There were three news stories this week which might at first appear to be unrelated. The government announced that its forthcoming Work and Families Bill will give new fathers the right to take six months’ unpaid paternity leave. The BBC demanded that its licence fee rise at 2.3 per cent above inflation over the next eight years, perhaps taking it to £200. And Mervyn King, the Governor of the Bank of England, warned that the economy is heading for a bout of the 1970s disease: low growth and higher inflation.
But of course there is a link between these three things. While the Chancellor of the Exchequer will inevitably blame the growing malaise in the economy on hurricanes, Opec, anything but himself, the fact is that economic growth is being suppressed by unnecessary costs on business and by a huge transfer of wealth from the private to the public sector, where productivity is much lower. However much Mr Brown likes to claim the credit for 13 years of uninterrupted growth, it is becoming clear that the stability of the past decade has happened in spite of rather than because of government policy. It is just fortunate that steady deflation in imported goods, especially from China, has so far managed to counter the highly inflationary and growth-suppressing effect of Labour’s social and economic policy. With the prices of Chinese imports no longer falling so quickly, however, the true cost of an interventionist government is becoming impossible to ignore.
The new right to paternity leave is all too typical of the government’s remoteness from real, wealth-creating businesses. It is one thing for the Treasury to lose an employee to Pampers duty for six months; the Civil Service, which Mr Brown last year promised to shrink but so far has failed to do, carries so much over-capacity that no one would notice if a young battleship-playing employee was one day missing from the office in body as well as in mind. But what about a small business which, just after landing a large contract, loses one of its most important employees? The government has already granted women the right to a full year’s maternity leave, with devastating effect on small businesses. Not only do working mothers have the right to return to work following a year off with their babies; they now have the right to return exactly to their old job.
The rights enjoyed by new parents are so blatantly unfair that it is only a matter of time before the gay and lesbian lobbies start moaning that paternity leave discriminates against them and demand the right to six months off to attend to a new pet. One thing is for sure: the government is not introducing paternity leave for the benefit of babies; if ministers really believed that young children benefit from the presence of their parents, they wouldn’t spend so much effort trying to persuade mothers of pre-school-age children back into work. The real motive behind paternity leave is to try to impose career breaks on men in order to compensate for and assist the general campaign to drive women out to work — a scheme which went badly wrong this week when Patricia Hewitt was forced to admit that as trade secretary she broke the laws on sex discrimination by favouring a woman for a post on the South West Regional Development Agency over a better-qualified man. Needless to say, the taxpayer will have to pick up Ms Hewitt’s £17,967 legal bill. For a small company entrapped by a discrimination case, on the other hand, such a bill could mean ruin.
The ever-increasing BBC licence fee, too, is a symptom of the nullifying effect of Labour policy on the economy. Since 1997 Gordon Brown has added more than 800,000 employees to the public payroll; their salaries and pensions almost all paid for through taxes. It amounts to a huge transfer of resources from real businesses which make real profits to bloated state monoliths like the BBC which, being remote from market forces, have little interest in reining in their costs. Throughout Gordon Brown’s time as Chancellor, public sector inflation — which reflects productivity in the state sector — has stubbornly risen by between 6 and 7 per cent.
If Britain were a plc and the BBC its broadcasting department, CEO Brown would pulverise the BBC’s director-general, Mark Thompson. Why are you paying disc jockeys £1 million a year when there are few competitors wanting to poach them in any case? Get people to watch BBC4 or it gets closed down by January, OK? Of course, none of this will get said; the government will meekly sign the cheque and the BBC will carry on saying, ‘What’s everyone moaning about? The licence fee is only £2.50 a week, and you can’t even get a pint of beer for that these days.’
That’s not the point. The point is that the BBC, in common with the rest of the public sector, is growing parasitically on the healthy parts of the economy. Gordon Brown is acting as a disease on business, whose symptoms it is becoming impossible to overlook.
Comments