The cost of apathy

Blair's massive majority means New Labour can continue its obsession with private finance

As Shirley Williams said, the New Labour victory was a mudslide not a landslide: an event without grandeur or transforming energy which oozed over a blank electorate. The scale of the indifference, and contempt, was far more impressive than the size of Tony Blair's majority.

An enormous amount of hard work will be needed from responsible commentators and politicians in the coming days to explain away the mass abstention. Even the most scarred cynics did not predict that turnout would fall below 60 per cent; that Tony Blair would have the dictatorial power of a crushing Commons majority after persuading a mere one-in-four adults to vote for him. Blair couldn't even capture a majority of those who were inspired to visit the polling stations. The New Labour benches will be heaving for the next four years, for all that, and his Ministers will be able to get away with pretty much anything.

For that small band of eccentrics who (i) voted, (ii) voted New Labour and (iii) voted New Labour with enthusiasm, the distortions of our brazenly undemocratic electoral system are an irrelevance. All that matters to the faithful is that the Labour Party has an historic second full term. In the first, they now admit, it wasted its days spending a smaller proportion of national wealth on hospitals and schools than its Conservative predecessors. Their leaders also managed to invest less in infrastructure than any government since 1945. But now the electorate - or, rather, one quarter of the electorate - has freed Labour from the chains of prudence. The party can at last fulfil the mission of its working-class founders by throwing money at those in our 'community' in the greatest need: big business.

A great cause of cynicism was the political and media obsession with the trivial differences between the parties on taxation. With the partial exception of Europe, none of the great issues of the day - global warming, Star Wars, inequality - was allowed to trouble the electors' heads. But on one serious point Blair was as candid as he ever can be. The money Gordon Brown has hoarded will be thrown at private hospitals and managers.

'What do you think the private sector can do that can't be done by the public sector?' asked Jeremy Paxman last week.

'You have a very good example with the PFI [Private Finance Initiative] programme on both school and hospital building,' replied Blair. 'They have been successful - we have built the hospitals on cost and on time.'

Have you really, PM?

The only excitement on a dreary election night was Richard's Taylor's win in Wyre Forest. Worcester women and Mondeo men left their pebble-dashed houses to vote for the consultant from Kidderminister Hospital because of the damage the wildly imprudent costs of allowing the private sector to run hospitals inflicted on Middle England.

The cheapest way for Blair and Brown to build hospitals would have been to pay upfront through taxation - it is always cheaper to pay upfront than get a mortgage. Alternatively, they could have borrowed at the lowest interest rates available - governments don't default on their debts and thus get the best terms. Instead they have preferred to allow private companies to borrow and then build and manage public works - and claim rent from the taxpayer for up to 60 years.

The consortia must pay higher interest rates than the state and make a return for their shareholders. Their prices have been exorbitant. Kidderminister revolted because the cost of the new Worcester Royal Infirmary rose between 1996 and 2000 by 118 per cent. To meet the bill, the health authority had to downsize the Kidderminister Hospital. Taylor was returned as the only independent in the new Parliament because the electors couldn't understand why they should vote for their New Labour MP when his party had ruined a modern hospital to feed the demands for profits from the consortium which controlled the Worcester infirmary.

In June 2000, just after Kidderminister Hospital had been wrecked, Blair opened the privately-built and managed Cumberland Infirmary in Carlisle. It seemed a Third Way triumph. Within weeks ceilings collapsed and operating theatres were flooded with sewage. Last month, surgery was cancelled after the wiring caught fire. 'If this is what Blair has in mind for the NHS, watch out,' Dr Paul Dyson, the chairman of the infirmary's medical committee, said. 'The developers always think of the bottom line. You have to hold a gun to their head to get them to repair anything.' The assumption at the hospital is that we will pay £500m over 30 years for a ramshackle building which would have cost £67m if Blair and Brown had kept it in the public sector.

From Kent to Cumbria, every time New Labour has let private consortia build or renovate hospitals, beds and staff have been cut to generate income. Privately-financed hospitals are an 'urban disaster', said Sir Stuart Lipton. Sir Stuart isn't a raving Leftie. He's the chairman of the Government's Commission on Architecture and the Built Environment.

The Treasury protests that private firms are taking on the risk of cost overruns. The Institute of Directors reported that 70 per cent of its members with PFI contracts agreed they were excellent opportunities to make money while running only 'manageable' risks. Brown has also been heard to mumble an arcane Treasury formula which purports to prove that letting corporations build and manage public works delivers value for money. 'You can spend days trying to understand it,' said Allyson Pollock, professor of health policy at University College, London. 'Or you can take it from me that it is a conjuring trick, which has been rigged to justify pumping huge sums to private companies.'

I took it from her and also noted her point that New Labour's Health and Social Care Act may well require the victims of strokes and other acute illnesses to pay for their care after six weeks. Prof Pollock was also insistent that I grasped that Blair's 'concordat with the private sector' would put NHS patients in ill-equipped and dangerous private hospitals which dumped 142,000 patients in A&E departments last year. The private sector couldn't cope and needed the despised NHS to clean up its messes. Health is being privatised by stealth.

The government's affection for the private requires an understanding of New Labour networks as well as its Thatcherism. To extrapolate from a recent example, Jack Straw was desperate to privatise prisons before he was moved from the Home Office last week. He called in an 'expert' to advise him. That expert was Patrick Carter, a friend of Straw's who has been best man at both his weddings. Carter made millions from private nursing homes. He recommended that the jails should be run like Railtrack. Contractors should control the buildings and services while the Home Office should deal with the human freight of prisoners.

Martin Narey, the director-general of the Prison Service, calculated that the cost-per-prisoner doubled when they were placed under the Private Finance Initiative. His study has not destroyed the credibility of the Carter report that awaits David Blunkett, the new Home Secretary, who did so much to encourage business to move in on state schools when he was Education Secretary.

In the next few weeks, New Labour's favourite think-tank, the Institute for Public Policy Research, will publish a report which, those who have seen it tell me, recommends that the Government pushes ahead with privatisation. It was financed by £200,000 of sponsorship from KPMG, which earns fees from advising the private sector on how to move into the NHS market, Norwich Union, which is taking over GPs' surgeries, and Serco, which bids for private prisons and PFI hospitals.

Among the many businessmen who supported New Labour in the election was Bryan Sanderson, chairman of Bupa. When he's not running private health care, he's a director of Corus. When Corus sacked thousands of steelworkers, Blair feigned indignation. Corus hired David Hill of the Bell Pottinger lobbying company to defend the company. The phoney tiff over, Hill was seconded to spin for New Labour during the campaigning before returning to the lobbying game tomorrow. He's married to Hillary Coffman, who works for Blair in Downing Street.

I could go on plotting links, but as we celebrate the mudslide, I feel that on behalf of all the corporations and lobbyists I should thank you, the dear little people who voted New Labour. Your task now is to pay your taxes to many of the above and remember what Neil Kinnock nearly said: 'If New Labour wins, I warn you not to fall sick.'


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Nick Cohen: the cost of apathy

This article was first published on guardian.co.uk at 02.55 BST on Sunday 10 June 2001. It was last updated at 02.55 GMT on Wednesday 21 November 2001.

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