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Which Tony will win on the NHS? ‘Social democracy’, please meet ‘democratic socialism’.
At the heart of the ‘perfect storm’ about the NHS is a mediocrity of some managers, lack of ability from some NHS ” leaders “, and some inexperienced or unknowledgeable junior politicians and the civil service, who are crippling the best efforts of the frontline clinicians. Not helping is the split personality of the UK Labour Party which has seen an unbearable tension between socialism and neoliberalism. A good short-cut to understanding this difference in opinions is to examine how Tony Benn and Tony Blair have considered the NHS.
Benn hates the idea that ‘the left’ destroyed the Labour Party, and this chicken is yet to return to roost. Baroness Thatcher’s biggest achievement might have been New Labour, but it might be sensible now to conceptualise ‘New Labour’ as a political experiment. It can be to all extent and purposes it can be considered now to be a separate party to Labour proper. As we enter Conference season, it would be helpful if Ed Miliband could begin to form a vision of what he wants the NHS to be like. Without this vision, Miliband will be floundering, firefighting, and be lost in an ideological abyss. Benn is genuinely intrigued ‘why the Labour Party ignores people’, and thinks that capitalism prefers to see their policies ‘advocated from the left’. That is why Sean Worth may be so keen to write blogposts for the Socialist Health Association. This could be conceptually similar to Rupert Murdoch liking New Labour. “People don’t believe what they’re told, and people don’t listen to them”, complains Benn, and this is especially true in how NHS managers and politicians have approached the running of the nHS.
Tony Benn has not substantially changed his views on socialism for a number of decades, and while Ed Miliband is a card-carrying ‘social democrat’, Tony Benn’s view of ‘democrat socialism’ made famous in 1978, now published as “Why America needs democratic socialism”, does now perhaps merit further scrutiny. Benn’s argument that many in the general public advocate a form of “the left”, further left than Labour, is not ill thought out either. Privatisation, which has brought excessive profits for a few, has not turned out to be a democratising process at all due to the dynamics of neoliberal oligopolies. Privatisation is not popular. Benn has never seen socialism as a destination on a railway line, but sees socialism as an “ongoing struggle”. Benn, conversely, thinks the Thatcherite “revolution” was to ‘wind up the welfare state’, in much the same way as Reagan wished to unwind ‘The New Deal’, and undermined by the failure of monetarism. He cites that he senses that ‘people realise that they don’t have any power’, and is strongly critical of the unelected nature of corporatism, meaning that the power invested in the undemocrat Central Bank, World Trade Organisation, IMF and multinational corporates has effectively led to a ‘one party state’. One can imagine what Benn thinks of the creeping corporatisation of the NHS. Benn argues instead that people feel that they are not being represented any more, and nothing could be further from the truth than the inability of Labour and the Conservatives to discuss the McKinsey Efficiency savings or the private finance initiative strategy.
The media “rejected socialism”, according to Benn, so did Mandelson, Blair and Kinnock. However, Benn weirdly enough has not given up the faith. As for private ownership, Benn argues that we are using taxpayers’ money to subsidise the railways which would otherwise run at a loss.
Benn thinks that clinicians and nurses should be involved in the management of the NHS, which is somewhat reminiscent of the ‘co-determination‘ strategy in Germany of corporate management. Ed Miliband is in fact known to be very keen on this model of corporate governance, as it is consistent with his view of ‘responsible capitalism’. Benn opines at 26 mins in:
“Absolutely. They’ve got all these management consultants. I don’t wish to insult management consultants. There’s a lovely story I heard years ago. It’s about a boat race between a Japanese crew and NHS. Both sides practice long and hard. The Japanese won by a mile. So the NHS faced with this problem set up a working party. The working party report that the Japanese crew had 8 people rowing and 1 steering, and the NHS crew had 8 people steering and 1 rowing. So they brought in management consultants who confirmed the diagnosis. They suggested that the NHS crew should be completely restructured with 3 Assistant Steering Managers, 3 Deputy Steering Managers, a Director of Steering Services, and a rower incentivised to row. They had another race. They lost by 2 miles. They laid off the rower for poor performance. They sold off the boat. There are too many management consultants and not enough managers in the hospital. When I went to Havana years ago, they took me to their hospital, I didn’t wish to see the equipment. I asked how the hospital is run. We discuss everything. The first meeting is one chaired by the management, the second meeting is one chaired by the Unions, and the third meeting is. So I really am not in favour of this top down view at all, and I feel industrial democracy has an appeal and people feel that they’re kicked about…”
At about 11 mins in of this second film, there is a clear contrast in tone with Tony Blair interviewed by Will Hutton in the film “The Last Days of Tony Blair”:
“Tony Blair:“Actually in the NHS it is the reforms around putting the patient at the centre of the system, choice, competition, incentives for the system to treat better, and more … those are the structural changes.”
