Natasha Irons, the Labour MP for Croydon East, said she was âproudâ that the government was âputting passengers before profitâ by bringing railway companies into public ownership.
It was a revealing moment in PMQs this week, because it was so unremarkable. A Labour MP sloganised meaninglessly about âprofitâ being the enemy of customer service and no one noticed.
Keir Starmer replied that he too was âproudâ that her constituents are travelling on rail services that are now âback in public ownershipâ, and no one batted an eyelid.
The PM assumed that everyone agrees that public ownership is better than a competitive market because that is what the voters think, according to superficial opinion polls.
Worse, he boasted that some of Ironsâs constituents were âbenefiting from the first freeze in rail fares for 30 yearsâ. If he had said that rail travellers, who tend to be better off, are being subsidised even more by taxpayers, who are on average poorer than they are, the cheers of Labour MPs might have been less noisy.
But no, the surrender to magic money-tree economics is so complete that it passed without comment. No one rose to demand, âDid the old Clause IV die in vain?â No one asked if Tony Blair had gone to all that trouble to expunge the commitment to the âcommon ownership of the means of production, distribution and exchangeâ from Labourâs constitution for nothing.
Labourâs reflex hostility to profit is back, and it is one of the underlying causes of the governmentâs failure. Starmer and Rachel Reeves presented themselves as pro-business, but they didnât mean it. Not really, deep down. They had not done the hard thinking in opposition that Blair forced the party to do by rewriting Clause IV, setting out the partyâs âaims and valuesâ in its constitution, to understand what a âdynamic economyâ involved.
So when they had to choose which taxes to put up, they went for taxes that burdened businesses, stifling wealth creation and employment.
Now here comes Andy Burnham, offering to go through the whole sorry cycle all over again. He too says he is pro-business, and the skyscrapers of boomtown central Manchester give us some confidence that he might mean it.
He says Reevesâs rise in employersâ national insurance contributions âwasnât the right decisionâ and he wants to âreconsiderâ it. Yesterday he told the Telegraph that he would âlook againâ at the inheritance tax rise on farmers.
But this admission of error was not accompanied by a return to economic realism. Far from it. It was part of a cynical vote-buying exercise: a promise of a 20 per cent cut in business rates on pubs. Never mind that it is unusual for a by-election candidate to make a formal announcement of a policy they would implement if they were prime minister, just ask: where is the money coming from?
In the case of the tax cut for pubs, Burnham went through the motions of being a serious candidate for government by saying it would be paid for by higher taxes on online giants such as Amazon and by cracking down on tax evasion. So, he proposes a 20 per cent cut in business rates for pubs instead of the 15 per cent cut announced by Reeves for next April, paid for by a combination of the unworkable and the imaginary.
As for employersâ national insurance and farmers, it is all âlook atâ, ârevisitâ and âconsiderâ, with a wave of the hand in the general direction of the money tree. But renationalising Thames Water, also mentioned yesterday, seemed to be a firm promise. For the water industry as a whole, âpublic ownership is absolutely an option,â he said. But âfor Thames Water, that is what should be doneâ.
As with the railways, public opinion is on his side â at the level of pop-quiz poll questions. But as Blair once explained, there is a difference between a three-second answer, a 30-second answer and a three-minute answer. People tend to say yes to any question about public ownership, but if the question includes the costs of nationalisation, the history of public-sector under-investment and whether ministersâ energy should be devoted to the complex legislation needed, the answers become less certain.
Nationalisation ought to be a pragmatic question â âthe market where possible, the state where necessaryâ, as the German social democrats realised 67 years ago â but for too many in the Labour Party, it remains an article of faith 31 years after Blairâs teachable moment.
For Burnham, it betrays an instinct of hostility to profit, and an attachment to fantasy economics that augurs nothing good. Burnhamâs alleged closeness to Ed Miliband, whose economically illiterate energy policy is one of the governmentâs more serious failings, is the opposite of reassuring.
It means Burnham may be able to put a happier and less sanctimonious face on Starmer and Reevesâs policies, but he is likely to make the actual policies worse.