New Labour: Is it a small world after all?

by ecologics

Who is behind New Labour’s sweeping policies? In this post I offer an analysis of what are, in my opinion, some of the key forces behind the party’s far-reaching actions.

But first, some food for thought in terms of New Labour’s electoral mandate. It is well known that New Labour won the last elections (in 2005) with a drastically reduced majority: the party won no new seats, and its share of the popular vote fell by 5%. What is less well known is that only about 9.5 million people voted for New Labour (EcoLogics uses the expression ‘New Labour’ deliberately), which means that the party has governed over the last four years with a mandate based on about 22% of all those who could have voted (it is calculated that at 27 million, turnout was about 61%, which means that some 44 million people could have voted).

While the popular mandate for New Labour was not always as low as this, Britain’s extraordinarily undemocratic first-past-the-post parliamentary system means that New Labour has never actually represented a majority of Britons. Yet we have seen the scale of New Labour’s transformation of our everyday lives: beyond getting us involved in two wars, one of which was illegal and the other which is now supported by less than half of the population, New Labour has engaged in a reformist project whose privatising zeal, panoptical logic, and gross economic mismanagement are arguably unmatched by that of any other postwar government.

Privatising zeal: even as New Labour has poured money into certain public services, it has engaged in a far-reaching policy of full or partial, some might say ‘covert’ privatisations. From city academies to foundation hospitals, the selling off of Royal Mail’s most lucrative aspects to the outsourcing of Job Centre Plus activities, New Labour has fatally undermined the Labour principle that some services must remain in the public sector in order to prevent greedy corporations from exploiting the most vulnerable groups. Even in those cases where some public sector agencies nominally remain under public control, they have been reorganised as de facto private sector businesses if only because their practices have been made to obey markets, and not a public service ethos. The BBC is arguably a good example of this process, and Higher Education in the UK is increasingly another. If there is one thing that New Labour has done astutely, it’s the manner in which it has literally poured money, ostensibly destined for the public sector, into the coffers of private firms: the complaints about millions given to private consultants are only the tip of the iceberg.

Panoptical logic: New Labour’s laws have given virtually all public sector, and part-privatised government agencies the power to spy, almost at will, on any aspect of our private lives. Moreover, any of us can now be thrown into jail and kept there for the longest period of time in any industrialised democracy, without charges or due process. As I have explained other posts, the true justification for these extraordinary changes is not, as is widely believed, to be found in 9/11 and subsequent attacks; to name just one example, the RIPA 2000 legislation was developed before 9/11, but it is this legislation, as amended by David Blunkett, that was ammended after the 9/11 attack in order to give town councils and a huge variety of state entities the right to spy on people suspected of anything from the following by their dogs of parks to lying on forms for the registration of children in schools. Anyone familiar with the history of governance must know that unpopular governments, or governments without a true mandate, have all too often resorted to brute force, or at least, some form of policing coercion, and New Labour is no exception to this rule. Perhaps its one claim to innovation is the extent to which it has relied on a panoptical logic to secure its interests. However, as the crisis over the G20 policing demonstrated, it may now be the case that this same logic is being applied against the police by camera-wielding activists. And if the crisis in parliamentary standards revealed anything beyond the expected conflation of public and private interests, it was that MPs own privacy is now under threat. The proverbial chickens have finally come home to roost in Westminster itself.

Gross economic mismanagement: we should be thankful that the Tories are not in power just now because they would be busy slashing and burning public services as per the older, less astute Thatcherite model, and this at precisely the moment when massive state investment is required to keep us from sliding into an economic depression. But this verity must not allow us to overlook the fact that it was New Labour’s incestuous relationship with London City financiers that got us into the economic pickle in the first place. Blair, Brown and their acolytes have fallen, and are still falling heads over heels to please especially the big financial corporations; little wonder that Blair landed plum jobs as an ‘adviser’ with J P Morgan and with Zurich, and that Gordon Brown has managed to stop efforts on the part of France and Germany to cap bankers’ bonuses. Will Brown also cash in when he’s gone? And has Mandelson done so already? We certainly have to hope not!

