The Moment of Truth
So when did Brown’s great shift in policy happen? When did straightforward, on-balance-sheet, old-fashioned public spending, financed by old-fashioned taxes, return to the political agenda? And why did the great romance between Gordon and Prudence end? It occurred, appropriately, just as Brown’s real-life romance with Sarah Macaulay, a very bright public relations businesswoman, was becoming public. They would marry in August 2000, six months after Prudence had been told to make other arrangements. And despite Sharon Storer’s disappointment the following year, it was indeed the National Health Service which triggered the change of pace. In its first election manifesto New Labour promised to ‘safeguard the basic principles of the NHS, which we founded’. It protested that under the Tories there had been 50,000 fewer nurses but a rise of no fewer than 20,000 managers – red tape which Labour would pull away and burn. Though critical of the Tory internal market, Blair promised to keep a split between those who commissioned health and those who provided it. The overall message was less fiddling and a bit more money.
Under Frank Dobson, Labour’s new Health Secretary, a staunch traditionalist and the man with the filthiest sense of humour in British politics, this is what happened. There was little reform but there was, year by year, just enough extra money to buy off the winter crises. But then a quite different crisis hit the headlines. As often happens, it began with individual human stories which rapidly came together and expanded toward a general truth. First there was a particularly awful case of an old lady whose cancer was made inoperable after repeated delays. Then came a furious denunciation of his elderly mother’s treatment by Professor Robert Winston, the Labour peer and fertility expert much admired by Blair. Winston said that Britain’s health service was much the worst in Europe, was getting worse still, and that the government had been deceitful about the true picture. This set off something close to panic in Whitehall not only because Winston was about the most authentic witness anyone could imagine but also because he was, in general terms, right. And Labour’s polling showed the country knew it. So after a difficult haggle with Brown, Blair declared on Sir David Frost’s Sunday morning television show in January 2000 that the NHS badly needed more money and he would bring Britain’s health spending up to the European average within five years.
That was a huge promise, a third as much again in real terms (close to what actually happened). Gordon Brown was unhappy. He thought that Blair had pre-empted his decision, had not spoken to Frost enough about the need for health service reform to accompany the money, and according to Downing Street rumour, had ‘stolen my bloody budget’. Brown made up for this on the day itself when he promised that from then until 2004 health spending would rise at above 6 per cent beyond inflation every year, ‘by far the largest sustained increase in NHS funding in any period in its fifty-year history’ and ‘half as much again for health care for every family in this country’. The tilt away from tight spending controls and towards expansion had started. There was more to come. With an election looming in 2001, Brown also announced a review into the NHS and its future by a former banker called Derek Wanless.
As soon as the election was over, broad hints about necessary tax rises began to be dropped. When Wanless finally reported, he confirmed much that the winter crisis of nearly two years earlier had shown. The NHS was not, whatever Britons fondly believed, as good as health systems in other similar countries, and it needed a lot more money. Wanless also rejected a radical change in funding, such as a move to insurance-based or semi-private health care. Brown immediately used this as objective proof that taxes had to rise to save the NHS, something Wanless felt a little uneasy about. Was he being used, in the words of one writer, as Brown’s human shield? At any rate, in his next Budget of March 2002, Brown broke with a political convention which had reigned since the eighties, that direct taxes may never be put up again. He raised a special 1 per cent national insurance levy, equivalent to a penny on income tax, to fund the huge reinvestment in Britain’s health.
Public spending shot up, above all on health. In some ways, it paid off. By 2006, there were around 300,000 extra NHS staff compared to 1997. That included more than 10,000 extra senior hospital doctors (about a quarter more) and 85,000 more nurses. But there were also nearly 40,000 managers, twice as many as Brown and Blair had ridiculed the Conservatives for hiring in the days when they were campaigning against red tape. An ambitious computer project for the whole NHS became an expensive catastrophe. Meanwhile, the health service budget rose from £37 bn to more than £92 bn a year. That vast investment produced results. Waiting lists, a source of great public anger in the mid-nineties, fell by 200,000. By 2005, Blair was able to talk of the best waiting list figures since 1988. Hardly anyone was left waiting for an inpatient treatment for more than six months. Death rates from cancer for people under the age of seventy-five fell by 15.7 per cent between 1996 and 2006 and death rates from heart disease fell by just under 36 per cent. The public finance initiative meanwhile meant that new hospitals were being built around the country.
If only that was the full story. ‘Czars’, quangos, agencies, commissions, access teams and planners hunched over the NHS as Whitehall, having promised to devolve power, now imposed a new round of mind-dazing control. By the autumn of 2004 hospitals were subject to an astonishing 100-plus inspection regimes. A great war broke out between Brown in the Treasury and the Blairite Health Secretary, Alan Milburn, about the basic principles of running hospitals. Milburn, backed by Blair, wanted more independence and competition. Brown asked how you could have competition when for most people there was just one big local hospital. If it lost the competition, it could hardly shut down. Polling suggested that in this Brown was making a popular point. Most people wanted better hospitals, not more choice. Blair’s team responded that they would only get better hospitals if there was choice. A truce was eventually declared with the establishment of a small number only of independent, or foundation, hospitals. Britain was back to the old argument. Do you try to run everything from the centre, using targets as your flails and unelected quangos as your legionaries? Or do you mimic the private sector, allowing hospitals to rise and fall, expand and close?
