A review of the "New" Labour government’s

first year in government in Britain

In May 1997, the British people voted in a "New" Labour government headed by Tony Blair. The Labour party is a traditional socialist party that successfully refreshed its image to make itself look electable to more voters in this day and age.

I disagree with many of the legislation and policy decisions made by the Labour government, such as:

HEALTH AND EDUCATION

Health and education policies are the centerpiece of Britain’s welfare state and Labour’s policy priorities- as stated in their election manifesto and repeatedly during their first year of office. So lets look at the structural measures they have taken:

The elimination of the internal market in the national health service. The internal market tried to stimulate competition for the provision of health services to try and encourage efficiency- it tried to introduce private sector-like mechanisms into a public system. The optimal policy was not to eliminate the internal market, but to increase the use of the external market.

Individual general practitioners (doctors treating the general public) were previously responsible for distributing their surgery’s funds. This will be replaced by collective team-based budget control with each team involving up to 50 doctors. Location becomes the criteria for working together- not voluntary agreement between like-minded doctors. Such group rather than individual oriented policies are typically socialist.

The trouble with public systems is that they are politicized- customers get a raw deal. That was the genius behind the previous government’s Patient’s Charter- which set limits on things such as waiting times. It put patients first, not the staff, or funding, or government or inspectors or trade unions, but the customers.

I know people who have to travel across town to see a doctor when there is a doctor’s practice close to their home- because the patient lists are full in the nearby practice. And a health system in which parent and child, both with colds or other ailments, have to make separate appointments at different times because that’s what the procedures dictate. And a system in which you have to wait a week after getting ill before an appointment is available. And a health system in which my grandfather, who was a policeman walking the streets of England on the beat for 20 years, needs his kneecap replaced, probably as a result of his public duties. He is faced with the choice of waiting two years for public health service or paying 6000 pounds and going private. Quality of life forced him to go private- after paying into the public system for decades, when he needs it, it lets him down. Everyone has stories like these.

The abolition of nursery school vouchers. The removal of choice from parents- instead the focus turns to Labour trying to improve schools by spending more and setting more performance targets. Labour SAY that ALL schools should be bought up to scratch, rather than ACTUALLY letting the market filter out the good from the bad by parental selection using vouchers. What do you think the most effective way of achieving excellent teaching is- a few more pounds on a few more school inspectors- or competition between schools to attract pupils and their vouchers? Why set performance targets when the market confers the ultimate stimulus for excellence?

Britain is a country whose public heath system is in bad health. Its public education system cannot educate. Yet all the Labour government says and does is how much more public funds they have found to increase spending on existing systems, whilst eliminating the only market-oriented programs that alleviated the problem. You cannot achieve fundamental improvement in something that is fundamentally flawed merely by increasing spending- this is just throwing good money after bad. You have to stimulate market-based incentives. We need internal markets and the patient’s charter in the health service and internal markets and the pupil’s charter in education. And increasing private sector involvement in both.

A NANNY STATE

It is difficult for someone outside of Britain, and the general public within Britain, to gauge the extent to which the nanny state is creeping into every aspect of British people’s lives- business and personal. The Labour government regulates the micro-behavior of individuals- telling them what they can and cannot do.

I want to try to demonstrate this creeping intervention by listing the complete set of headlines from the UK News section of the British edition of the "Financial Times" newspaper from the 14^th of January 1998. The headlines, with their sub-headlines were:

Warning over power competition, Centrica threatens ‘bloody row’ over bid to delay introduction of open market

Ulster parties turn to the fine-tuning, Government intervention eases debate on settlement for province

Blair gets a taste of telephone democracy

Scottish bill set for full debate

Defense export licence staff increased

Local authority ‘failing in duty’

Brussels clears brewer’s leases

DTI [Department of Trade and Industry] moves on merger

Accounting body fines ex-MP

Utility takes environmental role

Air pollution hastens deaths

Benefit remains under review

Welsh farmers stage blockage

Legal Firms make take Law Society to court

Government makes overtures to music, AR looks at Labour initiatives to forge closer links with the record industry

Record year for the sponsorship of the arts

Wakeham quits horserace board

Football body urged to set up financial regulator

London major poll suffers setback in Lords

Pension fund group moves to head off legislation

Primary schools told to target the three ‘Rs’

Positive comfort for homeowners, Rise in house prices has curbed the curse of negative equity, says Halifax

Radio companies face licence curb, Inquiry into lapsed Virgin bid restricts ownership of three stations in one area

Sales of two-wheeled vehicles rise 40%

Truckmakers fear lean year

Privatised train services ‘growing worse’

These headlines almost all contain news of regulation, legislation and licensing, interventions and lobbying. They are an accurate reflection of the state of affairs in the United Kingdom in 1998. Pick up any UK newspaper and look to see the measures that the government is making- day in, day out, and consider the adverse implications of this perpetual squeezing of the economy and society. A large number of little squeezes eventually throttle the economy.

