Labour can’t make it better

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As the phoney election campaign runs into the real one we will hear more and more from the government about its economic achievements. Blair has already launched six new pledges to make the country fairer, safer, healthier and with no unwelcome foreigners. Labour claims are endorsed by a recent book on the second term of the Blair administration. Written by Guardian journalists Polly Toynbee and David Walker, Better or Worse? has no doubts: “By 2005 Britain was a richer and fairer society than in 1997. It was healthier, safer and in many respects better governed…Many fewer people – children and pensioners especially – lived in dire hardship. Most people felt the warm glow of growing income and wealth…Crime kept falling, schools and hospitals improving, work was plentiful…Blair’s era was a better time to be British than for many decades” (p.327-8).

The increase in expenditure

It is true that the British economy has done better than many of its rivals in the last few years in that the rate of growth has been above the global average and this has allowed some significant increases in spending. Whereas the global trend has been a decade on decade decline of production, the British economy has experienced a slight rise in the period after 1999. This in turn increased the amount of money being taken by the government and was the foundation of the increase in government expenditure from 37.0% in 2000 to 42% in 2004, although this has actually only taken the rate back to that of 1996.

Does this mean that things really got better? Toynbee and Walker point to falling waiting lists, reduced employment figures, reductions in poverty and improvement in the lot of pensioners to answer yes. A brief look beyond the headlines gives a different answer.


The government has trumpeted the fall in hospital waiting times and is busy setting new targets to reduce them further. Toynbee and Walker agree and resent the fact that people are not more grateful: “Why were people not more impressed with the sharpest ever falls in waiting times? Because those grumbling on waiting lists of six months were not on the far longer waiting lists five years previously” (ibid, p.43). It is certainly true that much money has been spent on achieving this target, along with various statistical ruses and outright deceptions along the way, such as the unofficial waiting list to get on the official one. More significant are the facts that hospitals only account for 10% of what the NHS does - “most health work takes place in GP surgeries and in people’s homes” (ibid, p.18) – and that good health is related to standards of living and quality of life that are not directly affected by a service that only responds once people are already ill. Health inequality is stubbornly linked to class and no amount of admonition to smoke less, eat better and be better parents has affected that: “The link between child poverty and health is strong and cyclical. Children born into poverty have worse outcomes across a range of indicators. For example, they are more likely to be born prematurely, have low birth weight, die in their first year of life or die from an accident in childhood…Children and young people from lower income households are more likely to report longstanding illness and less likely to report good or very good general health…By middle age, women and men from more disadvantaged backgrounds have death rates that are double those of women and men with advantaged family backgrounds.” (Child Poverty Review, HM Treasury, June 2004, p.63).


Whatever else Blair’s Britain did, it worked… from 2001 to 2005 some 1.5 million jobs were created; a million or so disappeared. The net result was near full employment…” (Better or Worse?, p. 131). The official unemployment figures certainly show a steady decline with rates below that of major competitors; but they mask a situation of a persistent level of economic inactivity at around 25% of the population. This is because the fall in the number officially unemployed is mirrored by the increase in the number on incapacity benefit, as Toynbee and Walker are forced to acknowledge: “The number claiming sickness and disability benefits hit a record 3.1m in the second quarter of 2004, up from 2.8m. Many were de facto unemployed. Indeed the number of adults registered as economically inactive rose to eight million in 2004, up 124,000 on the previous year. Among them were over a million aged under twenty-five – a huge and dismaying waste of potential” (ibid, p.131-2).


“By 2001/02 – the latest data available – steady progress had already been made towards our milestone target of reducing the number of children in low-income households by a quarter between 1998/99 and 2004/05 – achieving a reduction of around half a million children at a time when high income growth significantly raised the low-income threshold…This means that incomes for the poorest households are growing more rapidly than for the average household”. (Opportunity for All, Fifth Annual Report, Department for Work and Pensions 2003, p.46).

Such reports of progress, leading to the promise by Blair to abolish child poverty by 2020, have to be set in the context of a steady increase in the number of children living in poverty over recent decades: “The UK has had one of the worst records on child poverty among industrialised nations. The proportion of children living in households with below 60 per cent of contemporary median income more than doubled between the late 1970s and mid 1990s. This was largely due to: demographic changes, in particular a growth in the number of lone parent families; a concentration of worklessness among low-skilled households; and a widening wage distribution with increased in-work poverty and weaker work incentives.” (Child Poverty Review, HM Treasury, June 2004, p.15). This merely reflects the continuing polarisation between the classes: “…over the past 20 years the incomes of the poorest have fallen in real terms (i.e. allowing for inflation) as the richest have grown. Between 1979 and 1999/2000, the poorest tenth in the income distribution saw a real rise of only 6 per cent in their ‘after housing costs’ (AHC) incomes, compared with an average rise of 80 per cent, while the top tenth gained 86 per cent” (Poverty: the facts, Child Poverty Action Group 2001, p.158-9). This situation has not been halted, let alone reversed: “At the end of the 1970s, the tenth of the population best off had 21 per cent of disposable income. By 2003 they had even more, 29 per cent. But the first five years of the twenty-first century may come to be distinguished in the eyes of historians by the explosion of top incomes. On Blair’s watch a relatively small number of people got grotesquely richer” (Better or Worse?, p.50).


Toynbee and Walker are at their most blind on the question of pensions. They begin by declaring that “The number of pensioner households living in poverty fell by a fifth by 2005” before murmuring “although two million old people still lived below the poverty line” (ibid, p.63). The real issue, the plans to dismantle the pensions system posed in the recent Turner report, is of no concern. This assault has been going on for twenty years with the promotion of private pensions, the introduction of second pensions and the erosion of the basic pension. Now various dramatic alternatives are proposed: “Either:(i) pensioners will become poorer relative to the rest of society; or (ii) taxes/National Insurance contributions devoted to pensions must rise; or (iii) the savings rate must rise; or (iv) average retirement ages must rise” (Pensions: Challenges and Choices. The First Report of the Pensions Commission).

That we live in a society in which increasing life expectancy becomes a threat is an extraordinary indictment of that society.

Drowning the truth

New Labour has become the master at drowning the truth in a sea of facts. By concentrating on this or that facet, by pushing one or another issue to the fore, be it waiting lists, unemployment figures or children in poverty, the bigger, longer term picture is ignored. To take the last as an example: “Since 1996, living standards have improved the most for children who were living just below the poverty line. But children in households with the lowest incomes have benefited much less…According to government surveys, 1.1 million children live in households with less than 40% of the national average income. Four out of 10 of these children live in households that do not receive any of the main means-tested benefits – even though they may be entitled to claim” (BBC News Online, 23/6/03, reporting research from the Institute for Fiscal Studies). Above all, any changes in the situation, any apparent improvements in living standards, are based on the increased exploitation of the working class. Although it is not possible to look at this in detail here, it is important to note that this increase came not from increases in productivity, where Britain lags behind many other developed nations, or from advances in technology or skills, but above all from an increase in the hours worked. While contracted hours have gone down there has been an increase in the amount of overtime worked, both paid and unpaid. The level of unpaid overtime in particular increased sharply between 1988 and 1998: from 25.2% to 40.6% of males working fulltime and from 27% to 57% of females working fulltime (From: Working long hours: A review of the evidence Vol.1, DTI November 2003).

The Labour Party has shown the ruthless capacity and determination of the ruling class to extract more from the working class through an increase in exploitation, and then use some of that money to present a distorted picture to hide the reality of the situation. Against ruling class attacks workers must learn how to defend their class interests with equal determination.

North 2/3/05

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