UK Labour Party leader Jeremy Corbyn has a brilliant idea to ‘fix’ the supposed income-inequality problem – impose a maximum limit on how much people can earn in Britain.
This proposal was immediately met by derision by economists and leaders as “incoherent,” “it doesn’t make any economic sense at all,” and “totally idiotic” – all of which are completely correct.
As The Telegraph reports, Corbyn told the BBC Radio 4 Today program, “If we want to live in a more egalitarian society and fund our public services, we cannot go on creating worse levels of inequality. I would like to see a maximum earnings limit quite honestly, because I think that would be a fairer thing to do.”
Mr. Corbyn refused to say at what level the cap should be set, although he later told Sky News it would be “somewhat higher” than the £138,000 he earns as an MP and Leader of the Opposition.
However, before we move on to the responses to this proposal, it turns out that the income gap between the richest and poorest people in Britain is at a 30-year low, new figures from the Office for National Statistics (ONS) show.
Disposable income for the poorest fifth of the population in Britain rose by £700, or 5.1%, last year according to the ONS while disposable income for the richest fifth fell by £1,000, or 1.9%.
But those are just facts. Corbyn’s plan has been branded “totally idiotic” by a former top economic adviser.
Academic Richard Murphy, who advised Mr Corbyn during his leadership bid, said the proposal was “incoherent.”
He told World At One: “It doesn’t make any economic sense at all. You cannot impose such a cap.”
“Jeremy needs to sit down and get some proper advice. Whoever is advising him now is not giving the right advice or Jeremy isn’t simply asking them before making these comments.”
Asked if the Government would consider taking up Jeremy Corbyn’s wage cap proposal, a spokesman for the Prime Minister has said: “It is not a policy we are pursuing.”
They added that they had “not seen the details of what is actually being proposed.”
Danny Blanchflower, a former member of the Bank of England’s monetary policy committee and a former member of Corbyn’s economic advisory committee, has taken to Twitter to describe the wage cap proposal as “totally idiotic” and a “lunatic idea.”