Welcome to the new Independent website. We hope you enjoy it and we value your feedback. Please contact us here.


Tony's in his grotto dispensing capitalism

When Anthony Crosland published The Future of Socialism in 1956, he made two assertions. One was that the economic problem was finally solved: the only problem was about how to distribute the fruits of abundance. The other assertion was that capitalism was firmly under control, partly through the power of government to pass laws and make regulations, and partly through what he called the "countervailing power" of the trade unions.

In the 20-odd years that passed immediately after the publication of this work - the years that remained of Crosland's relatively short life - the second assertion seemed to hold, while the first appeared vulnerable. The trade unions continued to enjoy great, indeed, excessive power. But the economic problem, so far from being solved, appeared to grow more intractable with every year.

It is difficult for those who were not taking an interest at the time to realise how political talk in the 1960s was dominated by the "balance of payments" and by the value of the pound sterling. Who ever hears of the balance of payments now? And why is sterling discussed only in relation to its performance against the euro? Clearly things have changed.

In the 1970s the economic problem became even more menacing. It was the decade of the great inflation, brought about mainly from international causes over which we could do nothing. There was the more-than-trebling of the price of oil in 1973. There was the United States' deficit financing of the Vietnam War, which produced longterm results. Since about 1980 there has been a change.

The economic problem, though it may not be "solved" in Crosland's absolutist sense, is not the cause of so much perplexity. It is significant that Mr Gordon Brown is the first Labour chancellor not to be confronted by a financial crisis in his first two years of office. This may have had less to do with the merits of Mr Brown or of his predecessor than with the way things are going, though they may change. Crosland may have been right after all.

Where he has been proved wrong, virtually weekly, is over the behaviour of private corporations and in the attitude of the Government towards them. Last week the Daily Mail published an article by Ms Angela Mollard about a cold-calling telephone centre in Liverpool employing hundreds of overworked, underpaid and dissatisfied women together with a few men. Ms Mollard hazarded that we might be returning to the bad old days of coal mines and typing pools. Sorry, Angela, but a coal mine was nothing like a typing pool. It was - if you can find any surviving mines, still is - dirtier, more dangerous, infinitely harder to work in. Still, I see what she was getting at, even if the comparison was unapt.

And yet repetitive, low-paid, insecure work is the inevitable consequence of the policies for which the Mail incessantly campaigns. So does Mr William Hague, inasmuch as he campaigns about anything. Only last week one of his front-bench colleagues, Mrs Angela Browning, was denouncing an extension to maternity leave as a "burden on business".

Mr Tony Blair is ambivalent. His government has introduced the minimum wage and accepted the European social chapter. If he sucks up to business, as he does, business undoubtedly sucks up to him. The display round the hall at the last Labour conference was a veritable Father Christmas's grotto dedicated to late 20th century capitalism. But all this is froth, as are lunches, conferences and people being photographed on platforms. What matters is what the Government does, whether through legislation or by other means. Here the present administration's policy is to divest itself of public assets whenever possible. If a new enterprise is to be set up, it is to be by means of private finance - as, apart from a lottery grant, was the new, unusable Wembley Stadium. I could have told them that at the time.

A few years ago, when Labour were in opposition, I met Mr Andrew Smith at some function or other.

"You'll never have heard of me," he said. I confessed that, sadly, such was the case.

"I'm generally considered to be rather boring," he went on.

This was a novel social difficulty. I said that he had clearly mistaken public opinion on this point or that public opinion was itself mistaken in its estimation of Mr Smith. Or something very much like that.

Shortly afterwards I heard him speak at a party conference. It was on the subject of Air Traffic Control, and the Major government's proposal to sell the service off to private enterprise. Mr Smith was not boring at all. Quite the reverse: he made the most impassioned speech I had heard for a long time in favour of public ownership, accountability and control. Today Mr Smith is Chief Secretary to the Treasury and an enthusiast for the selling off of the ATC service, or part of it, to the private sector.

The enthusiasm displayed by Mr John Prescott is even more surprising. Mr Prescott did not come to his post a virgin. In opposition he spent a good deal of time thinking about the subject. His broad conclusion was that, though most undertakings should be retained in the public sector, necessary finance should be raised in the market. And yet this is the opposite of the policy he is pursuing in government. Finance for the London Underground should, he says, be raised not by the issue of bonds (a bond being a guaranteed loan paying a dividend) but by making over of part of the enterprise to a private company.

This was intended to be Railtrack. Then there were two developments: the Paddington rail disaster, and Mr Ken Livingstone's promise that in his campaign to be mayor of London he would make an issue of the sell- off. Accordingly, to forestall Mr Livingstone, Mr Prescott invented some spurious grounds for eliminating Railtrack. The company, unpopular as it is, may still be able to recover damages from the Government.

Even so, Mr Prescott is not preferring Mr Livingstone's solution of selling bonds. To this extent, the latter was wrong in saying that Mr Prescott had performed a U-turn. He is sticking more or less to his old policy. He expects some other company to turn up in Railtrack's place. But why should anybody help him out now?

Mr Blair's function has been to compound the confusion. Increasingly he is coming to resemble George IV, who convinced himself that he had fought at the Battle of Waterloo. Mr Blair believes not only that the Bill to abolish fox-hunting was thrown out by the hereditary peers but also that he himself had voted in its favour: both of which are untrue. On Wednesday at Questions he seemed to believe that the delay in the completion of the Jubilee Line had been brought about by the ineptitude of public enterprise, which accordingly could not be trusted to have anything to do with the new Undergound. In fact the extension of the line was the work of private firms alone.

It looks as if Crosland may have been right after all about the end of the economic problem. But capitalism, far from being controlled by governments, is even freer than it was in the middle of the 19th century. Largely this is down to modern electronic technology. It may be that the economic problem is solved precisely because of the freedom which national governments allow to multi-national companies because they have no choice in the matter. But it is doubtful whether the workers in these and other companies will continue to view the world in this benign light - even if Mr Blair does.