Murphy uses first major economic speech to attack the effect of inequality on growth

Tonight, Jim Murphy made his first major speech on the economy since becoming leader of the Scottish Labour Party. Speaking at the David Hume Institute, Murphy made a strident attack on inequality of opportunity, claiming that the inability of many of Scotland’s brightest talents to realise their potential has the economy billions over the past 25 years – and that “inequality is now the single biggest issue in world politics.”

He highlighted the income disparity between the lowest and highest paid as cultivating a “generation of wasted opportunity”. He said:

“The number I have in my head when thinking about the unfairness in our economy is ten.

“Today the top ten per cent earn nearly ten times what the bottom ten per cent earn. And that has knocked nearly ten percentage points off economic growth over the last 25 years. The cost of that to Scotland is billions of pounds. That statistic comes not from me but the respected OECD. That’s a whole generation of wasted opportunity. 

“This distribution of resources is inefficient and unfair but more than that it harms our economy.”

Murphy has used this speech to tie more traditionally left wing language and ideas on economic inequality to the more centre ground concept of aspiration – a staple focus of the New Labour years. The gap between the wealthiest and the poorest has not been shifting, locking those form low-income backgrounds out of opportunities and stifling social mobility. This harms businesses, who are not able to capitalise on a wide-range of talent.

Murphy argued:

“The richest brains are sometimes locked behind the doors of the poorest homes.

“Many of the engineers, entrepreneurs and inventors of the future are growing up today in Pollok, Coatbridge and Craigmillar.

“They just don’t know it yet.

“It’s our job to make them realise their potential.

 “I want working class parents to have the chance to have middle class kids.

“For that to happen we need to radically change Scotland. That’s what I plan to do.”  

But the Scottish Labour leader also made clear that commitment to tackling poverty meant nothing without winning power, or having a coherent plan for economic growth:

“The most successful anti-poverty strategy isn’t good intentions or moral indignation but instead it’s a successful and growing economy. Simply redistributing income is not enough. We need a faster growing economy with greater productivity or the problem of inequality will simply grow.”