Anniversary reflections for Gordon

The Prime Minister can today reflect on the first anniversary of his victory in the Labour leadership election. It would be a good time for him to dwell on what has gone wrong. It would be an even better time for him to be positive about how his second year as Leader could be so much better for the country than his first has been.

In a defensive statement this week about why he should stay as Leader, he made three claims. He said he was the man to “build for the future”; to “reform public services”, and to “steer our economy through difficult times”. He wishes to govern as “New Labour”, in a clear recognition that the Blairites are very restless within his party, and “Middle England” has largely deserted him, when many more of them were more sympathetic to Blair’s self-styled New Labour approach.

The first big change Mr Brown needs to make is to stop spinning by the day, and to start governing by the month and year. Making things happen in government takes tenacity, consistency and patience.The best policies do not necessarily poll well at the beginning, and may require “tough choices” and frequent explanation before their beneficial effects are felt and appreciated. Telecommunications privatisation was one of the best policies the Thatcher government introduced, leading to the mobile phone revolution, bringing the costs of telephony down to suit the pockets of most people. It democratised the phone and humbled the monopolist. It led to many more jobs and a surge in tax revenue from the sector. It was deeply unpopular when we launched it, and polled badly. No serious party now wants to reverse it. Mr Brown’s three reasons for keeping him in, at the moment, so much hot air that they are in danger of becoming stale air. If they are his brand, then he has to start living his brand.

Building for the future

If he wants to show progress under this heading, there are three obvious areas where he could do so.

He could stop talking about the UK building new power stations, and bring in the licences and permits needed so the private sector could get on with their construction. He has promised faster planning processes and streamlined regulation. He has said he wants the UK to build a new fleet of nuclear stations. Well then, get on and do it. If he’s had second thoughts, then get on and order the construction of other types of station. We need them, and we need them soon. Ten years have been wasted. The preceding Conservative government supervised the construction of a large amount of combined cycle gas power, which is the main reason we can hit our Kyoto targets. What does Labour have to show? Most of us will only believe it when we see the foundations being dug.

He could recognise the chronic lack of capacity on our main transport networks, and issue the permissions and permits for the private sector to build more capacity. In the short term, he could order a review of impediments to use of both the road and rail networks, and instruct the relevant authorities to take simple actions to use existing capacity more effectively. Again, over the last ten years, practically nothing has stirred. The government has presided over the building out of the Channel tunnel rail link and the private-sector Birmingham M6 relief road – schemes it inherited. What is it going to have to show for its tenure, other than the country grinding to a halt?

He could back the decision by Ofwat to support full competition in the water industry, to start tackling our shortage of capacity in this basic requirement. He should want to see reservoir construction and pipe renewal well underway before the General Election, as this is the neglected monopoly whose prices and service quality are not satisfactory.

Reforming public services

The biggest let-down for many, over the last 11 years, has been the discovery that spending eye-watering sums of money on schools and hospitals has not led to the improvements in quality and access many hoped for. All too much of the money has disappeared on central and regional bureaucracy, on elaborate and sometimes botched IT schemes, on large pay increases, on endless consultancy contracts and on a glossy-brochure industry in overdrive.

In education, he should continue to drive to create different kinds of schools, building on the City Academy scheme. He should welcome in new providers and relax the central and LEA controls. If he really is New Labour, he should go for parental and student choice that is effective. There are Scandinavian models for these, which may prove more palatable to his party.

In health, he needs to intensify the drive to offer choice and to provide the range of care, in a variety of different institutions, that the public need. The single-monopoly District General Hospital is remote from many of its users, is often an infection centre, and may not have specialists performing the same routines every day so that they become really expert at them. We do need the specialist clinics and smaller units, with the radical idea that sometimes the doctors should travel for the convenience of the patients, rather than the patients having to travel for the convenience of the doctors.

Steering the economy

The very area which the PM sees as his strength, and Labour’s trump card, is now their joint Achilles heel. It is the most difficult area of the three to get right from here, the one where there are no easy choices.

The UK economy is now in one of the weakest positions to respond to the international Credit Crunch, and has its own version of the Credit Crunch, which has been been made far worse here by the bungled handling of Northern Rock. Only the UK has put £100 billion of a single bank’s liabilities onto the government’s balance sheet, and only the UK has the government sacking staff and halving the activity of one of its larger mortgage companies. The UK has a very large government deficit, a large balance of payments deficit and high consumer borrowing. As it now has a rattled Central Bank, which lurches from extreme Puritanism to making large sums of liquidity available, it is especially vulnerable to disappointing performance and a more miserable outcome on both growth and inflation.