Day in, day out, new cases of this nannying come to light- in which the government justifies its regulation by saying that its in the best interests of consumers- in their opinion. Let’s have a look at just a few of the rampant instances of the nanny state under Labour:

The outright ban of the sale of beef on the bone. The government chooses to ban the sale of certain products outright- removing the choice from consumers- despite the tiny and uncertain risks associated with those products-because politicians know better than the public what consumers are allowed to eat. As a result, butchers who have been selling those products for decades, and consumers who have been eating T-bone steaks for longer, suddenly find themselves precluded from eating favored foods or breaking the law by selling them.

The Agriculture Minister, trying to pretend the role has relevance beyond the lobbies, in the twenty-first century, then advises the public on how much meat they should eat. Average consumption levels are recommended to help people to reduce the risk of getting cancer. The government then changes its mind a few months later and withdraws its recommendation- saying that most people don’t need to change what they eat after all. This leaves the public more confused than ever.

The Labour government is drawing up legislation that would ban the sale of Close Circuit Television (CCTV) footage to the public. Government ministers believe that the few cases seen of sales of such products will undermine public confidence in the use of CCTV footage for legitimate purposes such as court evidence. (BBC TV NEWS, 22 FEB 98).

Here we see the government legislating for what it admits is only a handful of cases. This is always the way that political governments justify using the sledgehammer of legislation to crack a nut. They identify the worst case, lowest common denominator with the most flagrant abuse, and then go through the time consuming and expensive process of legislating it out of existence- and all under the guise of protecting the public. This measure should be before parliament by the end of 1998.

Care of mentally ill patients in the community. This is one of the most difficult and controversial examples of the nanny state. Fewer mentally ill patients are now treated in traditional asylums in Britain. Instead they are treated at smaller facilities distributed throughout the country.

The Labour government writes a report saying that the public perceives care in the community to be a dangerous policy. Why? Because the few incidents of such patients using force against the public have been highlighted by the press. Any successes of the program have not been publicized and are not understood- by myself, or other members of the public. The government then responds to popular misinterpretation of the problem and concludes that the whole system needs to be changed. They use one-off extreme cases as an excuse to intervene and regulate every situation. They do not look at the patients, but at the voters. All they really care about is how they are perceived by the voting public- not whether the policy makes sense for the general good. The government responds not to reality but to popularity.

Britain in 1998 is a nanny state. The government’s justification for the nanny state is that the general public must be protected. The government thinks that the benefit from eliminating dubious risks justifies the extensive costs to people and industry that these nannying policies entail. But the government does not know enough to identify and quantify real risks and therefore people should look after themselves. Life is always dangerous, its just especially so when interventionist governments are in power.

LOCAL GOVERNMENT

There is something seriously amiss with local government as well. Local government bodies in Britain are taking more of people’s money, giving them less in return and carrying out many tasks that are better run by the private sector. For example:

The government keeps changing the territory boundaries of the local authorities, so, for example, Newbury District Council became West Berkshire and increased its local council tax by 20%. Government buildings and employees get moved around in the process, but the end result is that the name change presents the opportunity to increase the bills that people have to pay. Its a bit like private companies filing lower profits because of reorganization costs- except that unlike shareholders, taxpayers never see any subsequent benefit.

The local government unnecessarily runs amenities such as sports facilities and parks. The justification for government’s involvement must follow that of the arts and have something to do with the general public benefit of having such facilities. But the majority of people pay for but do not use or benefit from having state-owned sports facilities, and those that do use them have to put up with sub-standard equipment and premises. There is no reason for these popular facilities to be run by government.

For example, in the vicinity of where I live, there are several sporting facilities:

My brother, some of my friends and my former colleagues have joined a brand new private-membership gym called "Pinnacle: The Club" located at Newbury Racecourse. About 5,000 people pay about 50 pounds per month for the privilege with its high-tech modern facilities such as "Extensive gym featuring cardio theater, spa pool" and so on.