Will Hutton: Those are the things you were criticising the Conservatives for in 1995, 1996, 1997, the markets, incentives, and the “wrecking ethos”, and here you are talking about ”
Tony Blair: Again it’s a fair point. Although it’s true there were elements in the 1990s which we brought back, on the other hand – it’s done in a more fundamental way. It’s done in a far more equitable way.”
Blair thinks of ‘communities’ as the dividing line between him and Thatcherism – as expressing solidarity and standing by the weak, more important than the “rights” of individuals. This ‘confirmed Christian’ ‘Good Samaritan’ ethos has somehow got lost in translation in Blair’s legacy, and will be savaged by the Health and Social Care Act (2012) which has acccelerated a fragmented NHS which is not comprehensive. These ‘community values’ are not to be seen in A&E departments being sporadically shut nationally. Miliband is likely to be supposed to be interested in this sense of justice in his view of social democracy, but this is indeed a common interface with democratic socialism. The problem is that these attempts at triangulation, bridging ‘left and right’ before, have been publicly strained, for example in Tony Giddens’ ‘Third Way’ which Giddens himself moots might have been a failure.
Blair thinks his approach is more “equitable”, but this can be fiercely debated. Blair talks of his love for his independent schooling system, and wishes that the best elements of this should be brought into the state system. The problem of these “academies” is that this is a repudiation of a ‘comprehensive’ system. While Blair is criticise a uniformity in low standards, reducing barriers to entry for private health providers driven by the bottom line, even that means compromising patient safety for profit, could make the final stage of NHS outsourcing and privatisation explode. Many members of the General Public do in fact the NHS to be properly funded, and do wish for a comprehensive system free-at-the-point-of-use. For all of Blair’s talk about asking the communities what they want, nobody has yet asked the general public whether they want to outsource services to India to make the bill cheaper. They are however wary of political decisions being made behind their back. In an article in the Health Services Journal, many will read with interest Patricia Hewitt’s view that, “Former health secretary Patricia Hewitt said trusts were either trying to access the fast growing sub-continental market ? estimated to be worth £110bn by 2017 ? or to harness Indian expertise”, but they will also be mindful of Hewitt’s own professional interest in opening up new private (perhaps emerging) markets in healthcare (see for example this article).
For this political issue, triangulation between ‘democratic socialism’ and ‘social democracy’ is not necessary. The neoliberal market is a boon for increasing profits in a crowded market for some. All the evidence suggests that this market will drive up health and social inequalities, and indeed increase the cost of running the NHS massively through waste and inefficiency. The final denouement of course comes from the destination of the transition we are now embarked upon; this unelected move will take us up to an estimated 31% of the budget going on admin. and wastage (as beautifully articulated by the Himmelstein and Woolhandler papers). Tony Blair may believe that ‘it doesn’t matter who supplies services in the NHS’, but for nurses about to be made redundant it does matter. Outsourcing these services to India will bring resentment, as well the exploding budget spent on management consultants; it is estimated that the NHS reorganisation, whilst creating massive turmoil, has cost billions so far. Nobody has ever bothered to criticise the impact of the inefficiency savings in delivering unsafe and uncompassionate care, and not thought to link it to the general state of the economy which has been a disgrace under the present Coalition of Conservatives and Neoliberal Democrats.
Miliband should repeal the Health and Social Care Act (2012), which does not even contain a single clause on patient safety. Miliband should also scale back massively the extent to which the NHS services are outsourced to the private sector, marketed fraudulently under the NHS label. He should most of all restore a properly funded comprehensive NHS free-at-the-point-of-use with a safe level of minimum clinical staffing. He needs to restore the Secretary of State’s duty for the NHS in this regard.
If we are so desperate about £20bn McKinsey efficiency savings, why are we spending £80bn on #HS2?
My personal response to Tony Blair's "advice"
This is a response to “Labour must search for answers and not merely aspire to be a repository for people’s anger”, by Tony Blair, published in the New Statesman on 11 April 2013.
Fundamentally, Blair is right in that Labour cannot merely be a conduit for ‘the protest vote’, but the issues raised by heir to Thatcher are much more than that to me. Blair argues that, “the paradox of the financial crisis is that, despite being widely held to have been caused by under-regulated markets, it has not brought a decisive shift to the left.” I am not so sure about that. Whilst I have always felt the taxonomy of ‘left’ versus ‘right’ largely unhelpful in British politics, I think most people in the country today share views about bankers and the financial services ‘holding the country to ransom’ (like the Union Barons used to be accused of), the failures of privatisation, the failures in financial regulation (PPIs), for example, which might have been seen as ‘on the left’. Tony Blair had a good chance of coming to power in 1997, and ‘the pig with a Labour rosette might have won at the 1997 General Election’ is not an insubstantial one. To ignore that there has been no shift in public opinion is to deny that the political and social landscape has changed to some degree. Whilst ‘South Shields man’ is still living with the remants of the ‘socially divisive’ Thatcherite government, what Michael Meacher MP politely called yesterday “a scorched earth approach”, voters are indeed challenging flagship Thatcherite policies even now.
