Revealing Demos document

Demos, the leftist think-tank associated with Tony Blair's "Third Way", has published a pamphlet, "The Crisis of Social Democracy", by Peter Kellner, the president of YouGov.

Social democracy, as we have come to understand it, has become unaffordable. . . By “social democracy” I mean the doctrine that a contented society is not merely a rich society, but that public purpose is as important as private profit and that the government has a duty to pass laws, levy taxes and provide money and services to protect people from the insecurities and depredations inherent in a market economy. . . Unlike liberalism, social democracy believes that a strong state is needed to make life better for everyone, and that liberty and localism alone will not lead us to utopia. Unlike conventional socialism, it asserts that a properly functioning market economy is the best way to generate the money needed to finance our social ambitions.

National income is almost four times higher than in 1953-54. So we could afford to quadruple health, education and welfare spending without these services adding to the tax burden as a percentage of GDP. But spending has risen faster than that, so the burden has increased, from 11 per cent of GDP in 1953-54 to 28 per cent this year. And it is worth noting that, whatever we like to think about the Thatcher/Major years, “social democracy spending” grew by 75 per cent in real terms between 1979 and 1997, and rose from 20 per cent of GDP to 23 per cent.

Kellner asks, "How can social democracy continue to fight for the collective good, for social justice and for a view of human well-being that includes but goes beyond material wealth, in an era in which the spending train has hit the buffers?" He has six proposals:

1. Transfer payments: reduce universalism (apply means testing).
2. Public services: use co-payments to increase the cash available.
3. Services delivery: distinguish between objectives (what services and support should be provided and to whom) and methods (who should deliver those services) - what I have called a switch from order command to mission command.
4. Housing: double the council tax on Band H homes, halve the tax on Band A homes and alter the intermediate rates accordingly; levy capital gains tax on sales of homes and use the money to build more social housing.
5. Employment: create a National Jobs Service.
6. Equality: this is not just about money; it is also about culture, health, clean air, attractive public spaces, decent housing, good schools, healthy eating, access to new skills and freedom from fear of crime.

1 to 3 are sensible; but 4, apart from the capital gains suggestion, is incoherent and ignorant. Raising council tax on more expensive homes will simply make their catchment areas more exclusive; and those councils will not be building "social housing". Plus "social housing" offers local councillors an opportunity for corrupt favouritism that rivals the awarding of planning permission.

The National Jobs Service would dwarf all previous bureaucracies, would run directly counter to point 3, and would vastly expand the boundaries of state parasitism. The extension of the "equality" agenda simply makes obvious what it has always been: totalitarian social engineering.

And this is supposed to be the centre left?