Where Red Ed goes, the Tories will follow

25 September 2013

That wrenching sound you can hear is the noise of the Tory columnists slamming their gears into reverse. Until yesterday, they had assured their readers that Ed Miliband was a useless, limp-wristed bleeding heart without the machismo to hack it as prime minister. He was weak. He was hopeless. He was toast. But that was then. This morning conservative journalists have been issuing their versions of “Ed Miliband: An apology” – as Private Eye likes to say.

Far from being a whey-faced wonk, he is now a red-in-tooth-and-claw, “socialist” (Toby Young in the Telegraph). Far from being a wimp, he is a terrifying “demagogue [who] wants to fuel tensions and the politics of envy” (Allister Heath, City AM) Far from being a loser, he could reach Downing Street (Max Hasting, the Mail) And so on, and on and on.

Not one Tory paper stops to ask where, for instance, Miliband might have got his idea that developers should face escalating fines to make them release land with permission for building – on pain of confiscation if they did not. Who could have inspired him to come up with a policy denounced as the “road to tyranny,” no less, by Iain Martin in the Telegraph​ ?

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Step forward that notorious revolutionary, Mr Nicholas Boles, the Conservative MP for Grantham and Stamford. In an article in the Financial Times in September 2011, he said, quite rightly in my view, that in an age of austerity governments should look for measures that would tackle social problems without adding to the state’s debts.

Chief among them, said Boles, was a Land Value Tax that already operates in New South Wales. Farmland and people’s main homes are exempt – so it does not strike at hard-pressed farmers or elderly people on low incomes living in houses that have become very valuable.

Instead, the tax bears down on vacant land, holiday homes, investment properties and commercial properties. If we were to implement it in the UK, it would need to be deductible from business rates so that struggling retailers and other firms were not faced with a devastating double whammy – and it might in time replace business rates altogether. Thus targeted, the tax would deter speculative land banks and would encourage property owners to develop brownfield sites and put rundown areas of inner cities back to good use. Over the longer term, it would lower the price of development land and help us get off that quintessentially British roller-coaster of house price booms and busts.

Boles is often described as an ally or intimate of David Cameron. If only that were true. The coalition did not pick up his idea. Its only response to the housing crisis is to use taxpayers’ money to pump up a property bubble – the very “roller-coaster” Boles denounced.

If this government is seen as a footnote in British history, it will be because it has failed to deal with the great questions facing the nation. Housing is a mere aperitif. The banks have not been broken up. They are still too big to fail and indeed too big to bail out. It has not tackled the Fabian public sector in which the manageriat enriches itself at public expense. All the talk from Michael Gove and his kind about extending choice hides the fact that there is still no democratic representation in services as diverse as the NHS and BBC. Most egregiously of all it has failed to respond to falling living standards. If you want to leap to the defence of the utilities, as so many on the right did this morning, you at least should be able to counter Miliband by making the case that they have not milked the consumer for their shareholders’ and managers’ private advantage, but charged reasonable prices and invested in new plant. This morning’s papers make no attempt to argue that their hard-pressed readers’ have been treated fairly, and their silence tells you all you need to know about the weakness of the argument from the right.

It is not as if Conservative writers are plutocrats who cannot understand the frustrations of people who dread a cold winter and count their pennies in Tesco. The Mail and this newspaper, in particular, have published fine pieces on the decline of the middle class, and how hard it is to find a decent home and a reasonable standard of living. It is just that their ideology makes them reject any solution that infringes market doctrines, which are clearly not working anymore. Thus when Miliband proposes modest, and doubtless inadequate, measures, they go wild.

I wonder if Conservatives and Liberal Democrat leaders will go berserk with them. Do they really want to end up on the same side as hedge funds hoarding land and the over-paid and unaccountable bosses of privatised utilities? That is not a “dividing line” I would like to cross if I were in their shoes. Do not be surprised if, within a few days, we have Cameron and Osborne coming up with a hasty programme of their own, and issuing statements that might have come from the pen of that “red-in-tooth-and-claw” revolutionary, who now leads the Labour Party

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  • mikewaller

    In the main a very good piece, but were it loses touch with reality is in proposing that the Tories follow Labour in promising to deal with “the standard of living crisis”. As Simon Hoggart pointed out in a brilliant TV series before the 1997 election called “The Hollow State”, it simply can’t be done. We of all countries are now stuck with a globalised economy, in which individual workers have to find their own salvation. If you or I cannot do the job to a high enough standard or a low enough price, there a millions of Chinese, Koreans, Indians, Brazilians etc etc who can. In view of this, what the electorate needs is a form of tough love which would take the form of telling them how it is and just how big a financial hole we are still in. Instead both sets of bozos seem intent on staging a re-run of a 1960s give-away strategy.