All of this, and much, much more on the basis of an electoral mandate that is nowhere near a majority of the popular vote. Who then, or what, gives New Labour the right to engage in these far-reaching changes?

No one does. New Labour’s policies are almost certainly the result of a complex mixture of centralised decision-making, and some local input via direct and indirect consultation processes. While there is evidence that some of the policies are the result of long-term planning, others are the result of purely tactical decision-making, frequently in response to a media panic, or a tabloid attack. As always, it would be a mistake to assume that there is one big conspiracy at work. I nevertheless suggest that there are three forces that have more than taken up the slack of meaningful democratic participation in the UK, and are responsible for many aspects of the changes outlined above.

The first of these involves the media, with two groups, Murdoch’s News Corporation, and Jonathan Harmsworth’s (aka the 4th Viscount Rothermere) Daily Mail and General Trust, leading the proverbial pack. The process that began at least as far back as the time when Murdoch bought the Sun and transformed it into a Thatcherite rottweiler has had extraordinarily important implications for politics in the UK. Murdoch—or rather, now the Murdochs—have reached a position of such political power that they may even be king- or queenmakers. Little wonder that prospective party leaders from Blair onwards have been so eager to secure meetings with Rupert Murdoch, often in places far from the British Isles. From European policy to economic practice, from the spying on people (as was allegedly the case of the News of the World) to the promotion of a sense of permanent insecurity, the Murdochs and the Rothermeres, or their media proxies, have arguably played a huge role in promoting the kind of political culture that we have in Britain today.

The second force is made up of other powerful private sector corporations without control over the public forms of pressure brought to bear by the Murdochs or the Rothermeres, but which can exercise power by other means. Some of these are huge transnational conglomerates like the Royal Bank of Scotland or BAE, companies which have the power quite literally to stop government action in its tracks (as was arguably the case with the Serious Fraud Office’s decision to ‘discontinue’ its investigation into BAE corruption).

Many other corporations may engage in less spectacular interventions, but their practices may have equally nefarious consequences for public policy. Is Entrust playing a role via David Blunkett in policy matters involving centralised, all-encompassing databases such as the proposed ID card scheme? Or indeed, what exactly was the relationship between New Labour and the failed automotive repair company turned adult education provider, Carter & Carter? Private Eye reported in issue 1185 of 2007 that ‘The University of the West of England is the latest academic institution to agree a contract with private sector training company Carter & Carter (see last Eye). But why did UWE’s academic board only give the project its “cautious approval”? It wasn’t just the “perceived increased privatisation of education” that had board members worried – there was a “possible conflict of interest” too. That’s because the decision to “enter into a work-based learning collaboration” followed discussions between UWE (whose vice-chancellor is Sir Howard Newby), Carter and Carter (whose non-executive directors include Sir Howard Newby) and the Higher Education Funding Council for England (whose former head is, er, Sir Howard Newby)’.

We might also point to Bridgepoint Capital, the £13 billion private equity firm which has been recently associated with Alan Milburn, a former New Labour hopeful for party leadership who many believed to represent private interests in the context of so-called NHS ‘reform’. And let us not forget Capita, which some regard as the most infamous of the New Labour corporate darlings. Capita operates the television licence fee scheme (its handling of the collection of this tax has made headlines thanks to what many regard as Capita’s brutal enforcement procedures); the management of call centres for government initiatives such as the London Congestion Charge; the provision of IT services, including web hosting and helpdesk support, to many county and city councils, many LEAs, as well as the Driving Standards Agency and National Rail; the management of the Criminal Records Bureau for the Home Office;  SIMS.net, the School Information Management Software which is used in virtually all primary and secondary schools across the UK in order to record many aspects of student data… the list goes on and on, and is derived from the Capita Wikipedia entry, which is worth a read. Beyond the scary concentration of information in the hands of one private corporation, the Capita Wiki illustrates the point made earlier about the not-so-overt privatisation, via the figure of ‘outsourcing’, of a host of public service activities. Lest we forget, Capita first came to public notice when its CEO Rod Aldridge had to resign over the New Labour ‘cash-for-peerages’ affair, a scandal which many believed at the time to confirm the extent to which the New Labour’s party-economic fortunes hinged on political favours (by way of an aside, does Aldridge still have a stake in Capita?)

