Blog 2023 Malcolm Blair-Robinson

On the face of it Labour has problems. It is not proving an effective opposition. Its economic policy is weak and largely discredited. New disclosures of the damage done to the Labour government and the country by the Tony and Gordon feud are history, but bad nevertheless. So is evidence of warnings over excessive government spending, from officials. Now we are told that we have to wise up to a new feud, between the one Milliband and the other.

Just for now Labour has enough lead in the polls to give it a working majority. This would unravel during a tough election campaign, especially if Scotland decided to send a lot of Nationalists to Westminster. The Tories have found winning elections more difficult without Scotland. Labour would not be able to win at all. So, before things get out of control, Labour needs to get a grip.

First, the Millibands and their wives must have repeated public love-ins to make clear that the rumours of a feud are false and the books mistaken. Second, the party has to develop a general theme of economic renewal which is in a different league to the cut slower waffle of the moment. Third, it needs to wise up to the fact that there was a lot wrong with its meddling with the NHS and must now show how it now plans to get this so called national treasure to deliver modern healthcare. Fourth it must explain how it would restore rigour to both teaching and examinations, all of which slipped under New Labour. Fifth it must address the issues of excesses at both the top and bottom of society, to restore the much fairer aspiration of the not too recent past. Society must be fair and inclusive. It does not have to be big and managing.

Finally it needs to take a look at the public utilities and whether in their current privatised form, they are delivering an outcome which is in the national interest. There is no case which would gain public support for wholesale nationalisation on the Clause Four model. Taxpayer ownership of shares to ensure a share of these mega profits went back into the public coffers might, on the other hand, prove very popular.

In blunt summary, Labour must now show it is an effective opposition and, if given the opportunity again to govern, it will offer more than spendthrift economics, credit booms and internal quarrels.

Robert Gates’ speech in Brussels was remarkable. It sets out an analysis of America’s relationship with Europe and how this will develop, which corresponds closely to views expressed in this blog and in my book 2010 A Blueprint for Change.I have long promoted American disengagement from Europe and from NATO, not because I am hostile to the US, but because the circumstances which brought America to Europe, first the Nazi, then the Soviet threats, no longer exist.

The outgoing Defense Secretary expects the new generation of rulers in the US to have a post cold war vision and pressing political and financial problems at home. They also have two wars to finish off, in Iraq and Afghanistan. They have long realised the war on terror made more enemies than it captured and the killing of Bin Laden gives them an excuse to wind it down. Even if not all politicians are yet in that place, the majority of voters are, and politicians rush to where the voters gather.

The US funds NATO to the tune of 75% of the cost of the alliance. This is clearly ridiculous in present conditions. But it shows us also how Europe sees itself. It sees itself no longer divided and the rest of the world as an opportunity, not a threat. Its biggest historic military power, Germany, refuses point blank to mess any more with conflicts other than the defence of its own borders, against which there is no realistic threat. Britain and France are the main military powers of Europe now and their joint nuclear deterrents provide the strategic umbrella to give security against rogue states.

Essentially what is happening is that NATO is past its sell by date. It is trying to extricate itself from Afghanistan, it refused to go near Iraq and it has bitten off more than it can chew in Libya, simply because too few of its members, apart from America, France and Britain have any kind of military capability. Indeed it is running, literally, out of ammunition and having to turn, yes, to America, to keep the operation in support of the rebels, going.

From the European point of view it has been very convenient to delegate its security to America, whom Margaret Thatcher in a reference to its immigrant origins, once described as Europe Overseas. The generation with whom that found resonance is now gone. Americans see themselves as Americans. Because the two great potential military aggressors of Europe, Germany and Russia, have now taken new paths, a militarily active US in Europe is in itself more likely to provoke a threat than to defend against one. Thus a Europe at peace is one which does not need American military assets. In return for getting them, it has had to contribute to the fringes of the war on terror, but it is clear from the shortcomings of the Libya operation that those days are over.

So all in all, the Gates speech, which caught many by surprise, describes a tide of events too powerful for politicians on either side of the Atlantic to resist. It is called the tide of history. It flows, unstoppable, down through the ages. In our time the Soviet Union unravelled because it did not work economically, NATO is unravelling because it is no longer needed for its original purpose, nor are its members willing to back with money and military assets some new world role. Repressive government in the Arab world is unravelling because people want to be free.