    • mightymark

      Oh there are plenty of ways the Tories can counter this that don’t involve going against what you are right to say is the incontrovertible logic of globalisation. For a start they could go to work on cutting taxation of energy and the environmental costs. They could then say this would enable retail costs to be kept down for longer than two years while warning about cost pressure build ups that would arise after Labour’s two years. If any of this sets them against the EU – well, that will help them against UKIP and maybe win them back the support lost to them as Spectator blogs so well testify.

      The tactical problem with Milibands idea is that it puts the future of how energy prices are dealt with for the next two years firmly in the hands of those – government and the industry – with every interest in undermining it. I suspect they will.

      • mikewaller

        I think your suggestions all good (nay, brilliant) short term stuff. The only problem is that it’s all tactical and focused on winning an election. As such it’s kicking the can down the road stuff. Either we are stuffed (as we most probably are) or we get the people to understand that we are facing a fight for survival that entails major enhancements of our productivity, both quantitatively and qualitatively, expecting far, far less from the State, and cutting back on carbon and waste in general (the miraculous solution!). This is all going to take a lot more than just outflanking Miliband.

        This morning, I spent some time talking to a cabinet maker of superlative skill who is about to go into semi-retirement. His plan had been to recruit somebody whose skills he could enhance with a view to maintaining a level of output that would make keeping his current premises going, economically viable. After trawling through candidates with seemingly strong academic backgrounds but no skill base and skilled people without the interpersonal skills to succeed in his high-end business, he has thrown in the towel. What this tells me is that something has gone terribly, terribly wrong and judging by their performance, the current crop of politicians of all stripes just have not got what it takes to do something about it. Barring some natural or humanity caused mega-disaster, the single fact that is going to dominate this century is the huge excess of productive capacity over the whole human race’s capacity to absorb its products. Against this background, the kind of governmental initiatives currently on the stocks have about as much potence as Nero’s fiddle in respect of Rome’s conflagration.

      • mightymark

        The Times headline on Saturday confirms the above – they are already at it.

  • Liberty

    What is called market failure is really a failure in local or central government legislation, attempts to fine tune taxes to achieve political objectives and inflation. Property decisions should be just business, not trying to second guess government decisions and maximize tax relief. In particular, after a crash and inflation a property owner will find that holding property is the best plan because it will keep rising in price, interest is low and requires little or no work, the cost of interest offsets the tax bill and requires little work. But developing it means taking on a lot of workers and all that entails, workplace legislation, etc. and risk. There are few buyers because unemployment is high, wages are depressed and firms are hanging on to their money for the same reasons. High taxes have to be paid [losses have to be born 100%, half profits go to the government].

    So, the best thing the government could do is to simplify legislation and taxes and reduce inflation. The government though has to inflate as the only way to bridge the deficit and pay off our massive debts, but one has to start somewhere.

  • chan chan

    I’d like to see the mobile phone industry nationalised, and placed under the control of a re-nationalised post office. Then we can all apply in writing for a beige or green Nokia 3210, and wait two years for it.

    It’ll be great…

    • Joshaw

      “beige or green”

      Really? Black bakelite, and no choice but to rent from the Post Office.

  • Tony Quintus

    No, he’s still a total wimp who has bent over for the extreme left of the party and the unions and spouted a raft of socialist garbage which is a world away from the policies which actually won Labour an election. At their conference the Tories are going to grind him into dust.