If the Prime Minister wishes to meddle here to try to salvage his reputation, there are three things he needs to do immediately:
1. Restore the power of the Bank of England, which he destroyed by his 1997-8 reforms. He should give the Bank back their banking regulation and debt management, so they understand the day-to-day business of the money markets. He should tell the Governor and his team to speak less, and to speak more wisely. What ever was the point of the Governor last year telling us there would be no bank bail-outs when he must already have known of the problems at Northern Rock? Why did the Bank allow papers yesterday to run the absurd story that there would be no interest-rate cuts before 2010? Those will be more words they have to eat if they wish to get out of the Credit Crunch.
2. Start squeezing bureaucratic spending by imposing an administrative staff freeze, a freeze on new IT and consultancy contracts, a stop to most new regulation, and by resisting claims for yet more programmes or projects, based on public money. The UK’s economy will not come good until public spending is brought under proper control. Shifting more higher public-sector pay into performance-linked, where the payments are made only if efficiency rises.
3. A deregulation bill which strips out substantial regulatory cost from business, as a surrogate for a further business-tax reduction.

I fear none of this will happen. The government seems well set in a disastrous pattern of stunts, press conferences, bodged launches and internal strife. If all it is going to do is to dance to the media tune, it is doomed, and the country will continue to be badly governed. We need a government which will truly do something for the longer term. That means seeking to amuse the media less, and trying to deliver more. Good government is not all about media appearances and news launches. It is about the daily grind of trying to get the official machine to do something efficiently and well, to improve the condition of the country. When you have been in government for more than ten years, words cannot solve it. You will be judged by your cumulative deeds, and by whether you have vigour and purposes left to tackle today’s problems.

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11 Comments

  1. Posted May 16, 2008 at 10:47 am | Permalink

    It wasn't even an election 'victory' in the first place for Brown – all his serious competitors decided to let him lose in 2010 and fight for the leadership after the next election instead.
    http://lettersfromatory.wordpress.com

  2. Posted May 16, 2008 at 11:18 am | Permalink

    It is very encouraging to see a leading politician raising the critical and immediate issues of energy supply and transport provision which are ignored as "too difficult" by so many.

  3. Acorn
    Posted May 16, 2008 at 11:40 am | Permalink

    John, while agreeing with you, I think you may be asking a Leopard to change his spots. I have doubts that even a Conservative government could deliver your agenda. Power corrupts etc etc.

    The prime directive of a socialist administration is to control everything from the centre. It always wants to be both the purchaser and the provider of everything. The family is the enemy of the state, because the selfishness inherent in family structures detracts from its allegiance to the state machine. The capitalists – all private sector employers – are all crooks by definition, exploiting the working class. I think the last ten years have proven this in spades.

    The fact that the economy has done reasonably well over the last decade was despite Brown’s chancellorship, not because of it. He was surfing the wave of globalisation and deregulation that was started in the Reagan / Thatcher era. We are all now aware that Brown only looked good because he was maxing out the public sector credit card and, got very poor value for money. Pouring money into an unreformed, heavily trade unionised, public sector was fatal, a natural consequence of the state being both purchaser and provider.

    The only government I will be voting for next will be the one that shows me, how it will roll back the state in pound note terms. Shows me it has a way to reduce spending from 44% to 33% of GDP. Shows me how it will put local (government) spending closer to local taxation; and, national spending specific to national taxation.

    Shows me how it will democratise our Quango state, putting most of it back into a unitary local government system that the citizens can understand and feel they belong too. Lets me spend a whole day without being monitored, breaking numerous rules and regulations, that I never knew existed.

  4. Arnold Attard
    Posted May 16, 2008 at 4:06 pm | Permalink

    Well, seems to me that you, rather than Brown will have to carry out New Labour's agenda.

  5. mikestallard
    Posted May 16, 2008 at 5:38 pm | Permalink

    I am with Acorn on this. He is not listening to sense, just mouthing platitudes.
    However there are some things which he could do – remembering he's broke.
    You are so right about nuclear power. If only he could see it. Unleash the planning permission. Otherwise, as in South Africa, the lights will go out. I suppose that is "selling out to globalisation"?
    What about things he does control? Like the Army. He doesn't cherish it. He just makes it look cowardly. Labour inherited the best army, for its size, in the world. Now look at it! All it needs is a little love.
    Or the Police? He controls them now. So why aren't they on the streets?
    He could do all these three without spending any money at all.