Russia seeks to become a global economic power and needs a peaceful Europe which in turn, cannot keep the lights on without Russia’s gas and oil, so the interest in peaceful relations is common. There remain ethnic tensions in former Soviet satellites, but these will diminish when Russia no longer feels encircled by NATO and ethnic minorities stop trying to settle old scores when they know they are on their own. China is the rising world power, but that power is based on economic, not military, might. Europe needs to trade with China and its prosperity will become increasingly dependent on the Chinese sphere of influence, but by the same token China knows that its own economic strength is dependent on access to markets in Europe and America. Put simply the global economy reduces the dependence on the military and increases the opportunity for development of mutual interest.

For a long time it has seemed to this blog that these truths lay hidden. Robert Gates’ courageous speech has brought them into the light.

All political parties have a left, right and centre. Labour was the same, but with a difference. It had two competing leaderships. One in Downing Street was official , the other in the Treasury was like a rebel government in waiting or a political insurrection. The latest revelations in the Telegraph, which appears to have access to yet more private papers, show just how much intellectual capital was spent plotting and resisting at the highest levels of government, in the Labour years. This was, anyway, a period of bad government practice, with the country being run by lolling on sofas and shouting in corridors. The strife between the the man who was and the man who wanted to be, leader is, for the nation, a pretty sorry tale. This is the worst way to run a country.

But it is over now. The question for Labour is whether it is over for the survivors. The Brownite team now hold all the key shadow offices. Harriet Harman, something of a unifying force and a competent caretaker, seems to have faded from the political radar. The two Eds, Douglas Alexander and Yvette Cooper now hold all the key shadow offices. Labour did rather well in the local elections ( except for a disaster in Scotland) and remains just sufficiently ahead in the polls to form a working majority in a snap election. Considering the scale of their defeat in 2010, this is not bad. Nevertheless the Coalition, which is a much better run government but shaky on policy, is showering the opposition with gaffes and u-turns, which should create big opportunities for an effective opposition. Yet somehow they don’t.

Why is that? Could it be that it was not so much Brown himself who was flawed, but his team? Taken together and now leading the opposition in all the key posts, they do look very much like the cast of a B movie. Nowhere is there to be seen a star. Neither are there to be seen any coherent ideas to replace the Coalition’s policies, which it is their function to oppose. Except to cut less and borrow more. To that nobody is listening.

The Archbishop of Canterbury had made a dramatic political intervention. There will be some who will say that politics are nothing to do with the church, but they would be wrong. Under our constitution, the Church of England is one of the pillars of the state and central to the monarchy. For centuries religion was politics. In more recent times senior clerics have tended to comment on the social issues of the day, which though political, are seen more as giving voice to the national conscience. Dr. Williams’ intervention is not of that category.

He makes, instead, a real and valid point about the workings of our democracy and the relationship between the electors and the elected in a modern world. In that world, bound by the notions of contract and fair marketing, it is no longer appropriate to elect private members of the House of Commons, who do as they think best. It is now expected that the Members of Parliament of each political party will do as they individually and collectively promised.

Leeway is given for adjustment to events. Even so, if promises are rashly made and abandoned because of events, the political cost is high, as the Lib Dems have found. Dr. Williams goes further. The essence of part of his argument, is that little or nothing was said about key elements of both health and education reforms in the election campaign, yet so radical are some of these, that they must have been known beforehand. In commercial terms such marketing is deemed misleading and is illegal. In politics it abuses the principles of modern, inclusive, democracy.

From the very beginning of the coalition government, this blog has been against ideologically driven reforms, whilst the financial crisis is in being. The government has a clear mandate to set the economy right and anything, however nasty, that falls within reasonable understanding of that remit, has, still, majority public support. Within that framework there will be need to reform, simply in order to make less money do more in order to maintain services and provision. Because of Blair’s regret at not starting politically driven reforms earlier in his premiership, Cameron was determined to get stuck in at once. However Blair and Brown inherited an economy well on the mend, not one technically bust. Brown dined in the City talking of prudence; Osborne has had to talk of survival. This is a very different climate.