Some Labour councillors and MPs did indeed embrace the ‘right to buy’ policy, but likewise many MPs of diverse political aetiology warn about the currentcrisis in social housing. Blair is right to argue, “But what might happen is that the left believes such a shift has occurred and behaves accordingly”, in the sense that Ed Miliband does not wish to disenfranchise those voters who did happen to embrace New Labour pursuant to a long stretch of the Conservative sentence, but we have a very strong danger now of disenfranchise the core voters of Labour. They are rightly concerned about workers’ and employees’ rights, a minimum wage (a Blair achievement), and a living wage (possibly a 2015 manifesto pledge by Ed Miliband.) Nobody wants to re-fight the battle of ‘left’ and ‘right’ of those terms, but merely ‘building on’ the purported achievements of Margaret Thatcher has to be handled with care.
Blair further remarks: “The Conservative Party is back clothing itself in the mantle of fiscal responsibility, buttressed by moves against “benefit scroungers”, immigrants squeezing out British workers and – of course – Labour profligacy.” Of course, Blair does not address the growth of the welfare dependency culture under Margaret Thatcher, but this is essential. Blair has also airbrushed the core of the actual welfare debate, about ensuring that disabled citizens have a ‘fair deal’ about their benefits, but to his credit addresses the issue of pensions in his fourth question. However, Blair falls into the trap also of not joining up thinking in various arms of policy, in other words how immigrants have in fact contributed to the economy of the UK, or contributed essential skills to public services such as the National Health Service. This is indeed a disproportionate approach to immigration that was permeating through the language of Labour ministers in immigration towards the end of their period of government. Blair fundamentally wishes to fight this war – indeed battle – on his terms and Thatcher’s terms. This is not on – this debate is fundamentally about the divisive and destructive nature of policy, of pitting the unemployed against the employed, the disabled against the non-disabled, the immigrant versus the non-immigrant, and so on. Part of the reason that Thatcher’s entire hagiography cannot be a bed of roses is that there exists physical evidence today of this ‘divide-and-rule’ approach to leadership.
Blair, rather provocatively at this stage, refers to the ‘getting the house in order’, which is accepting the highly toxic meme of ‘A Conservative government always has to come in to repair the mess of a Labour government spending public money it doesn’t have.’ However, the economy is in a worse state than bequeathed by Labour in 2010, and therein lies the problem that the house that the Tories ‘is getting in order’ is in fact getting worse. Acknowledgement of this simple economic fact by Blair at this juncture would be helpful. Blair’s most potent comment in the whole passage is: “The ease with which it can settle back into its old territory of defending the status quo, allying itself, even anchoring itself, to the interests that will passionately and often justly oppose what the government is doing, is so apparently rewarding, that the exercise of political will lies not in going there, but in resisting the temptation to go there.” Like all good undergraduates, even at Oxford, this depends on what exactly Blair means by the “status quo” – the “status quo” is in Thatcherism, and the “greatest achievement” of Conservatism, “New Labour”, so a return to listening to the views of Union members, ahead of say the handful of wealth creators in the City, is in fact a radical shift back to where we were. In other words, a U-turn after a U-turn gets you back to the same spot.
Blair then has a rather sudden, but important, shift in gear. He writes, “The guiding principle should be that we are the seekers after answers, not the repository for people’s anger.” This is to some extent true from the law, as we know from the views from LJ Laws who has described the challenges of making dispassionate legal decisions even if the issues are of enormous significance in social justice. Blair, consistent with an approach from a senior lawyer remarks, “In the first case, we have to be dispassionate even when the issues arouse great passion.” But then he follows, “In the second case, we are simple fellow-travellers in sympathy; we are not leaders. And in these times, above all, people want leadership.” Bingo. This is what. Whatever Ed Miliband’s ultimate ideology, which appears to be an inclusive form of social democracy encouraging corporate as well as personal citizenship, people ultimately want a very clear roadmap of where he is heading. The infamous articulation of policy under Cruddas will help here, but, as Ed Miliband finds his feet, Miliband will be judged on how he responds to challenges, like Thatcher had to respond to the Falklands’ dispute or the Miners’ Strike.