By the 2005 general election, Michael Howard’s Conservatives were attacking Labour for wasting money and allowing people’s lives to be put at risk in dirty, badly run hospitals. Just like Labour once had, they were promising to cut bureaucracy and slash the number of organizations inside the Health Service. By the summer of 2006, despite that huge increase in money, the health service was facing a cash crisis. The amount of money involved was not large as a percentage of the total budget but trusts in some of the most vulnerable parts of the country were on the edge, from Hartlepool to Cornwall to London. Across Britain, 7,000 jobs had gone and the Royal College of Nursing was predicting 13,000 more would go soon. Many expensively qualified new doctors and specialists could not find work. After the great spending U-turn of 2000-2 and historic amounts of new money, it seemed that wage costs, pricey new drugs, poor management and the vast bureaucratic expense of endless ‘reforms’ had resulted in a health service which was irritating people as much as ever. Less fashionable health causes, such as mental health, felt left out and outside the NHS there was a vast growth in the reach of private insurance and private health. Bupa, the leading private operator, was covering around 2.3 million people in 1999. Six years later the figure was more than 8 million. This partly reflects greater affluence but it is not a resounding vote of confidence on the success of Labour’s investment in the NHS.
A parallel story could be told about schools. Here too traditional socialists wanted a single system for every child, comprehensive across the country, and run directly from Whitehall (except, of course, in now-devolved Scotland and Wales). Those dangerously semi-independent institutions, the Tories’ grant-maintained schools, though there were few enough of them, were abolished. In education the government did everything that enthusiasm, hard work and determination could, to improve things from Whitehall. First under David Blunkett, and then his successors, a stream of plans on every aspect of school life poured out of the department. By 2001, in a single year, 3,840 pages of instructions were being sent to schools. One headteacher settled down and counted 525 separate targets for his school. This, literal, wheelbarrow-load of paperwork no more transformed the schools than the revised NHS bureaucracy was transforming hospitals. Blair tried a new tack and returned to the idea of semi-independent schools. There were already ‘specialist schools’ in the state sector with say over their admissions but this was to be at a different level. Businesses, faith groups and rich local businessmen would endow part of the cost and be allowed some involvement in their ‘ethos’. As with hospitals, there was great Labour resistance. Did this not mean a possible return to some kind of selection? Another great battle began and, under pressure from Labour MPs, it was written into law that such schools could not select by academic ability. Links with local education authorities were also to be kept.
Yet it seemed possible in the early years of the new century that Britain was moving back towards an educational model half remembered from long ago. Schools were being sponsored by evangelical Christians, computer companies or firms of accountants. Was this so different from the ancient schools set up by local worthies, livery companies and religious orders? Some even favoured a teaching of life’s origins which edged Darwin aside in favour of the Bible. There was a great growth too in Muslim schools, closed to faithless outsiders. The government tried to make faith schools open up a little to people from other communities but were forced to pull back. For some this was a betrayal of the idea of one nation implicit in comprehensives, a retreat to ghetto schooling. Others asked, if locally elected councillors oversaw such independent schools, and if they were restrained from being too aggressive in ramming doctrines down young throats, was that such a bad thing? Polls suggested parents were less worried about structures than lax discipline and too-easy exams. Such schools are certainly a decisive break from the direction of education in the sixties and seventies, and far nearer the dreams of Thatcher and her Conservative successors. As in health, private schools boomed.
As the public spending had begun to flow during the second Blair administration, vast amounts of money had gone in pay rises, new bureaucracies and on bills for outside consultants. Ministries had been unused to spending again, and did not always do it well. There were other unfortunate consequences. Brown and his team resorted to double and triple counting early spending increases to give the impression they were doing more for hospitals, schools and transport than they actually could. They were, rightly, roasted for it.
A fascinating insight into the problems faced by the Blair government in public service reform came in 2005 when a former spin doctor published a book. Peter Hyman, a young, serious-minded man, had worked for Tony Blair since he became leader, rising to head the Number Ten strategic communications unit. He wrote speeches, spun for him, argued with him and saw the power game at its highest, most exhilarating level. In 2003, after sweating hard at Blair’s conference speech, he decided it was time to make the favoured buzzword ‘renewal’ personal. He resigned and became a teacher at a tough inner London comprehensive school, Islington Green. His book about the reality-jolt this produced remains one of the best texts on modern British politics available. Late on, he is arguing with a pupil about why when the Prime Minister says something, it does not just happen: ‘I look him in the eye and say, “When Tony promises to deliver on education what needs to happen is that you pass your exams. How can he guarantee that? You may not even turn up for them.” ’ Hyman reflects that his old way of doing politics, dealing frantically with 24-hour media, is useless for delivering a better school. Instead of conflict and novelty, consistency is needed; not battles but partnership. ‘Now, looking through the other end of the telescope I see how unequal is the relationship between politicians and the people…Those at the centre relish ideas and, in the main, are bored by practicalities. Those who suggest better ways of making policy work are too often dismissed as whingers…Why can’t politicians acknowledge that those on the front line might know more?’
It is a good question. In trying to achieve better policing, more effective planning, healthier school food, prettier town centres and a hundred other hopes, the centre of government ordered and cajoled, hassled and harangued, always high-minded, always speaking for ‘the people’. The railways, after yet another disaster, were shaken up again. In very controversial circumstances Railtrack, the once-profitable monopoly company operating the lines, was driven to bankruptcy and a new system of detailed Whitehall control was imposed. At one point Tony Blair boasted of having 500 targets for the public sector, and later his deputy had found five times that number for local government and transport alone. Parish councils, small businesses and charities found they were loaded with directives – not as many as schools or hospitals, but always more, interfering with much of what they wanted to do. The interference was always well meant but it clogged up the arteries of free decision-taking and frustrated responsible public life. Blair famously complained, early in his time as Prime Minister, that he had ‘scars on my back’ from trying to get reform in the public sector. Perhaps with a little less auto-flagellation and a little more conversation, both he and the country would have been happier.