Leading article

François Hollande's France is a preview of Ed Miliband's Britain. And it's terrifying

The Labour leader has stopped talking about his French counterpart. But he's still in love with dirigisme

5 April 2014

9:00 AM

5 April 2014

9:00 AM

François Hollande and Ed Miliband could be political blood brothers. Neither has held down a job outside politics for any serious length of time. Both have been political bag carriers, graduating to apparatchiks. Both have tried to compensate for their essential blandness by adopting radical left-wing policies. Both now pose as socialists, and tout genuinely big (if dangerous) ideas about capital, labour and society. The biggest difference between them is that Hollande won an election, and has been able to put his politics into practice.

So we can look to France to see the kind of future which may await Britain if, as the pollsters and bookmakers believe, Miliband is just over a year away from 10 Downing Street. It is frightening. Hollande’s presidency has been an unalloyed disaster; French unemployment is now over 10 per cent; among the young it is 24 per cent. His war on wealth creators has led to a collapse of foreign investment into the country — it has more than halved in the two years since he came into office. In the same period, it has trebled in Germany. While most countries in the eurozone think the worst is behind them, France fears that the worst is yet to come.

Hollande cannot be faulted for being serious about doctrine. He wanted to impose a 75 per cent rate of tax on the richest, and when the courts struck that down he imposed it on the employers instead. Rather than leading to a flood of revenue, it has put up a ‘keep out’ sign above France for anyone serious about starting a business. Success is penalised. Miliband’s proposed 52 per cent tax would do precisely the same.

Meanwhile, George Osborne is squeezing the richest better than anyone: the best-paid 1 per cent now contribute 30 per cent of all income tax collected, the highest share in history. The Conservative party’s secret? It cut the top rate of tax. France’s minimum wage is far more generous than Britain’s, but this has turned out to be a conspiracy of those in work against those who have never had it. This is why unemployment is so high among youths and immigrants (leading to the kind of despair seen, from time to time, in riots in the Paris banlieues). It has become common, when a French firm thinks of expanding, for the discussion to turn to how they can do so while taking on as few people as possible.

The recent local elections in France were a disaster for Hollande’s socialists, as they lost control 155 towns, including former strongholds such as Limoges and Toulouse. Just like François Mitterrand before him, Hollande is tearing up his left-wing agenda. Just as Mitterrand became a quintessential fiscal conservative, Hollande is veering to the right — having appointed a self-described Blairite, Manuel Valls, as Prime Minister and asked him to form a ‘government of combat’. Hollande has, in other words, been mugged by reality. ‘How can we run a country if entrepreneurs don’t hire?’ he asked recently. ‘And how can we redistribute if there’s no wealth?’

Indeed. Hollande now talks grandly about his ‘responsibility pact’ with French business, whereby he cuts taxes in return for them taking on workers. It is not working. This is what George Osborne has been doing: since entering office, corporation tax has fallen from 28 to 21 per cent. Employment has soared to an all-time high (defying the predictions of Ed Balls, who said hopes of such a jobs surge was a ‘fantasy’). Osborne did not frame this as a ‘pact’ and did not ask businesses to agree to create 1,000 jobs a day. He knew — as all conservatives know — that if you cut taxes, prosperity follows. It’s a formula that works everywhere it’s been tried.

Once, Miliband openly compared himself to Hollande and paid homage to him in Paris. He is less keen to do so now, but not because of any ideological falling out. Rather, Miliband has developed his own Hollande-style agenda and proposes to govern by issuing edicts to companies, telling energy firms what they should charge their customers and threatening similar orders to those he regards as ‘predators’. He has a very advanced and detailed business strategy — but seems to lack the support of a single prominent business leader. They sense the same happening in Britain as in France: a stick shaken at employers followed by a hiring freeze, mass unemployment and a fresh fiscal crisis.

Osborne has positioned himself as Europe’s leading fiscal conservative — which is a bit of a push, given the glacial pace of his own fiscal consolidation. But the tax cuts he has implemented, for businesses and workers, have seen employment figures rise in a way that Hollande can only dream about. Had Osborne made faster progress, the British economy would be doing better still.

Hollande was elected on the slogan ‘another way is possible’. But France has found out the hard way that, as Margaret Thatcher said, there is no alternative. If a government has grown out of all proportion to its usefulness, it must be cut back. No country has ever taxed its way into prosperity.