  • nickpeters

    The correct note from Blue Eyes that Miliband’s remedy differs from Boles’s illustrates the danger for Cameron. The diagnosis is correct over a range of issues – yes, the system is damaged in so many areas – but the Miliband prescription is completely wrong and dangerous. Cameron must begin to apply remedies that recognise property rights but nudge towards property responsibilities, that dismantle the cosy cartel-like deals that characterise so much of the state-business relationship and start to bloody govern in a way that protects the weak, muzzles the too-mighty and gives everyone else a fighting chance. Otherwise he – and we – are doomed.

  • andagain

    Chief among them, said Boles, was a Land Value Tax that already operates in New South Wales.

    A Land Value Tax is not at all the same thing as confiscating property with planning permission

    All the talk from Michael Gove and his kind about extending choice hides
    the fact that there is still no democratic representation in services
    as diverse as the NHS and BBC.

    Choice is about alternatives to something, not a vote in how it is run. I have a choice between Asda and Tesco, although I have no vote in how they are run.

    If you want to leap to the defence of the utilities, as so many on the right did this morning

    Are these evil energy companies also the people you want to spend untold billions building wind turbines?

    You can tell me the Tories are evil as long as you like, but as long as Labour are insane it will make no difference. If it is a choice between Chairman Mao and Generalissimo Franco, I have to go with the right-winger.

  • ArchiePonsonby

    You mean that the Tories will cancel HS2?

  • black11hawk

    Clause 29 of the Magna Carta:

    NO Freeman shall be taken or imprisoned, or be disseised of his freehold, or liberties, or free customs

    • BoiledCabbage

      Just you wait. Milliband will turn hard Left if he gets power – asset seizure – ‘a solidarity tax’ – will be used to fund his programme. Switzerland is SSE.

  • Blue Eyes

    Milivolt did not promise a land value tax, he promised to confiscate the land. Not *quite* the same policy.

  • Matthew Blott

    Wow, how did you get that past Fraser Nelson?

  • Allan D.

    Statutory prices & incomes policies, “fair” though they appeared to be at the time didn’t work any better under Ted Heath than they had under Harold Wilson or vice versa. Just because both (or all 3) parties believe in nonsense doesn’t prevent it from still being nonsense. As for a “cost-of-living” crisis let’s get back to the 25% inflation we had in the mid-1970s with the effect that had on those at the bottom of the pay scale and those on fixed incomes. That was a real cost-of-living crisis.

    In the meantime let’s not kid ourselves the government can cut prices at a stroke. It may have delivered an election victory for Ted Heath in 1970 but the promise soon turned out to be a hollow one. The same may well apply to Mr Miliband.

    • Alexsandr

      cutting fuel taxes would filter through to all prices because delivery is quite a large part of retails costs.

      • Allan D.

        Indeed and it was the Coalition that froze fuel duty which Miliband & labour opposed.

  • Peter Risdon

    This is the pity of it all: After a basically excellent criticism of the right for kneejerk objections to policy they’d accept from another source, and a good list of state failure, the reflexive, dogmatic non sequitur of alleged market failure renders it all pointless.

  • djkm

    When you’re used to believing the nonsense that comes from the mouths of the incumbents that ‘there is no alternative’, it’s unsurprising that being presented with something that could be considered a credible alternative will scare and confuse people.

    Saying that, Toby Young’s position is hardly surprising, and I wonder what Dan Hodges has to say on the matter? What *does* this mean for Ed Miliband?

    • Fergus Pickering

      What Dan Hodges has to say he says in today’s Telegraph. What I say is that this is your Trade Union pawn Millipede speaking.

      • djkm

        ‘Millipede’? How old are you – 12?

  • Kyle Harrison

    The market isn’t working? Govt regulations push up the price of energy. Abolish the green agenda and watch what happens to prices. State spending is at its highest in generations. What free market are you talking about? Idiot. The credit crisis was driven by the intervention of the Chinese state in the currency markets to devalue their currency creating huge global imbalances. The BofE and govt kept interest rates too low for too long. Fannie Mae and Freddie Mac. Govt is the cause of many of our current problems.

    • Terry Kinnard

      There is no, nor has there ever been nor will there ever be a free market! Those that advocate it are fools that don’t accept the truth of my first sentence. Before you are taken in by free-market neo-con economics read 23 things they don’t tell you about capitalism by Ha-Joon Chang.

      • Curnonsky

        Ha-Joon? Gesundheit!

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