Blair fundamentally is right to set out the challenges. In as much as the financial crisis has not created the need for change per se, to say that it has not created a need for a financial response is ludicrous. The ultimate failure in Keynesian policy from Blair and Brown is that the UK did not invest adequately in a period of growth, put tritely by the Conservatives as “not mending the roof while the sun was shining”. Mending the roof, to accept this awful image, is best done when the sun is shining. Therefore, Labour producing a policy now is to some extent not the best time to do it. Blair had a great opportunity to formulate a culture in the UK which reflected Labour’s roots in protecting the rights and welfare of workers, but it decided not to do so. Tarred with the ‘unions holding the country to ransom’ tag, it decided to Brown-nose the City quite literally, leading to an exacerbation of the inequality commenced under Thatcher. Blair skirts round the issue of globalisation and technology in a rather trite manner, one assumes for brevity, but the wider debate necessarily includes the effects of globalisation and technology on actual communities in the UK, and the effect of multi-national corporates on life in the UK. Even Thatcher might have balked at the power of the corporates in 2013 in the same way she was critical of the power of the Unions throughout all of her time in government.
Whilst “Labour should be very robust in knocking down the notion that it “created” the crisis”, there is no doubt that Labour has a ‘debate to be had’ about how the Conservatives did not oppose the legislation of the City at the time by New Labour (and even advanced further under-regulation), why George Osborne wished to meet the comprehensive spending review demands of the last Labour government, and how the Conservatives would not have reacted any differently in injecting £1 TN into bank recapitalisation at the time of the crisis. The idea of spending money at the time of a recession has been compared to supporters of FA Hayek as ‘hair of the dog after a big binge’, but unfortunately is directly relevant to Blair’s first question: “What is driving the rise in housing benefit spending, and if it is the absence of housing, how do we build more?” Kickstarting the economy and solving the housing crisis would indeed be a populist measure, but the arguments against such a policy remain thoroughly unconvincing. The second question, “How do we improve the skillset of those who are unemployed when the shortage of skills is the clearest barrier to employment?”, is helpful to some extent, but Blair again shows that he is stuck in a mysterious time-warp; two of the biggest challenges in employment, aside from the onslaught in unfair dismissal, are the excessive salaries of CEOs (necessitating a debate about redistribution, given Labour’s phobia of the ‘tax and spend’ criticism), and how to help the underemployed. The third question is, course, hugely potent: “How do we take the health and education reforms of the last Labour government to a new level, given the huge improvement in results they brought about?” Fair enough, but the immediate problem now is how to slow down this latest advance in the privatisation of the NHS through the Health and Social Care Act (2012), and for Labour to tackle real issues about whether it really wishes to pit hospital versus hospital, school versus school, CCG against CCG, etc. (and to allow certain entities, such as NHS Foundation Trusts, “fail” in what is supposed to be a “comprehensive service”). The other questions which Blair raises are excellent, and indeed I am extremely happy to see that Blair calls for a prioritisation of certain planks of policy, such as how to produce an industrial strategy or a ‘strategy for growth’, and how to deal with a crisis in social justice? There is no doubt that the funding of access-to-justice on the high street, for example in immigration, housing or welfare benefits, has hit a crisis, but Blair is right if he is arguing that operational tactics are not good enough. Sadiq Khan obviously cannot ‘underachieve and overpromise’ about reversing legal aid cuts, but Labour in due course will have to set out an architecture of what it wishes to do about this issue.
Ed Miliband knows that this is a marathon, not a sprint. He has the problem of shooting at a goal, which some days looks like an open goal, other days where the size of the goal appears to have changed, and, on other days, where he looks as if he runs a real risk of scoring an ‘own goal’. It is of course very good to have advice from somebody so senior as Tony Blair, who will be a Lord in the upper chamber in due course, and Miliband does not know yet if he will ‘squeak through’ in the hung parliament, win with a massive landslide, or lose. Labour will clearly not wish to say anything dangerous at the risk of losing, through perhaps offending Basildon Man, and, whilst it is very likely that South Shields Man will remain loyal, nothing can be taken for granted for Ed Miliband unfortunately. Like Baroness Thatcher’s death, Tony Blair’s advice at this stage was likely to rouse huge emotions, and, whilst the dangers of ignoring the advice might not be as costly as Thatcher’s funeral, it would be unwise to ignore his views which, many will argue, has some support within Labour. However, it is clearly the case that some of the faultlines in the Thatcher society and economy have not been healed by the New Labour approach, and Ed Miliband, many hope, will ultimately forge his own successful destiny.
Dr Lucy Reynolds with a very clearly evidenced explanation of UK NHS privatisation
“Patient choice? Always choose the NHS”
Dr Lucy Reynolds is an academic in health policy at the London School of Hygiene and Tropical Health (for biography, please see here.) In a wide-ranging interview with Jill Mountford, Dr. Reynolds explains in very clear language how English health policy has progressed in recent years, charting the progress of the current legislation enabling the NHS privatisation. However, Dr. Reynolds states clearly that the current developments in the NHS privatisation would have been virtually impossible but for the policy developments under New Labour from the mid 2000s. Dr Reynolds also explains how the idea of PFI was sold to the private sector and public in different ways, and has been an important step for this privatisation routemap.
