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 â€œbuild for the futureâ€; to â€œreform public servicesâ€, and to â€œsteer our economy through difficult timesâ€. He wishes to govern as â€œNew Labourâ€, in a clear recognition that the Blairites are very restless within his party, and â€œMiddle Englandâ€ has largely deserted him, when many more of them were more sympathetic to Blairâ€™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 â€œtough choicesâ€ 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 Brownâ€™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 heâ€™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 Labourâ€™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 Â£100 billion of a single bankâ€™s liabilities onto the governmentâ€™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 UKâ€™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 todayâ€™s problems.