What an ungrateful nation we are. New Labour has poured billions into public services over the past ten years. More recently, Gordon Brown claims to have saved the world during the financial crisis by bailing out banks and cutting VAT. Yet Labour is trailing in the polls and its Conference is a dire affair, devoid of politics, deserted by the lobbyists, destitute of any idea of how to stop the tailspin the party is in. It would be a hard hearted person who could not take pleasure in that.
Many blame Brown’s personality for all this. His dour demeanour and inability to communicate effectively are turning people off. Yet if we examine Labour’s record it is easy to see why this is a political problem of Labourism rather than the fault of one individual-however unattractive he may be.
Over the past ten years Labour had a tremendous amount of luck, as Tony Blair now admits. It took advantage of the huge global growth in financial services, based in the City of London. The City was a successful financial centre because of the ‘light touch ‘ regulation begun by Margaret Thatcher and encouraged by Brown himself. This is the same ‘light touch’ , by the way, now blamed by many for the crisis itself.
The boom in the City enabled Labour to extract huge amounts of tax which it spent on public services, particularly the NHS and education. During the same period Labour ceased to be a political movement in any traditional sense . It cut itself off from its traditional working class roots in societyand became instead a narrow managerial clique.
Labour’s continued popularity became largely based on its ability to continue to fund the expansion of public sector jobs and services. The problem with this is twofold. Firstly, it assumed a continuing growth in the main source of the the UK’s wealth, the financial sector. After the financial crisis that is no longer assured.
Secondly, Labour’s relationship with the UK population was based upon the successful delivery of services. Yet there is still widespread dissatisfaction with health and education provision and a general sense that the money has not been well spent. There is a broader isue behind this which is to do with the way in which we have become a mass of service consumers rather than an active and engaged polity. This is the flipside of the way that Labour has become detached from society.
The decline of Labour as a representative political party has created a kind of politics based on consumer satisfaction surveys and market research. The Tories are ready to carry this on so we should not expect very much change even if there is a change of government. The Tories are also hamstrung by the fact that they will not have the same ready access to tax revenues that Labour had.
Labour was lucky, now its luck has run out. From an economic point of view the biggest mistake made during this period was to spend the windfall from the City on consumer services rather than investing in upgrading the UK’s infrastructure on a wider scale. Better roads, railways and more nuclear power stations amongst other things would have left a longer lasting legacy.