Dr Reynolds’ analysis is crystal-clear. What has been frustrating is how senior journalists, including at the BBC, have “failed to understand” the process sufficiently to be able to describe it ‘for the public good’. It is extensively referenced, and also draws on findings and observations from other jurisdictions about “lessons learnt” about the organisation of their healthcare. She describes the recent section 75 Regulations (both the original one and as amended) as the “jet engine” for the “plane” of privatisation which was launched last year, but notes that nobody knew what the jet engine precisely was until relatively recently. Furthermore, Reynolds notes that the legislation sets up a competitive market blatantly rigged in the favour of private entities who can operate in the marketplace, and establishes the supporting evidence for that.
As you’ll see from the comments on this YouTube thread, the explanations have been very well received.
For some further explanations of aspects of this narrative, I have blogged on this website, as described here:
“Competition Regulations issued under Section 75 of the Health and Social Care Act (2012) will lock CCGs into arranging all purchasing through competitive markets”
my blogpost on 7 January 2013 here
“The privatisation of the NHS appears to be going to plan”
my blogpost on 3 January 2013 here
“Rainbow coalition warns about section 75 NHS regulations”
my blogpost on 27 February 2013 here
Further reading
“NHS Plc” by Prof Allyson Pollock
“The plot against the NHS” by Prof Colin Leys and Stewart Player
The privatisation of the NHS appears to be going to plan
For a clear description of what privatisation is, and how the NHS came to go down a process of privatisation, I strongly recommend the article “Opening the oyster: the NHS reforms in England” by Dr Lucy Reynolds and Prof Martin McKee (Clinical Medicine, Journal of the Royal College of Physicians) April 2012.
“According to a glossy brochure summarising the conference held last October, Britnell told his audience: “GPs will have to aggregate purchasing power and there will be a big opportunity for those companies that can facilitate this process … In future, the NHS will be a state insurance provider, not a state deliverer.” He added: “The NHS will be shown no mercy and the best time to take advantage of this will be in the next couple of years.””
(David Cameron’s adviser says health reform is a chance to make big profits, 14 May 2011, Guardian)
“Oliver Letwin has reportedly told a private meeting that the “NHS will not exist” within five years of a Conservative election victory. The Shadow Chancellor said that the health service would instead be a “funding stream handing out money to pay people where they want to go for their healthcare”, according to a member of the audience. The remarks, which have been furiously denied by Mr Letwin, were last night seized on by Labour pecks evidence of the Tories’ true intentions towards the NHS. It is not disputed that Mr Letwin met a gathering of construction industry representatives in his constituency of Dorset West on 14 May. During the meeting he urged the group of around six local businessmen to work together to win contracts for a new PFI hospital to be built in Dorchester. Mr Letwin then astonished his audience, however, by saying that within five years of a Conservative election victory “the NHS will not exist anymore”, according to one of those who were present.”
(“Letwin: NHS will not exist under Tories”, Andy McSmith, 6 June 2004, Independent) (more…)
In a typically understated way, Ed Miliband has unleashed an explosive election-winning policy
Ed Miliband has always been “the underdog”, even since he won the party’s protracted leadership contest at Conference in 2010. That Conference was also held in Manchester. People will necessarily be trying to work out what he has done since last year. The public are irate that their public services are being outsourced, being run incompetently, and key people seem relatively incompetent; the public disgust at A4e, ATOS and G4s, over various incidents, has been enormous. And yet when Ed Miliband talked about how it was simply insufficient that certain corporates make enormous profit without acting responsibly, nobody knew what Ed was talking about. And they still don’t know what Ed is talking about – but Ed knows he’s right, and, in a typically understated way, he just gets on with his business.
Ed Miliband is not unpopular, much to the chagrin of his opponents, and indeed Labour is relatively popular in the opinion polls currently. The media have worn themselves out with quasifeuds between David Miliband and Ed Miliband, and Ed Miliband and Ed Balls, because the media know that if they were take to the moral highground on actual feuds they would be obliged to analyse the highly dysfunction in Coalition dynamics in time-consuming detail.
Ed Miliband has in fact through his Policy Network speech put down a trap for the unwary. Whilst ‘pre-distribution’ is not a new concept, it has a lot of people who will warm to it. Unions will warm to it, because their members might feel valued more through a ‘national living wage’. People who criticise the lack of implementability of the ‘national living wage’ would be best advised to consider that the national minimum wage, under Tony Blair, has been successfully implemented.
It is also a direct attack on the primacy of the City of London. It is indeed interesting to see where this approach sits with members of the former ‘Blue Labour’ initiative. Whilst Chuka Umunna can validly fight for the rights of employers and workers in the workforce, including SMEs, not least because he is an experienced employment lawyer by training, there may be little to embrace so warmly the City, as the Brown/Blair governments had. The City have had their tax breaks, and awarded themselves cushy bonuses having been bailed out by the State which the Conservatives love to malign. The City is unpopular amongst the majority of UK voters, and any sense of wealth creation is negated by the amount of damage which they have done to this unbalanced economy. A small number of people have awarded themselves excessive pay, and these are obviously not the beneficiaries of ‘pre-distribution’. In ‘pre-distribution’, the government can decide to reward directly public sector workers (e.g. nurses, teachers) through a form of ‘working tax credits'; or else it could throw the ball into the courts of the all-powerful corporates, in encouraging them to introduce fairer pay such that people actually want to work for them.
