Michael Meacher - Labour's Future

Gordon Brown has helpfully pre-published the government's draft legislative programme for 2008/9. But it deals with none of the really big problems now facing Britain.

The biggest concerns the breakdown of the neoliberal economic order and the banking crisis now dragging down the real economy. Structured investment vehicles, which carried the sub-prime securitised contagion across the world, should either now be banned or have to be approved by a much-revamped, and more robust, Financial Services Authority. Credit-rating agencies should be prohibited from being paid by the institutions they assess for creditworthiness, as scandalously happens now, in order to block any conflict of interest.

The gigantic City bonuses should be regulated by the Bank of England, to stop the creaming-off of a wholly artificial financial froth. Investment banks should be legally separated from commercial banks. Robust capital adequacy ratios are also urgently needed if western banks are not to be forced in future, like Northern Rock, to go cap in hand to be bailed out by government (and the taxpayer), or by sovereign funds from China, Asia or the Middle East. Will the government tackle any of these fundamental problems of the neoliberal economy? Unlikely when New Labour is itself the political wing of neoliberalism.

The second major breakdown in the state lies in the steady accretion of power to the centre over the past 30 years and the virtual collapse of accountability in this country.

To make scrutiny of the government much more effective, members of select committees should not be chosen by the whips, but elected by a secret ballot of all non-executive members of the House in accordance with party quotas, and should then elect their own chair. Select committees should have the right, by negotiation between themselves, for one of them to table a motion for debate and vote on the floor of the House once a month (as in the French national assembly). The prime minister's nominations for the cabinet should, as in the US Congress, be subject to ratification by the appropriate select committee. And parliament should be empowered and funded to set up its own parliamentary commissions of inquiry (as happened in Victorian times), for example in cases of extraordinary rendition and torture.

Democratisation is just as necessary in wider society outside the House. In the past few months, discs containing the sensitive personal details of 25 million people have been lost; Metronet's tube refurbishment programme went bust, leaving the taxpayer with a £2 billion bill; a disc containing DNA profiles of more than 2,000 people linked to serious crimes abroad went unchecked for a year by the Crown Prosecution Service; Northern Rock has cost the taxpayer £25bn but the former chief executive walked away with a bonus of £750,000; the National Audit Office recently found that the Ministry of Defence had spent at least £400m on eight Chinook helicopters that were still not airworthy 13 years after being ordered; and so on, and so on. What is the common link between all these examples? It is that nobody was ultimately held responsible.

Why has this collapse in accountability occurred? There are several reasons. Civil service liability is shielded by the myth that the minister is always responsible. The regulators, especially in the Treasury, are given too little staffing and funding to be really effective in pursuit of the endemic culture of tax evasion, avoidance and quasi-embezzlement of public funds. And in the unfettered neoliberal economy now imposed on us, the big companies and big financial institutions have largely captured the state – whatever they demand, they usually get, and where they mess up, as they have done big-time over the credit crunch, nobody is held accountable and the state picks up the rap, as we repeatedly see.

This article originally appeared in Comment is Free on Tuesday, 8 July 2008.