Henry Campbell-Bannerman said in 1903 as Liberal leader of the opposition: "To d

ispute free trade, after fifty years' experience of it, is like disputing the la
w of gravitation."
At the time he was railing against the Tories' colonial secretary Joseph Chamber
lain calling for protectionist tariffs.
The Conservatives have since learned from their mistakes regarding protectionism
- we are now proudly a free-trade and free-market party, carrying the torch of
classical Liberalism into the 21st century.
The Liberal Democrats seem to have forgotten these lessons they once so passiona
tely taught us, while Labour seem to be suffering from learning difficulties.
Take for example the 50p tax rate, introduced this month. One financial crisis i
s all it took for Labour to return to their old unfounded, disproved prejudices
regarding taxation.
Geoffrey Howe and Nigel Lawson's incremental reductions in the top rate of tax f
rom 83% in 1979 to 40% in 1988 cemented the growth of the British economy after
the Thatcher years (with a minor blip in the early '90s) and greatly increased t
he wealth of the nation.
Figures published in yesterday's Financial Times from the Institute of Fiscal St
udies (IFS) show how this new orthodoxy continued under Blair and, crucially, re
mained the most effective means of redistributing wealth.
The IFS contrasted Labour's taxation plans in the 1992 election under Neil Kinno
ck and John Smith with the actual results under Blair and Brown between 1997 and
2010.
As alarming then as it sounds now, Labour planned to impose a 50p tax rate for a
ll earnings above £36,375 - that's still only £56,000 in today's money. Yet by
their own figures, the poorest in society could only hope to gain an extra £2
a week.
By contrast, since 1997 the poorest two deciles of society have seen their incom
es rise by more than 10%. For the richest, their incomes have shrunk by around t
he same amount.
To dispute low taxation then, after thirty years' experience of it, is like disp
uting the shape of the earth.
But the first economic crisis Labour have had to deal with since the one they cr
eated in the '70s has exposed them for the flat-earthists they are. They simply
cannot learn from their mistakes or, it seems, their successes.
As a small aside, the Financial Times claimed on the same page that levels of di
sposable income have greatly declined under Labour. According to the report,

The slowdown in household income has come as the population has increased fairly
rapidly, but also as wages and salaries have been stagnant in spite of big rise
s in profits at companies.

Could this slowdown be a consequence of the minimum wage? After all, if firms ha
ve to pay their employees more, they are going to employ less of them. This incr
eases unemployment (and with it, benefit payments) while those who are in work a
re heaped with greater and greater responsibilities - most likely less productiv
ely because of the stress they are under.
Businesses, refusing to see their profits shrink, come under pressure to compens
ate for this through further firing, slave-driving and generally treating their
staff badly, perpetuating the cycle.
The minimum wage may go up every year, but it would not surprise me if the £5.8
0 received today is worth less in real terms than the £3 workers would have rec
eived before 1997.