Although this Blog has been outspoken in its criticism of the NHS (the latest in the last post) and supports the thrust of the proposed reforms, I, like everyone, was astonished when they were announced, as they flew in the face of everything the Tories had been saying, or appeared to be saying, during the election campaign. Had they stood alone, they may have got through. Coupled with everything else subject to u-turns and re-thinks ordered by the Prime Minister, this raises not only the concerns so aptly voiced by the Archbishop, but the narrow political question: does Cameron know what he is doing? The Tories know for sure they are not led by another Thatcher. They are beginning to fear their Prime Minister may be another Heath.

What impact this will have remains to be seen. Labour will be heartened, especially after it and its economist toadies were slapped down by the IMF. The coalition itself must press forward with a clearer vision of what is feasible before intentions are announced. The political capital to fund any more u-turns has run out. Indeed the government is already in political overdraft. It must pay back by delivering real improvements in the areas of controversy, so that it is forgiven for its failure to explain, on the grounds that it did the right thing. Failure to do this will meet a harsh outcome when the day of judgement comes. Governments of every stripe and record have to face the electors eventually.

The answer is, if the crisis is acute, yes very well. This positive answer to a simple question becomes a lot less positive the more routine the diagnosis or treatment required. This is not because people are incompetent. It is because they are being asked to run an infinitely variable facility within the strictures of a rigidly programmed service. I will give your a personal example.

I suffer a heart condition of several decades duration. It has to be managed, but is not, in itself dangerous, if treated. Recently it started playing up, due to a clash of pills. It took me a week to get an appointment with my own GP (rather than the duty doctor). We agreed a revue by a consultant would be a good idea, the last was some years ago, as well as some tests to check the current status of the cardio-vascular system. I saw the GP on April 12th. The nearest consultant appointment at the local general hospital is July 1st. That is nearly three months.

I asked my GP if he favoured the controversial reforms. ‘Rather’ he said enthusiastically ‘then we would be able to do all these tests here at our own medical centre within a day or two and the consultant would see you here.’ Whether his hopes will be realised remains to be seen. What was clear in that short conversation, is that for most run-of-the-mill treatments the local surgery or medical centre is not only the most convenient place to provide it, it is also the most cost effective.

About forty years ago the emphasis of health-care shifted from the patient’s doctor, to hospitals, who organised consultations for even quite basic conditions through clinics run by a consultant, assisted by trainees. The same hospitals and medics also have to provide all the acute care associated with emergencies and hospitalisation. This is illogical, inefficient, expensive and patient unfriendly. It is not what hospitals are for. This is why there must be reforms. We are running a dysfunctional system which makes patients suffer for long periods and consumes both human and financial resources, in complete disproportion to its outcome.

The biggest flaw is its culture of waiting. What other service, business, or public function thrives on waiting for late appointments, delayed treatments and routine tests? The answer is none. One of the reasons that health-care professionals become so agitated about the proposed reforms, which they fear are privatisation by the back door, is that they know that in a free and competitive medical world, patients would no longer be willing, meekly and uncomplaining, to stand in line.

Instead of consulting, the government should have backed Lansley. It is now promising so many u turns, it is almost spinning on its axis. The most vocal doctors, who are themselves the greatest barrier to a proper health service in this country, smell victory. If they get it, the sick and the vulnerable and the taxpayers will be the losers. The government should have stuck to its guns.

It should call the bluff of these doctors by making one very big reform. ALL NHS doctors should be employed by the NHS and work exclusively for it. Those who want to practice private medicine should do separately  and pay back to the state, the cost of their free medical training. Not only do these people block progress, they also make a fortune on the side with private patients culled from their NHS waiting lists. The GPs are not  employed by the NHS, any of them. They are under such a barmy self-employed contact, that they are among the highest earners in the community, whilst refusing to look after their patients after business hours. No organisation operating to this business model can deliver a cost effective outcome for taxpayers, nor timely health-care for patients.

If the government bottles out of this opportunity to set things right, it will do itself no credit. It will also guarantee that at some point in the future the NHS, in many ways a state within a state, will, like the banking economy of so recent pain, collapse. Whatever government is in office when that happens, will find itself out of office for at least a generation.

Ken Clarke’s proposals made sense. Among those trying to deal with the problems of the largest prison population in Europe, the cost to the taxpayer of unnecessary trials, the trauma of victims and many other issues, his proposals had wide support. A media centred drama then broke out following a misunderstood remark. Now, following the intervention of the prime minister, this part of the plan is to be dumped.

