WHEN will you bring back socialism?” Ed Miliband was asked on Saturday. “That’s what we’re doing, sir…” Miliband replied. “…democratic socialism. And what is that about? That is about a country that works for all and not just for some.”
Some might question Miliband’s understanding. As the economist Thomas Sowell once said: “Socialism… has a record of failure so blatant that only an intellectual [or perhaps the son of an intellectual] could ignore or evade it.” That’s why New Labour stole Tory clothes by backing a market economy. But the party couldn’t stop itself also creating a “regulatory” state, with people increasing entangled in its hand-outs, benefits and schemes.
Miliband does not propose a return to state ownership of the means of production. But the policies emerging from Labour’s conference are distinctly controlling and interventionist. There’s “bash the rich” populism and more regulation, with little regard for wealth creation and entrepreneurialism. There is no danger of anyone mentioning “personal responsibility” at Brighton.
Take the policies we know about. Labour would re-introduce the 10p tax rate by implementing a mansion tax – a punitive charge on the few to fund a £2 a week tax cut for the many. Raising the personal allowance further would be a better way of helping those on low incomes, but Labour objects to taking people “out of the system”. Everyone should do their bit, it seems, even if this means just taxing people to give them their own money back.
Miliband also comes bearing “free stuff”. Parents of three and four-year olds in England would get 10 extra hours “free” childcare per week, funded by the ever-available bank levy. Goodness knows how many times that has already been spent. The policy will dovetail with Labour wanting primary schools to provide childcare from 8am to 6pm. It seems that primary schools aren’t for teaching, but the semi-nationalisation of children (an approach shared by some in the coalition, as shown by last week’s announcement on free school meals). So-called “wrap-around” childcare will deal another blow to home child-minders, whose numbers have already been halved due to New Labour’s oppressive regulations.
Then Miliband wants to “strengthen” the minimum wage – beefing up bureaucrats to crack down on non-compliers, and potentially to set different wages for different sectors (presumably allowing some “experts” to decide how much is “fair” to pay in each sector). Regional effects, and the barriers to entry this will create for new firms, would be ignored. He also wants more government interference in business decisions by forcing any firm hiring a worker on a visa from outside the EU to also hire an apprentice. This will lead to more apprenticeships, we are told. But we’re also told it would deter immigration. Few seem to notice that achieving one of these goals would mean worse achievement of the other.
Miliband is not offering overt socialism, but stealth steps on the socialist path. Punitive taxation. More state-provided benefits and schemes. More paternalistic control of children. More intrusion into companies and industries. As US vice-presidential candidate Paul Ryan said last year, it’s “a dull, adventureless journey – from one entitlement to the next. A government planned life. A country where everything is free but us”.
Ryan Bourne is head of economic research at the Centre for Policy Studies. @RyanCPS