Enemies of the state: the 40-year Tory project to shrink public services
The Guardian, by Polly Tonybee and David Walker
Just as he reaches the end of his inspection, the environmental health officer spots the meat pies. A stack of them have tumbled on to a shelf on the floor of the storeroom, not in the chiller. A flicker of alarm crosses the transport cafe owner’s face. Pies are big on his menu. He sighs. “Well, it’s complicated,” and the story unfolds. The pies used to be made by so-and-so but the company owners split acrimoniously and it’s all a bit chaotic now.
“Ah, yes,” says the inspector. “I know this one.” He has the local background and, as he probes and prods, the cafe proprietor admits sheepishly that the pies arrive with a scrappy piece of paper, no official invoice, dubiously labelled “organic” with no list of contents, paid for in cash to an old chap called Gramps off the back of a lorry.
Here in Huntingdonshire, the number of environmental health officers has been cut by a third over the past five years. “But the number of food outlets grows, 1,300 on our patch, with a high churn in ownership,” says the chief officer.
These public servants are a quiet lot, meticulous, precise; just another workaday arm of the state that goes unnoticed. It’s the taken-for-granted state. If a waiter swears the chicken tikka masala contains no peanuts, we expect someone to have checked, as the wellbeing of those with severe allergies depends on it.
But austerity is sweeping all this away. Local knowledge and expertise dissipate. Who remembers, before new building starts, the location of contaminated land, industrial waste, disused gas works? Pest control is on the wane. There is no out-of-hours anti-noise service.
The fast-disappearing environmental health officer – in England, their numbers down by 25% over five years – is just one example of how the state is shrinking, its capacities dwindling and its fabric stretching thin. This is not just a regrettable deficit-reducing necessity, but a long-term political project to return us to a pre-second world war dominance of the private realm. And so far, that seems to have worked, with relatively little complaint from a public that has widely accepted the story of the exchequer’s “maxed-out credit card”. Opinion polls suggest a sense of resignation that has allowed the functions of the state to be dismembered, fragmented and degraded as deliberate policy.
Diminished trust in the public realm is part of the explanation for the Brexit vote. “Take back control” was a perverse slogan that cleverly captured a feeling of things falling apart. That is because the idea of the state has been systematically disrespected and derided as a concept to be regarded with suspicion. People may rely in their daily lives on myriad unseen state services, yet they are encouraged to despise the bureaucrats who keep everything running.
The shrinkage was no emergency operation to balance the books: it was the realisation of a 40-year rightwing project to downgrade, downsize and disparage the public realm. David Cameron and George Osborne committed to push the state down to 36% of GDP or less, for ever, and Philip Hammond repeated that target in the March budget. Current spending is now just under 38%, with the target of 36% to be reached in 2020. Getting there means a volume of public services greatly smaller than in equivalent European countries. People ask why German roads, health services and civic environments are so superior: the answer is that their state is larger than ours, at 44% of GDP. Why is Danish wellbeing so much higher than ours? Their state provides more comfort, being in receipt of 50% of GDP.
In the general election, Brexit occludes the question, which ultimately every election has to be about: are we willing to pay for a state that secures wellbeing? The Tories won’t admit that Brexit demands more not less government. Theresa May has talked of the good that government does, but has declined to face the fiscal consequences. For its part, Labour (and the Scottish Nationalists) won’t acknowledge that soaking “the rich” and raking in more from uncollected taxes won’t provide enough revenue: median earners and all of us have to pay more.
Meanwhile, the NHS is now squeezed more harshly than ever in its history. Schools are losing staff in the latest cuts. This April’s removal of an epic £12bn in credits and benefits will cause inequality to take off as steeply as it did in the 1980s, according to the Institute for Fiscal Studies, with a 50% rise in child poverty by 2020.
What is less reported is how the thinning of public services weakens bonds of community as the emblems of orderliness disappear – the vanishing park keepers, estate caretakers, station masters, guards, crown post office counters, district nurses, health visitors, local police on the beat and community support officers.
