Why so much noise about so little? Why is Ed Balls bellowing, teaching unions wailing and Lib Dem rebels moaning about a bill that does nothing much at all? Like a child with a nightmare the left has worked itself up into a terrible agitation about the academies bill, although the measure has hardly more substance than an imagined ghost under the bed.

Michael Gove's law, which will finish its parliamentary stages today, concedes no new powers of any importance. It makes no difference to present rules on funding or selection. It compels nothing. The bill merely tweaks control over the curriculum and greatly accelerates the process by which good schools can transfer to a status that already exists. This is incremental legislation: reform by photocopy; a Xeroxed repeat in darker print of the plan that the last government worked towards – and that its wiser members, in the Lords, still support.

Free schools, started by parents? They can create them already if they really try. Selection? Banned before, banned now – unless your school is one of those grammars that no one dares abolish. Primaries to become academies? The 2002 act allowed that. Taking academy status without consulting parents and pupils? That can happen under Labour's legislation. Outside sponsorship? The prospects were fading already; Gove is recognising reality by dropping the requirement for successful schools.

English secondary education has undergone more reconstruction than the M1, endless diversions around selection, comprehensives, localism, centralism, and a bit of everything – which is where we are now. This bill introduces no new brand of school; no extra cash; no anything, really, except the extension of what we already have, which was anyway the aim of the last government when Tony Blair promised "every school an independent school". That was before it became inconvenient for Labour to take the side of consumers over providers.

In the Lords, Andrew Adonis, who created academies, and still supports them (and who was an education minister under Gordon Brown) cavilled at some aspects of Gove's new bill; but the flavour of his opposition is illustrated by one of his worries: that Gove's free schools should be called academies, too. And in fact it seems they will.

No wonder – given the meagreness of substance – that objectors have turned questions of process, complaining at the speed with which the legislation has been introduced and – today – will be passed. They omit to mention that in 1997 Labour abolished assisted places with equal haste and used the same parliamentary contrivance, a committee debate on the floor of the Commons.

The bill is indeed being rushed through for effect. But Labour can't see the trick. The rush hides not the enormity but the thinness of the measure; opposition outrage enhancing the impression that something big must be under way. All that's under way is a carrying forward of an idea and policy born under the last government.

Labour is now scorning its own achievement. Blair saw, in a speech in 2005, the danger that his party might reject academies as a backdoor route to privatisation and middle-class exclusivity, distrusting all it cannot control. Balls – a brilliant oppositionalist – has convinced the left that this will be the outcome. But the left didn't take much convincing, since centralism and fear of freedom run deep in its DNA.

It appears impossible for anyone associated with the Labour party in its present mood to believe anything other than that every problem needs a state-directed answer, and that even a mild lifting of government will result in mayhem and inequality. So it wants good schools to be directed not just by local authorities (victims of both Labour and Tory plans) but by the centre. Almost all the freedoms that come with academy status – flexibility over wages, hours, the curriculum – arise from a lifting of Whitehall control. It is from the loss of local authority input – nearby help when a tree falls through the roof, or in managing admissions – that problems arise.

A wise Labour party would be challenging the government on this point: a brave one would call for the abolition of England's interfering department for education, rather than boosting it into some mini-me Brownite empire, as Balls attempted to do. An engaged opposition would also understand that Gove's law (and the similar policy Lib Dems set out before the election) will stand or fall on the size of the pupil premium, giving schools a financial incentive to include disadvantaged pupils and penalise middle-class ones.

This reeks too much of the market for Labour to endorse it, but if set high enough it could have an astonishing and positive effect. It is, in fact, the only revolutionary part of coalition education policy, which is presumably why it has been so little discussed. Gove must be worried the Tory party might notice. Labour is too tied up in protecting teachers' pay and conditions to care.

Yet everything depends on a financial number: the size of the premium. The number isn't in the bill. Some details will come in a written statement today. That is what Labour should be obsessing about, rather than restaging its own debate about academies from a decade ago. The party is defining itself once again as the defender of the same old state. This battle is nominally about schools; but the intellectual parameters will shape everything in this parliament.