Most significantly, ‘pre-distribution’ puts Society ahead of the market. This is an election-winning strategy, not least because there are millions of customers who feel that many private entities offer little in the way of choice or competition, offer their shareholders large dividends, and do not have the quality of their goods or services as a major goal. These market failures are seen, for example, in the banking, gas, electricity, water, and exam boards sectors, and the fact that the market is failing means that Society will be able to revolt.
Finally, and most significantly of all, pre-distribution is a direct attack on New Labour, as it places value as a much higher priority than simply price or cost. It is well validated by experienced economists, and is a popular ideology amongst the current US administration. New Labour did nothing to promote the value of the Unions, and the fact that the Unions warmly embrace this policy should give Ed Miliband promise. It will do a great many things within Labour, not least ‘give value for money in public services’, and ‘allow aspiration for individuals’, for example through better wages for their jobs and career progress. These ironically were New Labour goals as well, but the problem with New Labour is that it threw the baby out-with-the-bathwater, for the sake of winning elections.
How Nick Clegg ended up being blamed for New Labour
Put another way, Nick Clegg ‘sided with the devil’, and ‘made his bed so he can lie in it.’ In an excellent previous article on the ‘Tax Research’ blog, Richard Murphy sets out the case that Tony Blair was a neoliberal, commencing how Blair himself spoke about his new book to the Guardian. The Guardian notes:
Blair’s outspoken remarks about the financial crisis and the aftermath of the British general election of 2010 in his book’s postscript are likely to have a wide party political impact, especially his caution about any embrace of the view that “the state is back”.
Tony Blair specifically cites that:
“The problem, I would say error, was in buying a package which combined deficit spending, heavy regulation, identifying banks as the malfeasants and jettisoning the reinvention of government in favour of the rehabilitation of government. The public understands the difference between the state being forced to intervene to stabilise the market and government back in fashion as a major actor in the economy.”
Murphy then articulates that the Blair administration was thoroughly ‘New Labour’, noting that: “It betrayed as a result the very core of what Labour did stand for and should stand for. It was desperate – power at any cost. But that was wrong. Power comes with a responsibility to those who grant it – and New Labour failed in that duty.” This is an interesting observation, as Blair considered that he was continuing in the tradition of Thatcher, and that Cameron has been continuing in the tradition of Blair. Brown is not included in this ‘chain of indemnity’, save for being a powerful member of the Blair government. Nick Clegg unwittingly found himself holding the ‘balance of power’, and is now a target within his own party.
This morning, Lord Matthew Oakeshott, a very senior Liberal Democrat peer (and friend of Vince Cable) indicated the party must oust leader Nick Clegg if it wants to avoid electoral disaster in 2015. Oakeshott further explained that it was time to examine the party’s “strategy and management” to ensure it has a chance of success at the polls. It is probably fair to say that tribal hostility between Labour and the Liberal Democrats has intensified since the famous general election of May 2010, with many Labour activists blaming Nick Clegg for ‘selling out to the Tories’. In particular, Nick Clegg is blamed for his U-turn on tuition fees (the famous “Nick Clegg pledge”), and not stopping the privatisation of the NHS. This criticism of Nick Clegg has been advanced by many Labour activists wishing to see destruction of aspirations of members of the Liberal Democrat Part in 2015. Labour dare not openly criticise Tony Blair itself – the reason that Ed Miliband can only pussyfoot around the legacy of New Labour is that he fully realises that he risks internecine warfare within Labour.
This is a pointless concern of Labour in perpetually being concerned about the image of the Unions. New Labour made no effort to dilute the anti-Union legislation of the previous Conservative administrations, and Labour has always had a thirst for powerful backers from the corporate sector. This is sheer folly, as corporates will rarely have the welfare of its workers as a primary consideration in formulating its business strategy over profit; the reality of this is brought home with the lack of investment in Labour which will come to Ed Miliband as a result of him envangelising about ‘responsible capitalism’ in politics, or ‘corporate social responsibility’ as it is known to everyone else in law and business.