I play soccer at some council-run playing fields in Thatcham. There are about 10 pitches and a new building with changing rooms and other facilities. My soccer team trains at the Kennet Sports Centre, also in Thatcham. This sports centre, and another in Hungerford, are "Managed by Relaxion Limited, a Relaxion Group company, on behalf of Newbury District Council...". (taxpayer’s money has not YET been spent on new leaflets to reflect the change in local "authority" name). Kennet had a new indoor swimming pool built in the last couple of years. Meanwhile, the outdoor swimming pool at Northcroft Leisure Centre, 100 meters from my home, is in disrepair. This particular centre is run by CCL Leisure. There is no reason why any of these popular facilities cannot be run privately- there is a high demand for the services they are trying to provide.

ARTS AND CULTURE

The "Cool Britannia" government cultural program. The government is trying to renew the brand called "Britain". Labour celebrates British success in creative industries such as fashion and filmmaking – which it had nothing to do with achieving because it came about through the private sector. The fact is that British people are not more cool and creative than any other nation. Britain has its talented people from history (Shakespeare etc.) and currently (?). But so does every other nation. The change from the old organized to today’s unorganized world always gives some people the opportunity to become a success story. Like the royal family, these cultural programs are only useful in attracting tourists.

Business people and artists keep going to government offices for dinner parties with the politicians. Why must business success be tied up with jollying up to politicians- why is lobbying so necessary? Such incestuous unholy alliances between business and government simply bring more chances for capture and corruption. We have seen numerous examples of this relentless and unnecessary mingling such as:

The donations to the Labour Party by business people. For example, the head of the Formula One grand prix organizing body donated a million pounds just before Labour announced they would not be banning cigarette advertising in sport

The appointment of business people to unpaid roles in government

Tony Blair intervening with the Italian government on behalf of Rupert Murdoch, a media business leader

The government "advising" filmmakers that they should get closer to film distributors to find out what the market wants. As if successful entrepreneurs don’t know this already! This is an interesting example of the nanny state encroaching on business people just as it does on consumers

The government has set up a 50 million pound venture capital fund for universities so that research and inventions stay in the UK. Two things- the nation state only matters to national governments, as the benefits flow back to Britain anyway in a global economy, and it is not the role of governments to fund and select business ventures

There is still no such thing as a free lunch- the only thing that has changed since the last Labour government was that then it was the government that got accosted by trade unionists, whereas these days, the government coerces big business into participating in government policies.

Politics should either be separated from business completely, giving them different roles, or better still, is should be recognized that everything is business these days, and political government should be replaced by economic government.

The follies of the "Millenium Dome". The government intervenes to build a dome in London to commemorate the year 2000- a project that uses a great deal of public funds that could be better spent elsewhere. Let people celebrate the millenium however they want to- the twenty-first century will not be about government organized mass architecture projects. If the market does not see a need for it, and cannot find the financing for it, then don’t do it.

The millennium project is being run by Peter Mandelson, Minister without [intellectual] Portfolio. Those people attempting to undermine political government should simply replay a few of his television interviews. These are enough to turn off anyone outside of politics who does still believe in political government.

Sleaze: financial and sexual misbehavior by politicians including expensive redecoration of government offices, trips to Disneyworld for Millenium Dome ideas, replacing a minister’s wife with his mistress on official business, the Paymaster General in charge of all government spending with his tax-free offshore investments and so on and so on.

The Covent Garden Opera House debacle. Labour bails out the mismanaged national opera house- this elitist art incurs costs out of all proportion with the interest in and attendance of the general taxpaying population. Once again, the government taxes all to benefit a few.

Fans must reclaim soccer. The ridiculous rhetoric from a left-leaning think tank is that football clubs should be more oriented to supporters of the clubs. The teams should have representation by fans on their board of directors and create a new regulatory body to "stand up for the rights of fans as consumers and give them value for money." (Financial Times, 15 SEP 97).

This is just another example of the anti-business, pro-consumer bias of socialists. Soccer clubs are some of the most customer-oriented businesses that exist- the players perform openly in public with vocal pressure from fans to perform well. Fans do not hesitate to shout out what they think in no uncertain terms and their word is increasingly heard and acted upon. The need for formal mechanisms is populist folly. If only politicians were so openly accountable to the paying public as the football teams and managers are. If the house of commons was more like a football stadium, we might then get to hear some independent viewpoints from Labour members of parliament.

