Monday, April 19, 2010


"I think New Labour is probably over." - Tony Benn

Tony Wood passes scathing judgement upon New Labour in the latest issue of the New Left Review. Much of what he writes is well-known, especially among those unbedazzled by the superficial sheen of the late 90s and early 00s, but its aggregation of dogmatic neoliberalism, irresponsibility and unashamed venality confirms the last 13 years as the most right-wing period of British governance in living (or dying) memory.

A few facts stand out. Firstly, Blair's liberal interventionism was a sham from the start: he began his first-term by selling weapons to Suharto and giving effusive support for Putin's violent campaign in Chechnya, not to mention the military assault in Kosovo. After 9/11, Blair became a pioneer of the invasions of Afghanistan and Iraq. Far from being Bush's poodle, without his recruitment of new Allies, the invasions would have proved diplomatically unviable.

The consequences of this in the Middle East are well-known, but in the UK, too, his hawkishness cost lives and liberty. In July 2005, 52 people died at the hands of suicide bombers motivated by revenge for Blair's Middle Eastern adventures. Responding to this amplified terror threat, Parliament agreed that terror suspects could be held without charge for 28 days, compared to 2 days in the US and Germany (the Commons originally agreed an extension to 42 days, before the Lords overturned it).

The result of New Labour's economic policies is also well known to us. Despite the introduction of a minimum wage, the ratio of wages to GDP fell under New Labour. It failed to reverse the Tories' anti-union laws, and further deregulated corporate and financial life, with the result that capital dominated over labour more than it had ever done during the 1980s. The share of finance grew from 22% to 32% of GDP between 1990 and 2007, and manufacturing has fallen from 20% to 12% of GDP since 1997 (a much higher rate of decline than under the Tories).

The result of this - aside from mortgage defaults, soaring unemployment and public spending cuts (now seen as an unavoidable response to Britain's deficit, itself a result of the £1.4 trillion bail-out of the banks) has been a widening of inequality.

In 1997, the richest 1% of Britain's owned 17% of the country's wealth; now they own 21% (the poorest 50%, meanwhile, owns just 6%). In 1997, the richest 1% of the population received 8% of total income; now they enjoy 12.6%. In 2009, profits rose by £24 billion, whilst wages increased by only £2 billion. And nearly 2.5 people are now unemployed, many receiving just £7.28 per day in benefits.

Even Labour's biggest boast - that it has improved public services via increased investment - does not stand up to scrutiny. Public expenditure on the NHS increased by an average of 7% during the last decade, yet there are 13,000 fewer acute hospital beds now than in 1997, hygiene standards have deteriorated and readmission rates have increased (the flipside to a reduction in waiting times).

Labour has invested in management and passed money to the private-sector - only a small percentage has been spent on clinical care. It has championed PFI projects (a blatant and expensive handover of capital to private consortia), outsourcing and the internal market. The latter requires an impenetrable bureaucratic structure, and a relentless succession of top-down targets which compromise clinicians' ability to do their jobs. It is difficult to think of an area of public life in which Labour has wasted more money than the NHS.

Wood does not mention housing policy, but here again Labour's record is woeful. Social housing waiting lists have risen by by around 70% since 1997 (and have nearly quadrupled in some cities), yet Labour has refused to build new Council houses, and has actively encouraged Councils to sell their stock to pay for Decent Homes repairs. Owen Hatherley describes a programme of, if you will, urban disaster capitalism: the Pathfinder scheme, which allows compulsory purchase and demolition of housing which has no market potential, and replaces it with housing aimed at "the aspirational classes".

Owen Hatherley describes the bail-out of Housing Associations and the building industry here. The Homes and Communities Agency - one of Labour's many quangos - handed £2.68 billion to private builders in early 2009, of which 50% simply recapitalised struggling volume builders. The remaining 50% has been spent on developments which will deliver around 5,000 homes to buy and 10,000 for "affordable rent".

Intended to stimulate the only industry still capable of keeping the economy going, its public benefit is neglible, and may even be negative. "At the very end of the New Labour project," says Hatherley, "we find a massive programme of public funding for substandard private housing."

None of this is a rationale for voting for either of Labour's opponents, but it is a reminder that, in the absence of desirable alternatives, a vote for Labour remains a vote for a more unequal Britain.


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