Under New Labour departments of state are named not after their function but after their aspirations – the names, it seems, are designed to tell you what the government aspires to. Part of the department that was once ‘education’ is now ‘innovation, universities and skills’, in case we failed to understand that the government wishes to encourage skills and innovation. The department that used to be concerned with ‘trade and industry’ is now concerned with ‘business, enterprise and regulatory reform’, ‘regulatory reform’ meaning simply ‘removal of regulations’. The very name was both a signal to the City that the government wanted it to make a great deal of money, and an expression of the ideology that has prevailed in most English-speaking countries since the early 1980s: an ideology deeply hostile to the quasi-social democracy of the 1960s and 1970s, and one which regarded wide and increasing income inequality as essential to economic success. It purported to be an alternative to social democracy which would eliminate the state, progressive taxation and all other impediments to getting or remaining rich.
Saving the banks was one thing, leaving them in private hands is quite another. The government should have nationalised RBS and HBOS instead of foisting HBOS on Lloyds with a demeaning promise to suspend the competition laws in Lloyds’s favour. And having nationalised them it should have made them into instruments of public policy: at the moment it effectively owns them but plays virtually no part in their activities. As it was, the government did everything it could to avoid any nationalisations. It dithered for ages over Northern Rock before it was driven by circumstances into outright public ownership. When it was clear that RBS and HBOS were both sinking, Brown rushed to ensure their recapitalisation with public funds, not because he was setting an example to the world, as his admirers thought, but because he was determined to do whatever it took to avoid nationalising them. It was an act not of courage but of timidity. By that stage no one, except for the directors, some of the more optimistic shareholders and, of course, the members of the present cabinet, would have blinked an eye had the banks been taken into formal state ownership. What was once an electoral strategy – the repudiation of what Old Labour was thought to stand for – now paralyses the Labour Party, and Brown in particular.
There is no sense that the Labour leadership believes this might be a crisis of New Labour, not just a crisis of the banking system. All the old tattered policies are still worming their way through Parliament. The government is persisting with its wretched legislation to privatise much of the social service system, though we know from experience what the consequences will be: the private sector will take on only the easy bits, and even more stringent ‘conditions’ will be imposed on claimants – all accompanied by tosh about a ‘personalised’ service. This legislation could only have been written by financially well-padded men and women who have lost all sympathy for their own constituency. Even more surprisingly, they are proceeding with it even though the economic circumstances in which it was conceived have been transformed. (Unemployment is likely to be much higher than it was when the legislation was drafted.)
Please keep comments on topic and to the point. Inappropriate comments may be deleted.
Note that markup is stripped from comments; URLs will be automatically converted into links.