In 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.