The Spectator

Paternity madness

It is becoming clear that the stability of the past decade has happened in spite of rather than because of government policy

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.

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