On Thursday I was debating the Blair years at the Cambridge Union. Hazel Blears put up a spirited defence of the Labour government. She said that when Labour arrived in power her own town was run down. By the time they left office it had new schools, a better hospital and other improvements from enhanced public sector investment.
I am glad her town benefitted from some of the massive spending and borrowing Labour undertook in office. I guess if there had been a Conservative government they too would have spent a lot of extra money on her area. Conservative governments, like Labour governments, traditionally spend much more of our money in Labour areas as they agree there is more need there than in the more prosperous Conservative parts of the country. I also agree with Hazel, unlike some of the people who write in to this blog, that the public sector can and does contribute to national output and wellbeing. The output of a public sector hospital or school is as much a part of national output as the output of a private sector school or hospital.
The missing parts of the Labour discussion, however, revolve around two sets of issues.. Why didn’t the large expenditure of money in the poorer areas lead them to catch up with the richer areas? Why did inequalities expand rather than contract? Why did London continue to outperform the areas attracting the most public spending? Secondly, don’t we need a bit more balance in public spending? Whilst I do not begrudge Hazel her new schools and better facilities, there was no evidence of anything similar in my area. By end of the Labour years we had grossly overcongested roads, and a shortage of school places, with a large backlog of building maintenance and replacement in the public sector.
The truth is the Blair years lived on credit too greatly, leaving us with a huge problem of paying the bills and repaying the debts which will continue to haunt us for some years to come. The Blair model of public sector led spending gave some help to the areas that benefitted most from it, but failed in the main to encourage a productive private sector to take off and generate lots of new private sector jobs in the poorer areas of the country. The public sector was not uniformly favoured either.
We are entering the long rebalancing. To make other areas as rich as London will require much more private sector led growth in them. To regenerate the whole public sector, and not just favoured parts of it, requires reform as well as fairer funding.