The 1980‘s destroyed the credibility of socialism as an economic program. To survive, Labour urgently needed to re-invent itself. So the ‘economic’ was to be replaced by the ‘cultural’ revolution. Britain’s working class were to be abandoned as punishment for voting for Margaret Thatcher three times in a row. In their place, a new Labour voting client base was to be created at the taxpayers expense, comprising a rainbow coalition of ‘victim’ groups and welfare dependents, to be patronised by an ‘enlightened’ elite of public sector executives, quangocrats, human rights lawyers and managers of politicised charities. ‘Equality’ and ’Social Justice’ were to be the watchwords of the new revolution.
Since the early 70’s, Labour’s activists had been engaged in a ‘long march’ through the cultural institutions of the British state. By the early 90’s, they had their people in the key positions necessary to implement radical social and cultural change in Britain and Tony Blair was the perfect figure to deliver it.
It was essential that the true purpose of New Labour be kept hidden from the British electorate. The Conservatives reputation for economic competence had been shattered when the Major government almost bankrupted the country and put thousands of small firms out of business by his desperate attempt to keep Britain in the forerunner to the euro, the ERM. By 1997, the British public was ready to accept that ‘New’ Labour could be trusted with the economy more than the Conservatives. Tony Blair, with his smart, well spoken appearance seemed in many ways to be a more ‘Conservative’ figure than his opposite number. Incredible though it now seems, who better to look after your money than Gordon ’Prudence’ Brown, self-styled ‘son of the manse’ !
Up until the 2008 crash, the British public were anaesthetised by a false credit boom. Bank lending, government borrowing and private credit were allowed to let rip, creating the short term illusion of economic prosperity, while all the while storing up massive debts and problems for the future. By 2007, Britain’s trade deficit had risen from £12.3bn (1997) to £83bn. Under Labour, Britain became an nation of consumers not producers, fuelled by a tidal wave of credit card debt.
Labour had never really understood wealth creation, so it was decided simply to let the banks and big corporates ‘get on with it’, with catastrophic consequences that could and should have been foreseen. Gordon Brown had promised to abolish ‘boom and bust’ (well he was half right). The 2008 financial crash (RBS/Halifax, Northern Rock) was quickly followed by the ‘credit crunch‘ and the biggest peace time recession in UK history. The long suffering UK taxpayer was forced to ‘bail out’ the banks and pay them for the cost of their irresponsibility.
Having promised in their 1997 manifesto to be ‘wise spenders, not big spenders’ Labour did precisely the opposite, embarking on a massive public spending spree. Government borrowing hit a record £151.7 billion in Labour’s last year in office, with the national debt doubling to £1,000,000,000,000 (one trillion). When Labour was finally kicked out of office in 2010, their Treasury Secretary left his Tory successor a childish note: ‘sorry there’s no money left; we’ve spent it all’.
Much of this extra spending was wasted; the NHS being a prime case in point. Although Labour increased health spending by 87% between 1997 – 2010, huge sums were wasted on bureaucracy. The number of NHS managers doubled to 40,000 while the number of beds fell from 250,000 to less than 180,000 (half the number of hospital beds per head than France, Holland or Germany). £11bn alone was wasted on a failed computer system. Spending on NHS managers rose from £130mn (1997) to over £1bn (2010); an increase of 450%. By 2010, NHS ’spin doctors’ were costing £46mn; enough money to pay for 1,662 full time nurses.
Between 1997 – 2010, Labour signed more than 100 Private Finance Initiative (PFI) contracts on behalf of the NHS, at an immediate cost of over £70bn. The PFI was a clever wheeze by Gordon Brown to get private companies to provide services and infrastructure for the public sector and so keep very large sums of money off the accounts for ‘public spending’. Their contracts have made the private companies running them, very rich. For the NHS though, the long term consequences have been disastrous, As well as paying back around seven times more than what the PFI services actually cost over the next 20 – 30 years, the taxpayer pays these firms huge sums to run them, far more than what they‘re actually worth. The contracts tie the NHS into paying large annual fees which will cost over time at least £300bn to repay. The NHS has to shoulder one third of this cost. Now they’re unable to pay their debts, NHS hospitals are forced to cut frontline jobs and services instead.
Under New Labour, many experienced staff quit the NHS in disillusionment. In 1997, 3400 nurses and midwives had left the UK. By 2008 this had more than doubled to 7772, most citing low morale, poor working conditions and better prospects overseas. By 2010, the NHS was having to spend around £800mn pa on agency nurses and faced a shortfall of 14,000 full time nurses. By 2010, more than two-thirds of GPs considered that all the extra money spent had brought no improvement at all in patient care. By then, GPs were leaving the NHS at over 100 a month.
Meanwhile there seemed to be no limit to Tony Blair’s megalomania on the world stage. Prof Cox and his ‘Cool Britannia’ chums had hardly finished bouncing around to ‘Things Can Only Get Better’ when they got considerably worse, and the bombs began dropping on Kosovo, Afghanistan and Iraq. From being a country that was once respected by most of the world, Britain was now hated by many and had become a major terrorist target.
(to be continued) ………..