MY dad is 89 years young this month. From time to time, he reminds me of advice his grandfather gave him: “If you have a reputation for getting up at 6am every day, you can lie in until 9am.”
I recalled this dubious conclusion while considering how Britain’s public spending crisis worsened over the past three decades and who was responsible.
Gordon Brown, Tony Blair’s chancellor of the exchequer from 1997-2008, was known as “Prudence”, a reference not to the Siouxsie And The Banshees track of the same name, but to his reputation for fiscal conservatism.
Conversely, he also signed off more reckless private finance contracts than any other politician. His rationale was that Britain could not afford to build the hospitals, schools, bridges and prisons we urgently needed, so he would get private companies to do so instead.
It was New Labour’s “flagship policy”. Thatcher had the poll tax, New Labour had PFI. And history shows they were equally disastrous!
READ MORE: Ruth Davidson attacks Nicola Sturgeon over ITV election pundit role
I recall Brown’s successor Alistair Darling (then the MP for Edinburgh Central) telling me, when I was lobbying him to oppose PFI, that he “really didn’t care who owned the new Royal Infirmary, as long as the doctors and nurses were NHS employees”. He had no compunction about throwing the rest of the staff under a bus.
His attitude reminded me of Deng Xiaoping, the Chinese Communist Party leader, who in 1979 abandoned his Marxist principles to embrace free-market capitalism, insisting:
“It doesn’t matter whether the cat is black or white as long as it catches mice.”
As Britain’s disastrous experiment with PFI conclusively proved, it did in fact matter. Millions felt the painful consequences of PFI. It inflicted enormous damage both to Britain’s health budget and to the lives of millions of people dependent on vital services.
Scotland saw seven of its hospitals privatised: Edinburgh’s Royal Infirmary and Royal Hospital for Children and Young People (the latter sold off by the SNP); Stobhill Hospital in Glasgow; Dumfries Royal Infirmary; Wishaw General; Hairmyres in East Kilbride; and Forth Valley Royal in Larbert. Hundreds of billions of pounds poured out of essential health budgets to pay obscene profits to companies such as RBS and Macquarie Capital Solutions of Sydney, Australia.
Keir Starmer faces bigger budget problems than Tony Blair and Gordon Brown ever did
There are 717 outstanding PFI contracts in the UK today with a capital value of £54.7 billion. But the overall cost to taxpayers will be at least £301bn by the time they are all paid off (source – UK Treasury 2012 figures).
The financial consequences of PFI are clearly catastrophic and help explain why our public services are still haemorrhaging cash today.
Professor Allyson Pollock, my good friend and the leading PFI critic, put it succinctly, writing: “PFI is where you pay for three NHS hospitals and get one – and even that doesn’t belong to you.”
The excruciating legacy of PFI is ongoing. “The next [Labour] government won’t have any money,” Paul Johnson wrote in The Times last week. “If you haven’t gathered that by now, there’s probably little value in repeating it.”
The respected director of the Institute for Fiscal Studies warned that the incoming Labour government will “need to cut spending or raise taxes” because “hospital performance is arguably the worst in the NHS’s history; our prisons are at crisis point and in the last six years there have been six times the number of bankruptcy notices issued to local authorities than in the previous three decades”.
READ MORE: Scottish Labour urged to stand up to Keir Starmer over two-child cap
At the same time, he wrote: “Taxes are at their highest level, as a proportion of national income, than at any time in the past seven decades. However much Labour politicians might want to avoid these questions before the election, they will have little choice but to confront them afterwards.”
Keir Starmer faces bigger budget problems than Tony Blair and Brown ever did. Yet Starmer’s political plan is designed to denigrate the Tory brand while keeping their policies. So, what is to be done? The Scottish Socialist Party advocates several remedies.
First, renegotiate all existing PFI contracts to stop them draining off vital public funds from health, education and social justice budgets. Such renegotiation is commonplace in business. That’s what corporate lawyers are for.
Second, when the current deals run out the “assets” themselves must revert to the NHS, prison service or local authorities who paid for them in the first place.
Third, we should introduce a windfall tax on the profits of those companies who benefited so handsomely from PFIs over the past 30 years and restore the funds lost to our vital public services.
I expect Labour to win the election on July 4 but I do not expect Starmer to implement any of the measures above. And that is, in many ways, why I expect him in turn to be very unpopular sooner than most people think.
The struggle for social justice – and independence for that matter – will, in my view, then race back up the political agenda. And our movement needs to be far better prepared for that eventuality than we are presently.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here