So the lesson could not be clearer: if Miliband wins the election, and implements his dirigiste agenda, Britain will be plunged into precisely the same crisis which now engulfs France. The stakes at the next election are terrifyingly high.

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  • Graeme S

    Is this the best that Europe can offer … really !! No wonder Putin is laughing his head off. I really could weep

  • Kitty MLB

    Indeed in the beginning Miliband became very excited when Hollande won the election.
    Both of them were going to build a new socialist Europe and Hollande, in
    Miliband’s eyes was going to show us how wrong our choices were -Whoops!
    That man won the Frances election based on demonising Sarkozy,
    saying these cuts were not necessary, the rich should pay the most – Blah Blah Blah!
    A total disaster, businesses have left France, I understand the prime minister and others have resigned this week, he is weak, makes the wrong choices, attacks
    wealth creators and is basically one of the worst and most unpopular leaders in decades.
    And he is playing right into the hands of Marine Le pen.
    No wonder Milipede doesn’t mention his old friend Hollande anymore.

    • manonthebus

      No need to repeat the article.

      • Kitty MLB

        I could not read the article, only a few lines because
        it says I have reached my limit of free articles.
        I just guessed what it was routhly about, and
        voiced my limited and humble opinion,
        apologies for repeating the article, I was not aware
        Of the actual article.

        • Jackthesmilingblack

          I get that all the time. Reached the limit on the first of the month. Gimme a break. Really mean-spirited of Spectator, depriving their No.1 Internet correspondent of raw data. Just for that I`m not going to spill the beans on MH370.
          Jack, the Japan Alps Brit

          • Jupiter

            If you switch to another browser, you get another 5 free articles.

    • No1important

      Thanks Kitty, likewise I can only read the first few lines and although not hard to deduce the hidden content I got to read your article instead. May e it’s a new game, every time we are faced with a hidden article we take turns in finishing it off.

  • David Prentice

    This is why unemployment is so high among youths and immigrants

    No. The resentful apathy of the youths in the banlieues isn’t caused by some politician’s rate of income tax. Their hatred stems from a barbaric religion with Middle Eastern roots that demands submission, conquest and blood from its adherents. The tidal wave of Muslim immigration into Europe’s democracies will be viewed by future generations as a folly of catastrophic proportion.

    • Gareth

      If there are any survivors

      • Terry Field

        You have not thought about the power of Peppa Pig.

  • beenzrgud

    France is going down the pan and little can be done to stop it. Any rescue attempts will be fiercely resisted by the French !

    • Mari

      Same thing is happening in USA due to liberal/democrats – any rescue attempts to save are fiercely resisted by …the liberal/democrats/Obama administration&Clintons!

  • Ricky Strong

    Sorry to those who have already seen this, but it is rather good.

    Suppose that, every day, ten men go out for beer and the bill for all ten comes to £100.
    If they paid their bill the way we pay our taxes, it would go something like this…

    * The first four men (the poorest) would pay nothing
    * The fifth would pay £1
    * The sixth would pay £3
    * The seventh would pay £7
    * The eighth would pay £12
    * The ninth would pay £18
    * The tenth man (the richest) would pay £59

    So, that’s what they decided to do.
    The ten men drank in the bar every day and seemed quite happy with the arrangement; until one day the owner threw them a problem.
    “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by £20.” Drinks for the ten now cost just £80.
    The group still wanted to pay their bill the way we pay our taxes.
    So the first four men were unaffected. They would still drink for free.
    But what about the other six men? The paying customers? How could they divide the £20 windfall so that everyone would get his fair share?
    They realised that £20 divided by six is £3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.
    So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

    * And so the fifth man, like the first four, now paid nothing (100% savings)
    * The sixth now paid £2 instead of £3 (33% savings)
    * The seventh now pay £5 instead of £7 (28% savings)
    * The eighth now paid £9 instead of £12 (25% savings)
    * The ninth now paid £14 instead of £18 (22% savings)
    * The tenth now paid £49 instead of £59 (16% savings)

    Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.
    “I only got a pound out of the £20,” declared the sixth man. He pointed to the tenth man, “But he got £10!”
    “Yeah, that’s right,” exclaimed the fifth man. “I only saved £1 as well.
    It’s unfair that he got ten times more than I!” “That’s true!!” shouted the seventh man. “Why should he get £10 back when I got only £2? The wealthy get all the breaks!”
    “Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!”
    The nine men surrounded the tenth and beat him up.
    The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they
    discovered something important. They didn’t have enough money between all of them for even half of the bill!
    And that is how our tax system works.