The history of New Labour’s contribution to tuition fees and the privatisation of the NHS is all too clear, however. In May 1996, Conservative Prime Minister John Major commissioned an inquiry, led by Sir Ron Dearing, into the funding of British higher education over the next 20 years. Published on 23 July 1997, the Dearing report made 93 recommendations. It estimated additional funding of almost £2 billion would be needed over the next 20 years, including £350 million in 1998-9 and £565 million in 1999-2000, in order to expand student enrllment, provide more support for part-time students and ensure an adequate infrastructure. The inquiry favoured means-tested tuition fees and the continuation of the means tested maintenance grants as well as student loans. It recommended that graduates made a flat rate contribution of 25 percent of the cost of higher education tuition and that a mechanism for paying for this should be established by 1998-9. Following the publication of the report, the Labour education secretary David Blunkett announced the introduction of means-tested tuition fees to begin in September 1998. He also announced that the student maintenance grant would be abolished and replaced by student loans.
In fact, New Labour also began to tinker with the NHS almost as soon as it came into office, with promises “to overturn the Conservatives’ internal market structure, vowing to replace it with a more collaborative, quality-based approach”. Following its “Agenda for Change” initiative of 2004, the New Labour government then, in 2006, installed a new chief executive, David Nicholson, whose role was to carry out reforms of the NHS “to tackle its debt crisis”. In a speech delivered behind closed doors back in 2009, it was Nicholson who told health service finance directors that a new programme of reforms was needed to deliver between £15 billion and £20 billion [which equated to 6% of the total budget] in ‘efficiency savings’ over three years from 2011 to 2014. In response, Dr Hamish Meldrum, chairman of the British Medical Association council, warned that if efficiency savings went ahead on such a scale “there is a real danger that patient services could be threatened”. What had started with Thatcherism, and then continued under Blair and Brown, has now reached a critical phase under Cameron, inspired by John Redwood and Oliver Letwin.
I feel that, whilst it is convenient to blame Nick Clegg, the policies being enacted by the Coalition are end-products of significant policy planks of New Labour. Labourites who choose to ‘punish Nick Clegg’ for enactment of these policies are in a way reminiscent of a Shakespearean tragedy attacking the foundations of education and NHS policy that they helped to produce in New Labour. Nick Clegg, instead of being a visionary who changed politics, has simply enacted ‘more of the same’, and it is a moot point whether Labour or the Conservatives would have followed this policy path anyway. It is parsimonious to conclude that all people on the Left who vote against Nick Clegg are voting against New Labour, even if they would never dare to admit it if they were members of New Labour, but the problem is that Nick Clegg is merely a symbol for what has gone on for more than a decade. If Ed Miliband, by fluke or hard work in criticising the demonisation of the disabled or privatisation of the NHS, enters Downing Street on May 8th 2015, it could well be ‘more of the same’, even if Nick Clegg has retired from full-time politics despite winning his very safe seat in Sheffield.
In fairness to us, in Labour, we voted against all these measures, unlike the Liberal Democrat MPs; we voted against this, scrapping the Education Support Allowance, against disability benefit changes, and much more, but we are sadly not in government for the time-being. More than that, Labour has pledged that the maximum university fee for students in England would be cut by a third under Labour. This would be partly funded by higher interest on student loans for graduates earning more than £65,000 a year. Furthermore, Labour currently also has a strategy for coping with the NHS reorganisation. The first of these is a proposal to raise the cap of the amount foundation trusts can receive from private sources to 49 per cent. Secondly we wish to reframe the role of Monitor, the body charged with regulating competition within the NHS, as the small print suggested at the moment the role of the market would be “modelled explicitly on the role of privatised utilities”. Thirdly, it is proposed that GPs might be stopped from commissioning services from themselves, which is felt to be a “a conflict of interest”.
So if Tony Blair and David Cameron got away with it, why can’t Nick Clegg? Nick Clegg can’t, because he has a repeated tendency to say one thing and do the opposite (or do one thing and say the opposite, like the wealthy and taxes). Ultimately, voters hate it if leaders blatantly lie to them. Few people have any feelings towards Nick Clegg apart from complete contempt for ‘selling out’, and Labour has always argued that it had no intention of ‘going this far’. I don’t wish to diminish any scrutiny of Nick Clegg’s rôle in implementing policy in the UK, but I do wish us in Labour to learn lessons about how evolve our policy for the future in a constructive way. Believe me – on this Matthew Oakeshott is completely right, I feel – Nick Clegg is finished! Most importantly, history will be the best judge of whether Tony Blair or David Cameron have in fact ‘got away with it’, after all. Ed Miliband’s own political career, in distancing himself from these policies (or not), will be the best testament to that.
I respect Tony Blair, but New Labour was wrong on economics
I respect Tony Blair much. Indeed, he won three impressive election victories for my Party. Indeed, I like him as a person. I find his account of his family in ‘The Journey’ very moving.
However, as Frank Dobson MP points out in the video below, Labour started to lose support in the early 2000s, long before the Iraq War. I am in two minds about Tony Blair’s path to power. I believe it was important that the public were on his side, and you need to have the genuine support of followers to be successfully in power in government rather than to be simply in office. On the other hand, having vivid memories of Thatcherism in his heyday, prior to the Poll Tax, I believe that a donkey could have beaten John Major in 1997. I’m only surprised he won in the first place, which is indeed a tribute to him and the Conservative Party.
