Miliband’s ‘responsible capitalism’ requires deregulation

Despite yesterday’s gloomy unemployment figures there is, it turns out, good news for the government buried in current labour patterns: the total number of hours worked in the last three months has risen by three million. The bad news is that employers are currently filling this demand by getting current employees to work longer hours (average weekly hours over this time period rose by 0.3 to 31.5), rather than taking on new workers. Presumably this is because it is so much cheaper, and less risky, to do so.
 
This should come as an encouragement to the government, as they search for ways to bring about growth. Scrapping or regionalising the minimum wage; exempting small businesses from various regulations; making it easier to dismiss people; and streamlining maternity provisions — all have been proposed as ways of reducing both costs and the risks to businesses of employing people. A proper package of measures along these lines would go a fair way towards unleashing the capacity within the private sector to expand even more rapidly.
 
Ed Miliband has again called today for ‘responsible capitalism’ a sentiment surely no one can disagree with. But, if ‘responsible capitalism’ means anything it must surely mean giving people opportunities — including the opportunity to find a job without facing prejudice because of lack of qualifications, a poor work history, one’s gender or age. Regulation shuts down these opportunities. It is time Miliband realised that. 
 
The will to deregulate is in some ways a defining aspect of the Conservative Party at the moment, with Labour advocating more regulation and the Liberal Democrats seemingly split on the issue. They should press forward as much as they can, however difficult the struggle. There are now several initiatives and reviews within different areas of government, and many backbenchers doggedly working to help. Hopefully, the detail of yesterday’s figures will renew the government’s the determination to see it through.

Ruth Porter is communications director at the Institute of Economic Affairs.