Beyond these big (or bigger) fish, it is difficult to know how many if any additional corporations are involved in what aspects of government on what level, and how many act in concert, or on the contrary, compete with each other for influence. It is also difficult to assess, given the behind-the-scenes nature of many of their interventions, the extent to which such corporations must vie with more local interests when they attempt to shape New Labour’s policies. We are told, for example, that it will, apparently, be very easy for Tesco to get around local wishes in Machynlleth.

EcoLogics nonetheless suspects that the group of most influential corporations is actually rather smaller than expected, and involves a great deal of collaboration, to not say economic and political incestuousness. Part of what allowed Carter & Carter to grow in the spectacular way that it did prior to its CEO’s death was an injection of capital from Bridgepoint. At the same time, the skills policy that Carter & Carter would have benefited from was authored by Lord Sandy Leitch, one of the Lloyds Banking Group’s directors, who in turn is said to have given money towards Gordon Brown’s virtual leadership campaign. Brown, for his part, did not block Lloyds when it embarked in its fateful takeover of HBOS (was this takeover not in flagrant contradiction of competition law?).

EcoLogics speculates that, as the title of this post suggests, New Labour’s world is in some respects rather smaller, or at least rather more tightly knit, than one might have thought, and thus perhaps rather more precarious than many might assume. What would happen if any of these players (or one of their employees) were to blow the whistle on the New Labour government?

That said, a third source of policy influence—and support— takes the form of the intervention of foreign governments, with the U.S. doing most of the backseat driving. Few people realise the extent to which U.S. foreign policy, and the interests of its different political and business groups, dictate Britain’s international and even national affairs. Few people know, for example, that the U.S. military would apparently have to both approve, and do the targeting for any use of our much-vaunted Trident missile system. And there appears to be a growing consensus, in the wake of the on-going Chilcot enquiry, that Tony Blair had to walk down the Iraqi War gangplank in order to keep in step with his U.S. ‘superiors’; this is something that he will of course always deny. But how else to explain that a leader of the Labour Party (in fact, New Labour Party) could ignore the extraordinary two-million person march which occurred in London on February 15, 2003?

One gets a sense of the sheer scale of the march—and of New Labour’s determination to ignore the popular will—when one learns that, on that bitterly cold day, people had to queue for hours just to be able to join the massive anti-war march. Hundreds of thousands of people were jammed on bridges and side roads, still trying to begin the march, even as several hundred thousand more were reaching the end of the route. Alas, as the Chilcot enquiry appears to be suggesting, a deal may have already been done, and Tony Blair apparently felt powerless to stop it despite the fact that he must have feared, as the Bush administration itself did, that it might well finish off his political career.

The above is, without a doubt, a much simplified analysis, one that would require much more detailed analysis of the kind that opinion piece like this cannot provide. But it begins to explain why anyone who claims that we have a solid, and healthy democracy in Britain is deceiving themselves. It is, in this sense, richly ironic that the New Labour government recently felt able to institute direct rule in the Turks and Caicos Islands, ostensibly on account of the corruption of the island state’s ‘suspended’ government. The UK’s acting prime minister—the man who has had himself called the First Secretary of State, President of the Board of Trade and Lord President of the Council (EcoLogics returns to Wikipedia)—has previously been forced to resign not once, but twice from the UK’s cabinet thanks to conflicts of interest involving British and Indian millionaires (or perhaps it is billionaires). In such a context, one does not accuse other states of corruption. Or perhaps, that is exactly what one does.