Michael Meacher - Labour's Future

Whither then accountability in this country? The Equitable Life fiasco and the ETS school tests debacle, both in the headlines today, spell out starkly a major endemic failure in British institutions which ought to be high on the reform agenda. That yawning failure is that responsibility when things go wrong has all but collapsed and virtually nobody is ever held to account.

The Parliamentary Ombudsman’s report on Equitable Life comprehensively pans the regulators as “passive, complacent and ineffective”, on top of the gross mismanagement by the company itself in the first place. The American firm ETS (another flagrant privatisation failure) not only served up its exam markings very late, but badly mismanaged the whole exam process (claiming hundreds of pupils had not sat the tests when they had) and used people to mark the tests who were completely unqualified. Will Equitable Life be made to pay or the regulators sacked? Will ETS be subject to punitive fines and its 5-year contract (after this first disastrous year) be abruptly terminated? Don’t hold your breath.

Nor are these isolated examples. Take five recent events – 90 people dying from c.difficile at Maidstone and Tunbridge Wells Trust hospitals, the torture and murder of Baha Musa by 7 British soldiers in Basra, the failure to repair the drains at Pirbright which came within an ace of another foot and mouth outbreak, the shooting of Jean-Charles de Menezes at Stockwell, and losing a lap-top containing details of 600,000 potential recruits to the armed forces? What is the link between them? Nobody was held responsible.

As power has become ever more centralised over the last three decades, the checks and balances have withered. Parliament is now weaker vis-à-vis the Executive than at any time in living memory, and major Ministerial gaffes of policy or management (as opposed to sex or money scandals) are rarely treated as a resigning matter. Enormous over-spends of taxpayers’ money on tax credits (£2bn), the Olympics (£6bn) and Government IT projects (£10bn plus) aren’t held to account. After the Iraq war no debate or vote was held to scrutinise its conduct or aftermath. Outside Parliament, redress for consumers’ complaints against the police, judges, private utilities, banks or the postal system, whilst treated politely, are rarely effective.

Secondly, neo-liberal markets rule, and any regulation at all is determinedly light-touch. Despite Northern Rock exposing disastrous flaws throughout the banking system, no Committee of Inquiry has been set up to remedy these highly damaging failures in governance and transparency. Equally, the Planning Bill currently going through Parliament removes all democratic accountability from approval for all major infrastructure projects, whether nuclear reactors and nuclear waste dumps, incinerators, airports, or big road-building programmes.

Codes of Practice for industry, where they exist, are voluntary and therefore ineffective. The voluntary Ethical Trading Initiative, to stop Oxford Street stores trading on developing country sweat-shops, is unenforceable and repeatedly breached. The Code proposed a few months ago to curb excessive secrecy and profiteering by private equity firms is, risibly, a voluntary one. Recently it was reported in Which? magazine that NHS patients do not see the point of complaining because of the risk of victimisation. And where consultations of public opinion are held – as for example on nuclear energy, GM foods, or the third runway at Heathrow – Government still goes ahead even though it didn’t get the ‘right’ result.

In the private sector too, Metronet, which ran three-quarters of the PPP London Underground refurbishment programme, racked up a projected overspend of £2bn after awarding the contracts to its own building consortia shareholders, but nobody was sacked and the taxpayers bailed them out. The ITV phone-in premium-rate competitions extracted £8m from viewers by deception, but nobody was dismissed over the scandal. Nearly 9,000 homes and businesses in Hull were badly flooded last June because Yorkshire Water failed to act on several warnings of disaster over the previous 11 years, but no heads rolled.

Why does this happen? There is regulatory capture by the vested interests, or the regulators lack clout in terms of staffing and finance compared with those they’re targeting. The penalties are often grossly inadequate to have real impact. Regulators, usually chosen by civil servants, may be selected so as to give Government a quiet life and not upset the apple-cart too much. A Commission of Inquiry is needed to rectify these flaws and to lay down adequate ground-rules for regulatory effectiveness. Or, better still, public ownership should come back on the political agenda as a better way of running things.

Meanwhile, regulators should be required each year to report publicly on what they have achieved and how all the main complaints have been handled, and there should be regional meetings at which the public can cross-question those who regulate on their behalf. Parliamentary Select Committees should summon regulators to public hearings where there is significant public disquiet about their efficacy. And we need a public debate on the necessary powers of enforcement and range of effective sanctions and penalties (including removals from office where appropriate) which would command public support.