This is an extremely interesting and important book. It explains very thoroughly the achievements and limitations of Labour’s economic and social policy since 1997. It makes possible an informed discussion of what could be done about manufacturing, inequality and public services in a third Labour term. This would be crucial learning if only we can get the conditions right to win the third term and retain a commitment to Labour values.
The book is about Gordon Brown’s stewardship of the Treasury. It is sympathetic, but provides a ‘warts and all’ account of Brown’s working practices. It makes clear the price that has been paid for the commitment to live within Tory spending plans for the first two years, which resulted in lower capital spending on public services in Labour’s first term than in any comparable period in recent decades. The figures are shocking. Capital spending in the public sector was cut in successive years from £29.2billion in 1975-6 to £5.4billion by 1981-2. Public sector net capital expenditure in the four years of Kenneth Clarke’s Chancellorship was £12.3billion, £12.2billion, £11.7billion and £5.8billion in 1996-7. Thus the voluntary two year freeze was imposed at a very low level. During the four years of Brown’s first Chancellorship, public sector net capital expenditure was £5.2billion, £6.1billion, £4.8billion, and £5.7billion 2000-01 (all at 2000-2001 prices). And thus we still have private affluence and public squalor, a degraded transport system and massive underinvestment in health and education!
It would not be fair however toThe book makes clear the price paid for the commitment to live within Tory spending plans for the first two years, which resulted in lower capital spending on public services in Labour’s first term than in any comparable period in recent decades. conclude that Gordon Brown has given up on Labour’s long standing commitment to the reduction of inequality and investment in public services. Brown’s values as a son of the manse – he said of his father “He taught me to treat everyone equally, and that is something I have not forgotten” – and his early commitment to the Labour movement has ensured that Labour values are deeply embedded in him. But he and Blair, who together invented New Labour, shaped it as a massively defensive project built on the reforms driven forwarded by Kinnock and John Smith but inspired by the scars of the defeat of 1992. And thus we got the commitments to no rise in the standard or top rate of tax and to Tory spending plans for the first two years which produced a sense of growing disappointment and the unprecedently low – 59 percent – turnout in the election of 2001.
But Gordon Brown and his highly influential political adviser, and later Chief Economist, Ed Balls, were playing a Brown’s commitment to reducing poverty has been sustained through his attempts to redistribute by wealth through tax credits to reduce poverty in Britain and his interest in efforts to reduce global poverty.long game. They intended to expunge Labour’s reputation for poor financial management – and the memory that every previous Labour government had tried to spend and then been hit by financial crisis – in order to be able to pursue Labour goals with a solid economy behind them. It was probably Brown’s commitment to this agenda that cost him the leadership – as he brutally slapped down Shadow Cabinet colleagues who tried to make or hint at future spending commitments when he was Shadow Chancellor. The achievement of Gordon and Prudence, through the courageous decision on the independence of the Bank of England and the wisdom of an inflation target of 2.5 per cent in contrast with the European Central Bank’s deflationary ‘less than 2 percent’ have helped to restore Britain to full employment and given Brown probably the best reputation of any Labour Chancellor.
There are, however, important lessons to be learned about the way the high exchange rate that this very reputation helped to secure, has squeezed manufacturing and worsened long term Balance of Payments and productivity problems. There are also lessons from the failure of the Private Finance Initiative to deliver the hoped for gains of improved investment and efficiency in the public sector. But Brown’s commitment to reducing poverty has been sustained through his attempts to redistribute by wealth through tax credits to reduce poverty in Britain and his interest in efforts to reduce global poverty.
The book provides a very clear account of the disputes over the euro. It records the fascinating changes in Tony Blair, Robin Cook and Gordon Brown’s positions, but provides a persuasive account of the wisdom of the decisions that have been made. The problems flowing from the addiction to spin, multiple announcements and control freakery in the first term and an excess of targets in the second are fully recorded. One senior official commented of Brown’s first term:
Every battle has to be won. If not, the Chancellor is terribly angry. He lives life on the edge of a volcano. He drives himself extraordinarily hard and had incredibly high expectations of himself and the people around him …
This book is an invaluable read for those who want to win a third term for Labour values. It shows Gordon Brown with feet of clay – like every one else – but as a big man with core values, playing a long game on behalf of those values. It leaves me with an enhanced belief that if he does become the leader and learns from the mistakes of the Blair years, he could rescue the best of the Labour Party and bring in a government of which we could be proud.
Photo credit: Gordon Brown as Prime Minister at the European Parliament 2009. Downing Street; Crown Copyright. Source.