When she was home secretary May cut police numbers by a fifth. Crime is falling across the western world, but the work of the police is increasingly about reassurance and social order. The thinning blue line fills the gaps left as other services stretch and snap: it is the last resort. On a typical night shift in Bedford and Luton, police hear the cries of distress, the suicide attempts, the terrified, the psychotic and the shrieking family rows that remind us that people will always need help; the police are often the only ones left to respond.
What is the social glue that binds us to Britishness if not the things we share collectively? Government underpins pride in who we are. When fine old town halls from Sheffield to Hornsey, north London, are sold off as boutique hotels, when councils sell slices of parks, when libraries and local museums close, we lose what defines us. Contracts with Capita, Virgin, Sodexo and the rest are written on water. The sale of everything from power stations, property and basic transport systems to foreign powers is a form of treason other countries resist.
Marketisers, outsourcers, asset-strippers and state-shrinkers are not patriots: they surf the world on seas of money, undermining community and nationality. The NHS and the BBC stand as last bastions, but under constant assault from anti-statists affronted by their very success.
Part of the dismembering has been the deliberate complexification of services and blurred lines of responsibility. Successive governments’ attitude to services has been to cut bits off, chop them up and, bizarrely, force their limbs to compete with one another, trying to portray them as commercial. Schools must be academies in chains with reassuringly market-oriented names – Enterprise, Oasis, Reach or Harris (named after the carpets magnate). The NHS must be broken into trusts vying with each other for business. The frail must hold individual budgets to purchase their own care privately. Some of these services may be good – but this approach indicates a flight from the idea that the state itself does good.
Outsourcing, offloading and privatising leaves less of the state and less that is ostensibly ours, even though it is still paid for by our taxes. Gigantic, mainly overseas companies and often foreign governments own slabs of utilities, land, property and infrastructure that were once ours.
Not even our sewage belongs to us. The government created a company called Tideway, comfortably underpinned by Treasury guarantees, to work on behalf of privately owned Thames Water to construct a £4.2bn tunnel to carry sewage alongside the river. Thames Water is owned by shifting international investors, whose sealed, ambiguous contracts include Chinese corporations supervised by the Communist party, although cheaper finance could be raised by the British state. The National Audit Office is rightly anxious about the taxpayer’s huge liabilities, but Tideway managed to frighten ministers with warnings of raw sewage spilling into the Thames. So who gains?
r Ian Byatt, a former Treasury official who was the first head of Ofwat, the water regulator, gives a forthright answer: neither the fish in the Thames nor households will benefit. “Thames Water is an incredibly complicated company. There will be an array of extra dividends sliced and diced into the pockets of all these different interests along the way.” The state could do simpler, smaller schemes more cheaply. Paying needlessly high interest rates, the cost of the super sewer will be added to all Thames Water customers’ bills, who have no choice but to pay. Digging has just begun.
Since the Thatcher privatisations, the UK has been subject to a giant experiment in the ability of markets to sustain the common interest, with light-touch regulation. Over time, the failures have multiplied. The government itself now inveighs against the cartel grip of the big six energy companies. Markets dashed for gas, regardless of security of supply; they ditched nuclear and only turned to wind and solar with hefty state incentives, then stopped as soon as those were axed. However faltering, only the state can confront climate change – which is why the right clings to climate change denial.
Localism has often been another assault on the state, breaking up central government to cast chunks down to impoverished councils, handing over the axe. Cuts of a fifth in English council budgets between 2010 and 2015 have been grossly unfair, poor Liverpool cut hardest, rich Dorset least. Soon councils will keep their own business rates, worsening regional inequalities: Westminster makes so much it could pay its denizens a dividend, while Middlesbrough is left penniless.
