Phone-hacking, LIBOR, PFI – all Tory-New Labour legacies
July 6th, 2012In Ancient Eypt we are told there were 7 fat years, then 7 thin years. Not much has changed. For a decade we had the arrogant swagger of the New Labour hegemony seemingly carrying all before it, but actually pitted with lies (the Iraq war), deceit (the ubiquitous culture of spin), prostration before power (Blair’s cuddling up to Murdoch), adulation of the City (regulation-lite leading to the Great Crash and today’s interest-rate fixing), worship of wealth (Mandelson’s immortal “New Labour intensely relaxed about people beoming filthy rich”). And now another colossal Tory-New Labour scam – PFI – is coming home to roost, big time. The collapse of the South London Healthcare NHS Trust is just the harbinger of a whole cascade of hugely costly failures coming home to roost.
Under pressure from New Labour this Trust signed up to a £2.5bn PFI deal which it now costs £61m a year to service, no less than 14.4% of its annual income. In the case of one of its hospitals, the Queen Elizabeth Hospital in Woolwich this PFI levy on its income will last for another 18 years, and in the case of another, the Princess Royal Hospital in Bromley, it will continue for the next 20 years. The hospital Trust is now losing £1m a week, and obviously the original deal was never sustainable.
PFI was sterted by the Tories in 1992 and hugely expanded by New Labour after 1997. In total it has now committed the public sector to pay back £301bn to banks, investors and private companies for more than 800 hospitals, schools and prisons projects by 2050. That is, New Labour has put the State in hock to the private sector to pay back a sum equal to one-fifth of Britain’s entire GDP within the next 50 years. What this means is that New Labour crippled the public sector with gargantuan unpayable debts for the next half century and now the Tories are eviscerating what’s left with further spending cuts of another £81bn.
This slow-moving catastrophe has come about for two mean reasons. One was the ideological prejudice of both New Labour and the Tories to privatise the State down to every last nook and cranny they could find. Second, New Labour (and over 90% of the expansion of PFI has occurred under their regime) wanted to establish their number with Big Business just as also with the City, media and security services (police and MI5), and a £300bn increase in corporate profits – at taxpayers expense of course – was very persuasive. Blair and Brown have a lot to answer for, even more than we yet know.
July 7th, 2012 at 11:41 am
It goes to show that the people running this country, both past and present are totally incompetent. They have no idea of life on the ground floor and their inexperience of the business and financial world left them wide open to exploitation. Lured by the siren call of money and promises of well paid after-Parliament jobs they succumbed. Parliament needs a complete overhaul,top to bottom and we need people other than the greasy pole cimbing career politicians that we have now.
July 8th, 2012 at 12:04 pm
Good points, Michael, as perceptive as ever.
You’ve been on the inside too – as a Labour minister under Blair. Perhaps you should write a book about that experience.
July 13th, 2012 at 1:09 pm
How about a land tax. We tax labour and capital but not land. And land owners benefit by the appreciation of their assets with no effort on their part.
November 6th, 2012 at 6:36 pm
Worse still many investors in PFI use complex structures to avoid tax. Re-nationalise trains, water and PFI hospitals or cap the return investors can get to gilts plus the equity risk premium (c4%). Sloth, Fear and greed are stronger than ever. We need to rebuild the nations character and I would agree with Mr Simpson – we need new MPs with more independence and common sense. MPs should immediately lose their post for fraud, or absence (like celebrity TV shows!!). The internet allows us to open the way for a more open access to being an MP; using a an independent vetting board to confirm identity and career history.
May 2nd, 2013 at 6:22 am
I think Michael Meacher was a major supporter of New Labour so why the crocodile tears?