Blair goes, Thatcherism lives on

23 June 2007

In the last days of Blair’s premiership, Simon Jenkins is struck by the stunning resilience of Thatcherite doctrine: in time, New Labour will be seen as nothing but a change of crew

In social policy the new government tackled realms that the Tories treated as no-go areas (largely for fear of Blair and Brown). They curbed single-parent and disability benefit and introduced workfare from America. They propagated such icons of Lawson– Thatcherism as incentive bonuses to public officials. They spent the equivalent of one pence on income tax on private consultants. They favoured what Thatcher called ‘our people’, car drivers, drinkers, suburban builders and frequent flyers. When the IFS concluded in 2005 that ‘income inequality in Britain is still higher than at any time in the previous 18 years of Conservative rule and probably for at least 20 years before that’, neither Blair nor Brown batted an eyelid.

By far the biggest conversion to Thatcherism concerned public investment. Over half was simply privatised, greatly to the benefit of the City but at vast long-term cost to the public exchequer. Every government department, agency and local authority was told by the National Audit Office’s Jeremy Coleman ‘to be under no illusion that PFI is the only game in town’. Any school, prison, hospital, housing estate, road, even government office had to be built by the private sector. By 2007 40 per cent of the new owners of these institutions had sold them at a profit. What had been built with gilt-edged 5 per cent bonds now had to bear some 20 per cent of long-term debt. Blair will leave NHS hospitals with £17 billion of debt, to be paid to private financiers over the next quarter century. He also introduced a concept of which even Thatcher had fought shy, an internal fixed-price market for operations in which the NHS would have to compete with the private sector. It was a recipe for the chaos into which the NHS sank in 2006/7.