Our ageing population needs more, not less state support. Take podiatry, an unglamorous backwater of the NHS, cut back by commissioners struggling to finance A&E or maternity. But feet matter, too, never more than with the rocketing cases of type 2 diabetes. Southampton is typical, where we found how cuts to NHS foot care have serious consequences for mobility: every week in England, 135 diabetics have gangrenous limbs amputated that could have been saved if foot ulcers had been caught sooner. Across the NHS, cuts in prevention lead to higher spending later.
In Shropshire, the sudden axing of the Link bus service connecting 5,000 people across a string of villages has wrecked many lives: those without cars who used to travel daily to Bridgnorth for work, shopping or doctor’s appointments are now left isolated with just one weekly bus, driven by a volunteer. Compare that with the borough of Reading, a rare council that clung to running its own buses when John Major privatised most: it makes £1m a year so efficiently that 93% of journeys are taken by its popular buses, not cars. That’s just one challenge to the prevailing politics that claims the state always does everything worse.
What confronts Britain in the 21st century is a class of problem that only collective action can solve. How to stop inequality being amplified generation after generation? The country’s 3,500 children’s centres were one of Labour’s best achievements, founded on all the evidence that helping children in their early years makes most difference. But many centres have shut, had vital services ripped out, leaving others no more than shells for skimpy private nurseries. But on a recent visit to Springfield children’s centre in the West Midlands district of Sandwell, we saw parents on the edge of despair rescued; listening to their stories should weaken the hardest anti-state heart.
Only the state can deal with looming problems in productivity, regional imbalance, energy, climate change, automation, reskilling. Take research and development. The Sheffield engineering startup Magnomatics is developing a magnetic gearbox for hybrid cars that was invented at Sheffield University in 2000 and cuts fuel consumption by 35%. Such projects take patience and funding, both in scarce qualities among short-termist venture capitalists; only state support with adequate research funds could see the gearbox through to use in cars for 2022. But Britain has a lot less R&D for these “catapult” schemes than competitor countries.
Take another case of creative state funding: the Royal Shakespeare Company took seven years to develop the worldwide hit Matilda the Musical, “the most difficult and expensive show”, according to the executive director and “nothing short of a miracle” according to reviewers. No commercial producer could invest that much for so long: now it yields great dividends for the RSC and the exchequer. But though the cultural sector, broadly, brings in £77bn a year, funding for Arts Council England has been reduced and the next generation of creators are being stymied by a Gradgrind curriculum with few schools able to afford art, design, drama, music and dance teaching.
The old anti-state canard pretends private enterprise creates national wealth, while governments spend and squander it. After 2010, the Conservatives claimed public employment “crowded out” private initiative, so they cut more than a million public sector jobs. Yet wealth creation depends on a strong state, not only for protection of property by the law, but for decent roads and railways, regulators ensuring fair markets, for the health and education of private enterprise staff, and for the same clean air we all breathe. The business world has a mistaken cultural reflex that pleads for low tax and less government, yet everything that makes commerce flourish relies on a strong state.
Public servants soldier on with swelling caseloads but less pay, keeping going, often heroically dedicated. Fixed to a 1% rise, by 2020 they will be earning no more than they were in 2004, according to the Resolution Foundation. Of course, not all are heroes: vigilant management has to ensure the public face of the state is kind, effective and innovative. Polls show great popular affection for public servants whom people know – their child’s teacher, their doctor, their local police. Yet they have imbibed the political poison that thinks the state is probably bad value, inefficient and extravagant. A few fat-cat chief executive stories die hard. Is that where their taxes go?
This is a hymn of praise to what should be blindingly obvious – the triumph of our collective endeavours. Years of chiselling away at the foundations of trust in good government mean it needs saying again and again: what we do together through paying our taxes and concerning ourselves with our common good is worth more than any private gain through market transactions.
Margaret Thatcher said you will always spend the pound in your pocket better than the state will; her political heirs believe it still. But they are profoundly wrong in fact and in principle. What we buy together is worth infinitely more than anything we can buy in a shop. In a renewed state lies strength and identity – and a reclaimed sense of lost nationhood.