    The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just
    may not show up any more. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
    For those who understand, no explanation is needed.
    For those who do not understand, no explanation is possible

    Now who’s round is it ?

    • DavEd CamerBand

      I still don’t agree with him having to pay more than everyone else to begin with.

      We are conditioned to think it’s expected that the rich pay more, and if you ask the man in the street he will tell you its because “they can afford it”…..

      This is really what our tax structure comes down to. The people who don’t use the NHS, state schools, public transport etc pay the most for these services, whilst being demonised and vilified along the way.

      We should really be grateful that they put up with us. For example, the banks, they make up our second largest export after the services industry; Finance.

      We demonise and vilify them for their bonuses, but really its none of our business what they’re paid, and soon they will leave to more hospitable climates. We shouldn’t feel so angry with the banks, at least we are not in Spain or France where they don’t have any of the benefits of the banking system. We never complained when the banks made us money, now we complain when they lend as its “risky” and we complain when they don’t lend “evil”….. Kill the goose that laid the golden egg.

  • Arden Forester

    Funny how Hollande vigorously reimposed secular values on France over same-sex unions and now Marine Le Pen is doing same with banning halal/kosher food in schools. He said his views are good for France and she says her views are good for France. Poor France!

    • screendummie

      I didn’t know religion existed in France.

  • Frank

    It would be much more interesting here if Milibrain had a series of attractive mistresses. The French are so good at that kind of thing (even short fat lumpy French men), although why the French tax payers put up with it is another matter.

    • screendummie

      A better word to use is concubine.

  • screendummie

    So that’s how a mugging works across the pond.

  • Colonel Mustard

    What is quite funny about this is how all the usual Labour suspects, including the stalker telemachus, were close to an Obamania mass orgasm when Hollande won the election. Not so keen to be his groupies now. Tee-hee.

  • Rupert Behrmann

    Really doubt that Miliband voters know who Hollarde is. They will be voting to protect their benefits thats all. And will win 🙁

  • Anita Bellows

    Still higher GDP than UK. Disabled people are not hounded and sanctioned, unemployment is high but at least the figures are not manipulated, and the last time I looked, the government did not decide to make the poor poorer. What is terrifying me is what is happening in this country, where it is found justifiable to kick people who are already on the ground

    • robertsonjames

      French GDP is inflated because by convention it includes a large number of overseas territories but the UK’s excludes the comparable entities even though they are disproprionately wealthy (Bermuda, Guernsey, Jersey, IoM etc.).

      Worryingly, many economists also point to a second problem. Your naive belief that the figures in France “are not manipulated” tells us everything about your credulous Francophilia and instinctive distrust of Britain but it’s at odds with other evidence:


      • Anita Bellows

        Are you saying that French overseas territories are wealthy? Martinique, Guadeloupe, Réunion? Did you check unemployment figures there?

      • Terry Field

        France manipulates everything.
        It reports crime when it is solved.
        The reality is grim; decline is everywhere.
        But it is the same in Britain. It is all smoke and mirrors there as well

    • DavEd CamerBand

      I don’t know what you’re referring to, who has being metaphorically “kicked”? And by which policy?

    • Terry Field

      Everything you say is disconnected from the reality as experienced by those of us who live there. Britain has a more realistic political class at present. There are vast numbers of the very poor in France, and there are food-banks everywhere. I know; I work in one; The socialist paradise is a nightmare; as the French know, but they have no answers since they have been conditioned not to understand the world.

  • Chris Hobson

    Hollande is a great leader a true titan of Europe.

  • DavEd CamerBand

    Does the Spectator really think it has any political weight?

    Its readers are mostly staunch Tories, the enlightened among us; UKIP supporters. Neither of which are likely to vote for Labour. It really is a pointless article, nothing I haven’t read 1000 times before.

    We hear you. Its not us you should be educating.