This followed a long speech from Cameron about poverty on Monday which also included other policies. The boost to the Troubled Families programme is very welcome. So is the PM’s ambition for far more children languishing in care to be placed for adoption and thus have a chance of a permanent loving home.

While Labour’s focus is on punishing the rich the Conservatives are directing their energy into the eradication of poverty.



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