    By the way, I like the pictures – you are lucky to have such a good photographer in your constituency! And, of course, well done for using your own people.

    reply: Thanks

  6. DiscoveredJoys
    Posted May 16, 2008 at 8:52 pm | Permalink

    If a political party came up with at least some of your suggestions to address the infrastructure issues, they would get my vote.

    Why didn't the Labour Party do so when they had the chance? My suggestion is that they just do not understand how government can be made to work. They think it is 'magic', just mutter a few impressive sounding 'spells' and 'poof', it happens. Except it doesn't, of course.

    For a long time Blairini, and his unglamourous assistant Gordon, were able to entertain the punters using exagerated gestures to distract and misdirect. Even when the 'tricks' didn't work and the Weapons of Mass Destruction failed to appear, everyone was having such a jolly time that the act carried on.

    Now that unglamourous Gordon has taken over his lack of skill in judging the audience has meant that they have now realised that all they have to show for some very expensive tickets is some sparkly confetti and some faded paper flowers.

  7. Steven_L
    Posted May 17, 2008 at 2:03 am | Permalink

    I'm interested in the idea of a deregulation bill and wonder which area it would primarily focus on.

    In my experience business people seem to have more gripes against tax and employment law than any other area of regulation.

    Tax is under national control but much of employment law, such as minimum harmonisation on health and safety at work, comes from the EU.

    I also believe that if deregulation was to focus on the tax system that this should not only look at businesses but also at simplification of the complicated tax and benefits system in terms of individuals.

    Reply: See the detail in the deregulation chaper of the Economic Policy Review (available under downloads on this site)

  8. Acorn
    Posted May 17, 2008 at 12:25 pm | Permalink

    John, having read the "deregulation" part of the your policy review, the "regulatory impact assessment" proposal sounds just what is needed.

    But, I was under the impression that the "Treasury Green Book" was invented to do exactly this type of assessment. Does this not happen? Does there exist a spreadsheet somewhere in government, that tells the results of financial impact of primary and secondary legislation? That is, the cost of operating it and the cost of complying with it; is it doing the job that was intended?
    http://www.hm-treasury.gov.uk/economic_data_and_t

    Redwood fans may be interested in this system that appears to be working in Canada.
    http://www.regulatoryreform.gov.bc.ca/progress.ht

    Reply: yes, there are Impact Assessments at the moment, but they are often inadequate.More importantly they are not used to manage the amount of regulaiton. Our proposals would make Ministers reduce the total cost of regulation based on the Assessments.

  9. Rose
    Posted May 17, 2008 at 12:54 pm | Permalink

    I remember Margaret Thatcher saying if you read nasty things about yourself in the paper, however strong you think you are, it spoils the day and you don't do your job properly. So Bernard Ingham read them for her and only passed on what was useful. The reptiles hated them both for that, and never allowed us to forget it. But that was the last time we had good government, and her weak and media-obsessed successors have been running down the capital ever since. You cannot surf on the crest of a media wave for the whole of your term, and make the right decisions for the country. And if you live by publicity, you will die by it, slowly and painfully, as we are seeing again.

    Reply: Exactly! You need to kn ow the legitimate critisims of you and what you are doing, but you should avoid spending time studying the nuances of the press in a self obsessed way. If you get the policy and administration right the public will appreciate it, and the press will then have to follow.

  10. Bazman
    Posted May 17, 2008 at 7:57 pm | Permalink

    As I remember the Conservatives had The Sun, The Mail and many other papers supporting them whatever they did. Woodrow Wyatt and his often bizarre support of the Tories whatever they did, in The News of the World made me laugh as a teenager.
    Despite this support the Conservatives faced a whitewash. People like me suspected Thatcherism would lead Britain into the third world. Labour however were determined to control the publicity afterwards to the point of paranoia.
    An interesting documentary would be the most likely scenarios had the Conservatives stayed in power.
    Labour have wasted a lot of money for sure, but have put a lot of money into the economy. This cut and save method is an old Tory script that means often the most vulnerable in society take the weight. How much of the billions saved find their way into the pocket of the average Joe?

    Reply: Nonsense – Conservatives spend other people's money more wisely, as the record in local government shows. I have no wish to cut back on services or take money away form the low paid – unlike Labour with its 10p tax hike which I voted against

  11. Geoff
    Posted May 21, 2008 at 7:14 pm | Permalink

    As a doctor in the NHS I think you are spot on in what you say about the need to change health services.

    It makes me angry though that whilst you are right, so much of your party is actively campaigning against service changes which will improve care and save lives and backing the trade union, masquerading as a professional body, the BMA, in campaigning against 'closures' and 'downgrading' when really they hate change and competition.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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