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CHAPTER TWO

Reclaiming Labour’s Natural Constituency

The politics of the Thatcher governments are commented upon in a manner which suggests that they have made Labour irrelevant to a permanent majority of the electorate. This chapter examines why and how this has happened. It looks at the fiscal redistribution brought about by Mrs Thatcher which itself explains why a growing proportion of the population are living on low incomes. The extent of this success now offers radicals their opportunity to win. While significant in number, the poor are still very clearly a minority. The Thatcher governments persuaded many commentators (some didn’t need persuading) that the poor were a forgotten cause: ‘There are no votes there.’ If a more careful analysis of the distribution of income in the post-Thatcher age were to be carried out, a potentially larger grouping of voters would be found who could be mobilized by policies based on Labour’s traditional values. Such policies must be presented in a manner which appeals to the aspirations of these voters.

Tax Cuts Galore

Two trends in taxes have been evident since 1979, as the table opposite illustrates. Reduction in taxation is calculated by assuming that the 1978–79 tax regime has continued unmodified. From the level of taxation that this would have produced is deducted the current tax yields. The result shows the level of taxation has been cut in this current year by a simply astonishing total of £31.4 billion. We know that the rich gained most from these tax cuts, but the extent of their gains will surprise many.

Average reduction in income tax per individual in 1992–93 compared with the 1978–79 indexed regime

An Agenda for Britain

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