Ed Miliband is right. New Labour is dead.
There is much to praise about some of the decisions taken by New Labour. Gordon Brown was right to triple NHS spending and double education spending. This is the best way of improving public services. The extra teachers, nurses and doctors have transformed the public sector into a vibrant and successful arena to work in. The system of tax credits for hard working families has catapulted previously trapped mothers up the social mobility ladder. Moreover, introducing EMA created an incentive for young adults to stay within the education system in our effort to create a knowledge based economy. In addition, maintaining low VAT meant that indirect taxes were curbed under New Labour. Improving the pension, winter fuel payments and free travel for our elderly means that we can realistically claim to have been on the side of pensioners once more. Economic interventionism, means tested if need be, was a wonderful improvement on the Tory era. Furthermore, opening thousands of Sure Start centres and introducing maternity/paternity leave mean that we should be proud to have advanced a more pro-women economy. Importantly, giving the people of Scotland their own parliament fixed one the great wrongs of our constitution. Finally, the dawning of peace in Northern Ireland and the Good Friday Agreement could only have been achieved with Tony Blair on board. These are the aspects of New Labour that will forever be in our affections.
It should not go unsaid that Gordon Brown did fix the roof while the sun was shining. He gave the Bank of England independence so that it could set interest rates. This aided in abolishing the inflationary cycle which was perhaps Gordon Brown’s finest achievement. The debt interest payments today are 30% lower as a proportion of government spending that they were in 1997. This at a time when GDP exceeded the other G7 countries makes the achievement all the more remarkable. The UK was in decline during the Major era but was back in the ascendancy by 2007. The unforeseen global economic crisis has affected all countries and must be considered in any judgement of the success of New Labour economics. That aside, we should be proud of our economic record.
1. Third Way Economics
If I think New Labour was so great, why am I keen to make sure it is dead? Well, the thing is that Purple Labour does not get it. Blair’s light touch regulation meant that we did not keep a close eye on the banks. Brown by his own admission should not have left the FSA to its own devices. Mandleson's comfort amongst the filthy rich whilst the wealth gap widened seemed so trendy before Fred Goodwin and others were hung out to dry. Gordon Brown negligently allowed consumer debt to grow in full knowledge that it was unsustainable. The New Labour economic model failed. The wealth gap grew and the minimum wage, though a noble concept, lags behind most other European countries. The inflated property boom increasingly trapped young adults and families in private rental housing, that more often than not was dangerous and unfit for human habitation. To avoid the dot.com crash, New Labour encouraged consumers to borrow on the back of rising house prices. It was self-evident that this was unsustainable. We did not abolish boom and bust. A person on the minimum wage has less than £10,000 to spend per year. At a time when it costs on average £8k to rent a property, there is no standard of living for those on the C2 social grade who rightly feel abandoned by New Labour. We papered over the cracks of Thatchernomics, put a friendly face on it and hoped everything would be all right. It was not. And it is not. There was a systemic and regulatory failure that shows no sign of having been healed. A new era of ethical economics beckons. It was the economic model that failed, and that is the point that Third Way Economics fails to grasp.
2. PFI and Public Service Reform
New Labour’s choice agenda simply drove up costs for the consumer and the tax payer with no tangible benefit. Academies started the ball rolling on encouraging a hierarchy within the secondary school system. Tuition fees of £1k in 1999 provoked a moss stone that has aspiring students today facing extortionate fees of £9k. Let’s not forget that it was Mandelson who commissioned the Browne report with an explicit remit to look at charging higher fees. In 2003, Blair and David Miliband conspired to open ‘foundation’ schools in partnership with businesses by using Private Finance Initiatives. Funding construction with private finance must only ever be a last resort when no public borrowing options exist but all too often it became a preferred method of investment. With the introduction of beacon Schools and academy schools New Labour made the Tories job easy when it came to introducing Freedom schools or extending Academies to include ‘Outstanding’ schools. Today Michael Gove cherry picks our best schools and removes them from LEA control but it was Tony Blair who first envisaged this. Much that the Tories are doing wrong can be traced to the doorstep of New Labour. The constant reforms of the NHS made the instability and chaos a way of life for the staff. Foundation hospitals and Primary Care Trusts instigated a post code lottery that the Tories are now exploiting. In all of these cases, the cost went up needlessly. The marketisation and consumerisation of our national pillars of state are unnecessary and expensive. A hospital should be a hospital and a school should be a school. Radical politics and change are two wonderfully glorious concepts but not when they are used to tear down the welfare state. It is hypocritical now to oppose and criticise the Tories for their efforts to dismantle the welfare state, when it was Byers and Milburn who opened the door for them to do so. Michael Gove and Andrew Lansley are pushing against an already open door. We must bolt that door shut, and throw away the key. There is no shame in being ultra-conservative about our NHS, it is a treasured institution. What else are you supposed to do with something as valuable as that? If is there be any radicalism in the NHS let it be in the development of new treatments and medicines, not in the creation of new structures or internal reorganisation. Blair was wrong; a reverse gear must always be an option when an ill-judged reform turns sour.
3. Liberal Interventionism
Liberal interventionism is an oxymoron. Invading Afghanistan and Iraq, whilst ignoring the right of the Palestinians to their own state was inconsistent. You do not seek to interfere with another region that is both outside your sphere of influence and alien in terms of culture and society. We don’t understand the Arab world and we have no right to police it. This led to the demonization of a range of Muslim countries and created the impression that UK foreign policy was a reincarnation of the ideas of Pope Innocent III. Violence breeds violence and there is no doubt that the July 7 bombings would not have happened had we not interfered in the Muslim world. That Rwanda, Darfur and the Congo was left to utter savagery while we fixated on oil rich countries sent out the wrong signal to countries who are favourably pre-disposed towards us. The Muslim world seeks to build commercial and cultural ties with us, not war. Thus, there is no axis of evil, democracy is not a religion to be evangelised but instead an idea that should be constantly renewed and improved upon.
4. Tough on crime
Crime fell by a third under Labour, but worry about crime soared. This is because our method of treating a prisoner was inadequate and so too many of them re-offended. The type of crime we see in the UK is clearly linked to poverty. For example, 70% of the offences committed in the UK are property related and only 9% are violence against a person resulting in injury. We need to be understanding on crime, and brutal on the causes of crime. The 40% rate of reoffending masks a much higher rate of reoffending among our youth. Nearly 70% of young adults reoffend. In fact, thieves reoffend on average 87 days after being released from prison. We are 40% more likely to jail blacks for the same crimes as white people, and just 25% of prison expenditure goes towards rehabilitation. There is no point in paying £40,000 to house a felon per year, when tagging them or treating their drug problem would save you £125,000. Labour was right to build CCTV, right to invest in databases such as contact point. Labour should be proud of its record on crime deterrence and crime detection, but we collectively should be thoroughly ashamed of or methods of rehabilitating offenders, the vast majority of whom become institutionalised and develop mental health problems. The prison population should not be doubling while crime is falling by a third. Michael Howard was wrong, Tony Blair was wrong. Prison does not work.
Conclusion
As we put New Labour behind us, Ed Miliband, Ed Balls, Sadiq Khan and others must be giving the time and space they need to steer Labour on the right course for victory in 2015. This will not be easy, nor with hard work bear fruit over night. For now, the main challenge is to make sure New Labour stays dead and does not come back. They were yesterday’s men. The next election will occur 21 years after Tony Blair became leader of Labour. Many of the voters deciding a future government in 2015 will not have been born when Blair achieved election victory in 1997. He is the past. Ed Miliband is the leader of a new [not nuu] Labour generation.