Reports on the working of cabinet government and harmony of the coalition are very favourable, including those of independent experts who have extensively interviewed ministers and officials. Sharp comparisons have been drawn with the sofa years of Blair, the tempers of Brown and the internecine strife of both. The verdict is that cabinet government is once again working as it should in a parliamentary democracy and the destructive years of the quasi-presidency of Labour are gone.

All of that is good. It is clear that Cameron sees himself as a chairman and leaves his ministers to get on with it. Until they hit choppy water. Then he interferes. Unfortunately the way this interference occurs and is reported is not a seamless process and whilst it rescues the government from unpopularity, makes it look indecisive and, worse, damages the ministers involved. Weak ministers, unwilling to take the risk of sticking their necks out, make for weak government and a cabinet full of cringers who go along with anything, in order to stay safe.

We have too much experience of such cabinets in the past. Whether you approve of its policies or not, this is a much better government than the last several. Its operating standard needs to be encouraged. The Prime Minister gets the credit for this, but he must sort out the way he deals with the politics of his ministers’ initiatives. Apparent U Turns, whether real or contrived, are an indulgence which usually lead to electoral downfall.

A bunch of economists, most would classify themselves as left wing and Keynesian, wrote to the Observer yesterday calling for an economic plan B, because growth was too shallow. Each time I turned on the TV news one or other of their number was being interviewed. I listened with an open mind each time. I heard little that made sense in today’s world, at this hour, with our problems. They were all well read. They knew their economic theory. They were highly respected. But they missed the point.

The point is this. Yes, even I think ways should be found to give greater stimulus to the private sector and manufacturing and one of my more recent posts focuses on this. What is utterly insane is to say slow the cuts, because this means we borrow more (oh yes it does!) and, worse, we slow the re-balancing of the economy. That re-balancing, which would be better described as rebuilding from a shattered base our capacity to make things both for home consumption and export, employing those previously unemployed or working for the State, must happen if we are to stand any chance of avoiding an outcome similar to Greece etc.

If Keynes were here today he would back Osborne. This is because his theories were based upon industrial economies, employing large workforces operating at well below capacity with millions laid off. Stimulate demand and you put people back to work. The crisis now, is that the UK makes very little it uses every day or which overseas consumers want to buy, so to stimulate demand is to suck in imports. On top of that we have inflated our housing costs to such barmy levels that people cannot afford to buy consumables unless they borrow. The wealth we thought we had built in the Labour years was an illusion, because if you value the so called assets at their real worth and deduct all the money owed against them, there was no growth.

The only way out is to, essentially, start again. This will not be quick, but the fire is kindled and growing. Conditions world wide are adverse, but there are good opportunities in the BRIC driven developing markets and we have to go out there and sell. At home, the opportunity to make consumer goods is almost limitless. Even if the unemployment benefit bill rises, it is for a purpose, because in the end these people will mostly get jobs. But to raise government borrowing to fund jobs, which act as a permanent burden upon the shoulders of everyone else in some daft government initiative or quango, would be, literally, to sabotage recovery.

The economists who want to do this are so very badly mistaken. Yesterday we listened to them politely. Today we should ignore them and get on with the job. As a mischievous extra we might check who pays their salaries. If it is the taxpayer, there may be room for more economies.

This blog has never approved of this adventure. Nevertheless it is happening. It is futile to bang on about why it should not be when it is; now we need to see what can be done.

William Hague’s Foreign Office has restored its reputation as an independent and important diplomatic force in the world, after the craven Labour years. His bold visit to Benghazi is a clever move to give encouragement at a potential tipping point in the current stalemate, as well as to assess the capacity of the rebels to run a large part, if not all, of Libya. There are now signs that the stalemate may not be quite so stale and may be tipping to the rebels.

Hitherto the problem has been that Gaddafi had the army, while the rebels had untrained fighters. So long as the army remained loyal to Gaddafi, he was relatively safe, if he could dodge incoming NATO missiles. It was also clear that the rebels were an effective armed insurrection, but lacked the power to over-run the whole country. The fact that neither side had the tipping power was evident, yet Gaddafi remained convinced he would win. It is now clear he cannot. He may remain in denial. Many of his officers do not. He can afford to lose ministers. He cannot afford to lose soldiers and especially not experienced commanders of rank.

