Labour governments have always been imperialist, pro-business, racist and anti-working class. Apart from this, their principles are few and elastic, ever malleable to political contingency and the need to hold on to power. Blair’s Labour Party is no exception and, with a general election likely within the next year, it is rapidly adjusting its policies to the opinions and prejudices of the most backward and reactionary sections of the British middle class.
Memos, written by Blair and Labour’s private pollster Philip Gould in April and May and sent to New Labour’s inner circle, appeared in the Murdoch press in the days preceding Labour’s much heralded spending review. Designed to catch the headlines and overshadow the spending review, they give a real indication of the cynical manipulation that is at the heart of Labour’s project. Blair claimed that the government is somehow out of touch with ‘gut British instincts’ over core issues such as crime, patriotism, the family and the asylum crisis. On crime the government should highlight ‘tough measures’, on defence it needs to show it is ‘standing up for Britain’, on the family ‘we need eye-catching initiatives that are entirely conventional’ and on asylum ‘we need to be highlighting removals’. Blair said that he had to be personally associated with as much of this as possible. These reactionary ramblings were prompted by a Daily Mail editorial.
Gould goes further. He says that the New Labour brand has been badly contaminated. It has been ‘undermined by a combination of spin, lack of conviction and apparent lack of integrity’. The political strategy is wrong. ‘We were too late with the NHS; we raised expectations that could not be met in the first two years; we concentrated too much on competence and delivery’ and ‘neglected values, messages, instincts and empathy that served the party so well in opposition’. New Labour, Gould says, has appeared ‘soft on crime, not pro-family and lacking in gut patriotic instincts’ – by which he means the gut instincts and reactionary prejudices of ‘middle England’. The government, he says, has to get on message if it is not to lose its massive majority at the next election. Labour’s spending review is deliberately packaged to address these concerns.
The spending review
Chancellor Brown’s luck has held out. Faster than forecast economic growth, high tax receipts, lower social security spending and a £4.5bn underspend last financial year have produced a higher than forecast budget surplus of £20.4bn. In addition, an extra £22.5bn was available from the recent auction of mobile phone licences. Government spending was 37.7% of GDP at the end of 1999-2000 – even lower than expected at time of the budget in March – and was 3.5 percentage points lower than that inherited by Labour at the 1997 election. Yet Brown refuses to break with neo-liberal monetary policy (prudence) and seriously tackle poverty and the rapidly deteriorating public services. Despite an increase of public expenditure of £43bn over the three years of the review – unlike the 1998 review these figures have not been manipulated to appear higher than is actually the case – spending in 2003-04 will still be lower as a percentage of GDP than it was immediately before Labour won the election. Government spending in 2004 is expected to reach 40.5% of GDP, less than in all but three years of Tory governments between 1979-1997 and well below European levels. Despite this the government still saw fit to pay off £18.1bn of debt last year, more than any government has done since the Second World War.
Over the period of the review, government current spending will grow at 2.5% a year, the same as that predicted for the economy overall. Capital spending – investment in an ever deteriorating public sector infrastructure – will more than double, bringing total government spending (current and capital) to 3.25% a year. In spite of this doubling of capital investment to 1.8% of GDP, it will still be well below past levels of investment, over 5% in the early 1970s.
Health and education will receive about half the increase in expenditure and a further 20% has been designated for transport, housing and law and order. All departments will have to comply with targets set by the government if they are to receive the increased budgets. The last spending review set 380 targets, this one has around 200. It is Labour’s way of harassing public sector workers and improving ‘efficiency’. The claim that all but three of the targets from the last review were met is patently absurd given most people’s experience on the ground of ever deteriorating public services.
Wooing ‘middle England’
Transport investment will double over the period of the review – a real rise of 20% a year until 2004. In addition, Prescott announced that during the next 10 years some £180bn will be invested in transport. More than £120bn of public and private money will fund rail schemes, 360 miles of road widening, 100 bypasses and around 25 light railways. A further £60bn will subsidise loss making train and bus services and keep the appalling privatised companies and their millionaire directors in business.
‘Transport is a middle England issue’, according to a Downing Street insider, ‘they can buy better education and health services, but they are all trapped on the same late trains and traffic jams as everyone else’. The transport package is designed to appease them. Hence the cynical return to the car culture with road widening and bypasses back on stream.
Health and education are, of course, very much ‘middle England’ issues. Paying for private health care and education puts a serious strain on middle class budgets and an adequately funded and relatively efficient public provision has to be available. The number of individuals taking out private medical insurance has fallen by 4.5% after premiums rose by 10% last year, four times the rate of inflation. Britain has only around 150 doctors per 100,000 people (Cuba has over 500) and fewer doctors and nurses than any other country in Europe apart from Albania. The large increase in health spending will barely begin to address the issue given the shortage of hospital staff. The extra £12bn for education announced by the review, the biggest outlay for 20 years, will only bring education spending up to 5.3% of GDP. Yet it is argued that to keep up with technological developments some 12% of GDP needs to be spent. Inevitably we are seeing the creation of a two-tier system designed to serve the needs of the middle class.
The Home Office receives a real rise of 6.2% a year over the three years of the review with significant money designated for crime reduction – the ‘middle England ‘ issue. Prison building will increase to bring capacity above the present 70,000. Police spending will rise in line with the increase in recorded crime. Burglary and car crime will be targeted. Money will be given to buy computers to analyse crime data and share the information with health, education and social services.
An extra £400m for each of the next three years will go to the immigration service. It will have a target of returning 30,000 failed asylum seekers every year by ‘enforcing refusals of asylum more vigorously’ – a rise from the 7,650 last year. Decision times are to be cut from 18 to six months and there are plans to build three more immigration detention centres. A racist policy for a racist middle class.
Labour will ‘stand up’ for Britain. Defence spending will rise in real terms for the first time since the end of the cold war. The past cuts in spending meant that British forces were inadequately equipped for defending British imperialist interests in the Balkans, Ireland, the Gulf, Cyprus and most recently Sierra Leone. 90% of rapidly available military units are to be at a state of readiness by 2005. The increase is small but ‘middle England’ will take note.
Attacking the poor
Labour claims that it is helping the poor and the New Deal has assisted up to 500,000 into employment, including 216,000 young people. This is part of the spin. According to NIESR, an independent research organisation, only 13,000 jobs have been created as a result of the £5.2bn welfare to work programme. Likewise Labour’s recent annual review claims to have lifted 1m children out of poverty. The facts contradict this claim. Recent figures from the DSS show an increase in child poverty of 100,000 and overall numbers living in poverty rising by 500,000 during Labour’s first two years of office. Labour has increased inequality. The incomes of the richest 10% grew three times faster than the poorest 10%. The incomes of the rich grew at a faster rate (7.1%) than the last two years under the Tories (4.3%). The number of pensioners (not mentioned in the spending review) below the poverty line increased from 2m to 2.4m in Labour’s first two years of office.
Social Security spending will barely rise over the next three years. The New Deal will become permanent and cover all young and adult long-term unemployed, one million single parents and thousands of disabled people. Its aim is to drive the unemployed into low paid jobs or off benefits and reduce social security, the largest government budget. The DSS will be able to delve into the bank accounts and utility bills of suspected ‘benefit cheats’. Brown aims to cut ‘fraud’ by £1bn, boasting that he had set a higher target than the Conservatives. Labour has nothing but contempt for the poor.