Labour really does not understand the arts. It subsidizes art because it is supposed to demonstrate the creativity of British people. It is an expensive and futile way of trying to justify the existence of a nation state.

EMPLOYMENT

The proposed introduction of a statutory minimum wage. This increases the cost of employment for low paid workers, thereby pricing the very workers out of work that it was intended to help. Blair’s political justification is that every other country in the civilized world has a statutory minimum wage (Speech to Parliament, 18 FEB 98). This is the routine refrain of outmoded collectivist institutions such as trade unions- Europe has it, therefore so should we. Governments are always basing policies on the lowest common denominator or the worst case scenario.

The introduction of the European social chapter of work regulations. This increases the indirect costs of employment, by giving, for example, part-time workers the same employment rights as full-time workers. This increases the cost of employment of part-time workers and thereby reduces the employment options for the lone parents that Labour claim to want to get back into work.

The EU working time directive did at least cleverly give workers the legal right but not obligation to take paid annual leave and protected them from being forced to work excessive hours without their agreement. It changes the balance of power, but not necessarily the behavior- protecting only those employees that need protecting from immoral employers.

The welfare to work program, billed as the UK’s "New Deal" (See http://www.newdeal.gov.uk). This is Labour’s attempt to subsidize job creation for young people under 25.

By mid-February 1998, only 800 employers had signed up for the New Deal - or more accurately were signed up- with the government exerting influence on the country’s largest companies to "encourage" them to sign up. Think of all the hundreds of thousands of businesses operating in Britain. Yet, the government propaganda in the "New Deal" television commercials claims [at the cost of '11 million of taxpayer’s money] something like "If a dozen companies sign up, they’ll call it a cult, but if thousands sign up they’ll call it a movement". Looks like they have a cult then. The worst thing is the misleading advert that implies that thousands have already signed up by showing images of a crowd of people totaling that number.

Such policies are more trouble than they are worth in a booming economy where companies have the incentives through labor shortages to create jobs anyway. Technology tools exist that allow all individuals (including young people) to access opportunities- with or without corporate membership. As someone rightly said in the debate on this issue- only the real economy can create real jobs.

The first full Labour budget in March 1998 and the green paper on welfare reform "A New Contract for Welfare" released shortly afterwards. Both are supposed to be radical. However, as with the other Labour policies, the rhetoric spoke louder than the reality. There is nothing wrong with the principle of encouraging work and discouraging dependency on state benefits by ensuring that work always pays more than benefits, but there is nothing new in it either and little beyond tinkering to actually achieve it. The availability of a tax credit to pay up to three-quarters of the costs of child-care for parents going to work is a good idea- removing a cost obstacle to work for those who want to and conferring a state benefit only on those who choose to work.

Increased trade union rights. Under an imminent government white paper "Fairness at Work", companies are expected to be forced to recognize trade unions if a majority in the workforce wants this. A Department of Trade and Industry (that unnecessarily helped a small private company I know to establish itself in the US) consultation document proposed forcing employers to consult workers before laying off even one employee.

For a labor party, the British government cannot think clearly and act consistently on employment issues. They subsidize jobs on one hand through welfare to work and then increase the costs of employment through employment and wage regulation.

ECONOMIC MANAGEMENT

Labour handed over control of interest rates to the Bank Of England early in its term of government. This should help to at least partially de-politicize interest rate decision making. However, Labour’s first financial mini-budget in July 1997 had an anti-company, pro-consumer bias. The mini-budget didn’t deal with the boom in consumer spending, leaving higher interest rates to do this job (there were five increases in Labour’s first year in office) and thereby damaging the business of exporters by increasing the price of exports by increasing interest rates. The government cannot understand, control and manipulate the exchange rate now, under unilateral control of a free-floating rate, yet it thinks it can do so when it is forcibly interdependent within a single European currency. Someone should tell the government that ten idiots do not make a genius.

TRANSPORTATION

The previous Conservative government privatized British Rail, the national rail company. The Labour Party opposed this policy in opposition and continues to oppose it in power. They are not going to re-nationalize it, just criticize the private sector as much as they can. I am a frequent (weekly) rail user and can vouch for the fact that the service has not noticeably changed since privatization apart from the livery on the side of the trains. My local station even has a computer that tells staff in real-time the estimated arrival time of trains. This must be progress! Yet, many people who do not use the trains regularly are more than willing to take the worse case scenarios of train delays and cancellations and decry the entire rail privatization policy.