Meanwhile amateurs who pick up a rifle, willing to die for their cause, who survive the early battles, cease to be amateurs and become veterans. There is increasing evidence of better rebel discipline and tactics. There appears no shortage of troops. This is not the case with Gaddafi. Although he clearly has real and affectionate support among many more than the West likes to acknowledge, this may not run as deep as he believes. Certainly they seem less willing to fight for him, hence the reliance on mercenaries.When the tide turns mercenaries go home.

To win a war without troops on the ground is difficult. Hague’s visit underscores the fact that the protecting civilians language of UNSCR 1973, is now little more than a veil behind which NATO fights for the rebels. Had the original terms been taken seriously, political negotiations undertaken immediately after halting the assault on Benghazi, would have resulted in some kind of partition and would have saved very many lives. With the chant of Gaddafi must go, came the collateral that many would die in the uncertain process of getting rid of him.

To bring an outcome to this mission which gives it a measure of achievement, NATO now has to get on with the job. The destruction of Gaddafi’s fighting machine, whether by missile, bomb, Apache or defection is now the focus and the only focus which will yield a decision. Some leeway in what the Russians can, in mediation, offer Gaddafi and his family may speed the process. It will certainly save some civilian lives. That after all, is what the mission is supposed to be about.

There appears to be agreement for another Greek bailout. There is also increasing noise about a coming default, perhaps described by some other spin, but amounting to the same thing. At present it is very difficult to see where the economic activity to get Greece out of its debt morass is going to come from. The more it borrows the worse this is going to get.

There are also noises, perhaps no more at the moment than loud whispers, which talk of banks bearing some of the losses of a debt restructure. This makes sense, although if implemented would cause considerable problems with frail bank balance sheets. It makes sense because the utter abandonment of all the criteria of prudent lending, together with the stuffing of balance sheets with alleged assets which either had no reality at all or one a lot less valuable, is the core of the crisis. Once the principles of value and affordability are abandoned to the point were borrowing itself becomes the asset, which is what happened prior to the crash, collapse at some point is guaranteed.

Requiring investors and bankers to bear some of the losses on these sovereign loans would ensure that greater caution prevailed. A deal which demands that the taxpayer carries all the loss is not only a duffer for those taxpayers, but a licence to go wild with impunity. Setting all this right is now the priority in international finance. It will prove more difficult than the earlier rescue period of the crisis, for a number of reasons. Chief among them is that the debts are too big to repay without social unrest and that losses are in the end will have to be borne, at least in part, by those who made these bad judgements in the first place.

This may not be a good moment to stuff an investment portfolio with shares in banks. They appeared to ride out the crisis as if nothing had happened and go on paying themselves with a generosity which sickened the victims of their folly. Well that is coming to an end. Times for banks are going to get hard. Few will be sorry.

There is now sufficient evidence from economic data to come to a more sophisticated conclusion about Osborne’s programme than the narrow political ping pong of cut or less cut. Broadly the cut side of the plan is right and on track. The state is too big, many quangos and agencies are either pointless or dysfunctional (as the care home scandal demonstrated) and the whole thing is failing to deliver anything really useful measured against the terms of its cost. Additionally the cost of all this is a burden on business, industry and the private sector workforce, who jointly have to pay for it and get little in return. It is like a hiker having to carry a rucksack which is part filled with rocks.

So slash and burn is right. What is not right is to suppose that everything else will take care of itself. To compensate for the slow down initiated by the cutting, there must be stimulus for the area earmarked to take up the slack. This is not really happening. It is not about bank loans. It is about tax rates, red tape and incentives. So far the Coalition’s policies in this field are far from robust. Indeed the new energy tax was wholly misconceived and has already led to a shut down of one of our North Sea gas fields. We do not mind getting rid of bankers, but to curb our own energy production so that we have to buy in is mad.

It will not be possible to stimulate the level of growth necessary to cope with our debts unless we do more to make business easy. That means flexible employment, light employment regulation, low corporation tax, high personal tax thresholds and fewer statutory demands for such things as paid paternity leave, which are covered in moral glory but impossible for small businesses to afford.

When Cameron thinks about dropping folk from his Cabinet (re-shuffling is useless- a dud at one thing will be a dud at another) he might think it wise to make space for John Redwood. Yes he is a right winger, but horses for courses and we are, sadly, in that kind of race. We cannot afford to lose. It is much tighter than we think. New reports that Moody’s are threatening to downgrade the US unless it stops its political squabble, shows how little room for manoeuvre the Anglo-American economies now have.