However, I firmly believe that New Labour was wrong on economics. The field of behavioural economics provides that there are irrational customers, and that’s all ‘rather complicated’. I am not interested in getting bogged down in an erudite discussion of ‘Nudge’ at this point – I disagree with Nudge too, as it happens.
Whilst it is comforting to think of things in terms of the supply-demand graph, real economics provides that price, cost and value have different definitions in modern economics. Furthermore, the Nobel Prizes for economics in 2001 and 2002 respectively, with Joe Stiglitz and Dan Kahneman, offer a convincing argument for information asymmetry in decision-making and loss aversion in decision-making.
This is particularly relevant now when it is erroneous to compare apples with bananas in the NHS. It’s difficult to compare the costs and value of chronic dementia care with the cost of a hip operation, and it may be dangerous to leave this entirely in the hands of a free market which operates under law to maximise shareholder dividend. If I had to pay for the medical care for my six week coma due to meningitis in 2007, I would owe the private health company millions probably. I think we do need some sort of shared risk/insurance system, but the NHS currently is not paid out of National Insurance to my knowledge. The sooner the Blairites appreciate this the better – otherwise their exercise is being run by shabby marketing people who don’t even understand economics like good marketeers do.
Despite some low points, I am still very proud to be supporting Ed Miliband. I voted for Ed, and indeed this video is of Frank Dobson at his last ever hustings when he was campaigning to be leader of my/our Party. And yes, and I came top in the MBA in economics and marketing last year in case you’re wondering..
Shibley Rahman on Ed Miliband's Labour
Ed Miliband’s Labour has to move beyond New Labour and commit to changes in policy and organisation as profound as those introduced by Tony Blair in 1994.
I would like to see 50p tax rate remain for those earning more than £150,000 – I would like to see it permanent, especially in this age of austerity, as a way of creating greater equality in Britain. When I met Ed Miliband for the first time in his primary school at Haverstock Hill, I had a photograph taken with him. During this smile, I said to him, “Did you know that in Tony Blair’s “The Journey”, the words inequality and poverty don’t appear once in the index?” He continued smiling, in a way that reminded me of my first ever supervisor at Cambridge, Prof Simon Baron-Cohen, and grinned, “No, really!” Labour has to be much stronger on issues of inequality and poverty, to regain the moral ground. It needs to win the hearts of England, let alone Middle England, and the legacy of an increasing inequality gap in Britain is one which I am deeply ashamed of as a English Labour member. The people who are described as the ‘wealth creators’ are also the people making money out of speculating on money inter alia, creating nothing of any artistic or scientific merit for this country, and to a large extent created the mess that the poor are now paying for. This is truly obscene. Actually, it was at this point I decided that I would vote for Ed Miliband as leader of my Party.
A policy review will be conducted including commissioned work by independent thinktanks and studies by each shadow cabinet member on the issues in their field. Ed Miliband is starting with new policies, but the same values. This is brilliant news – as it to some extent obviates the inefficient and ineffective policy formation groups of the antiquated Labour machinery. As a member of the Fabian Society, Progress and Compass, I warmly embrace this challenge, as we build our new policies addressing people’s aspirations, but recognizing that their expectations and hopes are threatened by insecurities. These insecurities are across a diverse areas of society issues, including housing, immigration, of course, the public services, the bedrock of Britain, what makes Britain special, and the heart of Britain’s infrastructure.
The changes proposed by Ed Miliband will indeed be substantial as the world itself has changed massively, and Labour did not change massively. I believe strongly it needs to have a clear idea as to whether it agrees with the commodification and marketisation of British life at all. David Cameron despite enormous backing patently did not win the last general election because he didn’t undertake the profound change he needed. What he has performed is a hatchet salvage operation, which does nothing to paper over the cracks surrounding Europe, for one. I am not even convinced that New Labour was in the right place at the right time even then, apart from being an antedote to Margaret Thatcher. Labour has indeed embarked on an intellectual and practical journey, but every long journey has to start with its smallest initial steps.
Ed Miliband furthermore says he does not want union levy payers disenfranchised from the Labour party elections, but is happy to look at how the relationship could be reformed. He once said publicly in a meeting which I attended that he didn’t want the Union to be seen as Labour’s evil uncle that we needed to lock in the attack whenever visited. The reasoning for this is clear – you don’t have to be a member of Labour to be a member of a Union, Labour was born out of the Unions and we have a proud history together, and the Unions represent the part of the business and industry that is interested in ethical action, not necessarily shareholder profit at all costs.
I will be supporting him all the way. Ed Miliband is full of surprises, and there’s a remarkable combination of focus and unpredictability in him I very much respect.
Dr Shibley Rahman Queen’s Scholar BA MA MB BChir MRCP(UK) PhD FRSA LLB(Hons)