The fact is that the private operators have committed to investing billions of pounds (this is an obligation that is built into their operating licenses). This investment in track, stations and trains will go some way to reversing the decades of under-investment from the public sector. It will take time to reverse this deficit- but it is happening and will happen because it is in the interest of the private sector to serve its customers well.

For example, I took the Virgin cross-country train on the first day that Virgin took over the franchise and joined the first day club. I now regularly receive special offers and promotions through the post. Virgin has committed to spending 1.8 billion pounds on tilting trains to speeding up the journey from one end of the island to the other.

Despite the government’s opposition to privatizing the rail network, they are (rightly) doing exactly the same with the London Underground train system. Even the separation of ownership of track and trains is being replicated. How can the government oppose one and yet support the other? The answer is simple: Labour suffers from double standards and no moral backbone, it is engaged in political posturing and spin doctoring.

CONSTITUTIONAL CHANGE

Devolution. This involves setting up separate Scottish and Welsh national assemblies- national institutions staffed by government officials. The problem with these talking shops is that they introduce another level of government bureaucracy, with all those transaction costs coordinating between them, let alone in them, and the public officials who staff that institution soon start demanding actual powers- this is what happened with the European Parliament. As with local government- if you give an official body a mandate, they will find something to spend (waste) public funds on locally.

More constitutional tinkering is proposed in the form of an elected major for London, the capital city in England. The major would have limited powers but would be supported in carrying them out by an elected assembly! Another talking shop- another organized institutional structure whose costs and implications do not justify any (unspecified) actual benefits to Londoners. The main advantage seems to be that it is fair for Londoners to be able to vote about local issues. But as if London issues do not get enough attention anyway, with all the parliament based there.

SUMMARY

All that we have seen from the Labour government is a step-by-step gradual reintroduction through the back door of traditional socialist interventionist policies- expensive and ineffective. There is no radical agenda for interventionists on the left anywhere in the UK, the US or anywhere. The socialists do not debate how to downstructure government or some other radical political agenda. Instead, they scheme about how to present and "spin" their agenda in a way that allows more intervention without it costing more, or how to intervene in indirect, subtle ways that do not attract the attention of the voting public. They commit to not increasing taxes, whilst wasting any increased taxation income on higher spending rather than lower taxes.

At least the last lot of Labour politicians stood for something other than popularity. Flawed those rampant socialists were- but at least they did not hide their intentions. This current lot of spineless politicians pursue some non-existent middle way. They are passionate in their desire to help, but also futile. Most voters in Britain I speak to express relief that it could have been worse- but should that be the only positive thing we can say about politics these days?

For a government that has repeatedly stated its commitment to "modernization", Britain after its first year under the socialist Labour government has only gone backwards:

Every day, Britain becomes more of a nanny state with regulation through the back door

The labor market measures are costly to both employees and employers- they benefit no-one

Arts are costly the British taxpayer a lot whilst delivering little if anything in return

Market-oriented reforms to the health and education sectors such as vouchers and internal competition have been abolished- state interference and spending is higher than ever- and value for money falling

So alas, the reality in Britain deviates substantially from the rhetoric. Britain is not cool, and any success is precarious. The sound economic basis of the British economy- its low unemployment ("just" 1.3 million people)- is overwhelmingly the result of the free-market oriented policies implemented by the previous Conservative government. The reality is that as usual, any economic success in Britain has been achieved IN SPITE of the government, and not because of it. Britain may look relatively healthy compared to the rest of Europe- but that is hardly difficult.

Tony Blair is the worst kind of politician there is- a wolf in sheep’s clothing. For example, on the one hand he was negotiating between the royal family and the public over the death of Diana, princess of Wales, and on the other, he was reintroducing abolished trade union rights. He looks good, and says the right things, but his actions don’t share the same characteristics. Does that sound like any politicians in your country?

The Labour government’s rhetoric says "Cool Britannia", the reality is "Nightblair on Downing Street".

 

(For general information on unorganized political philosophy, see "Unorganization: The Political Handbook" at https://www.unorgan.com/socpol.htm)

 

Author: Simon Buckingham

What do you think?

To make a comment to the author, send e-mail to simon@unorgan.com