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I cant believe its not Blair, by Tony Travers

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27 May 2005

One day soon, the British public are going to wake up and find that their prime minister has changed. But will they be able to tell the difference between Tony Blair and Gordon Brown? Tony Travers tries to find out

To have two major political parties in the process of changing their leaders could easily be seen, as Lady Bracknell might have put it, as carelessness. While the Conservatives gear up for a summer of political intrigue and double-dealing (more generally known as a leadership contest), Labour is faced with the question of when and how to switch from Tony to Gordon.

The Tories are actually making a far more fundamental decision. The very direction of Conservatism for the post-Thatcher era is finally to be determined. The party could continue down its path of recent years, coupling mild social authoritarianism with an attempt to shadow Labour's tax and spend policies. Alternatively, it could move to a new model, including a combination of social liberalism, lower taxation and a smaller state. Time – and a new leader – will tell.

But while Tory leadership contenders David Davis, Kenneth Clarke, Sir Malcolm Rifkind, Liam Fox, David Cameron, Alan Duncan and Uncle Tom Cobleigh fight themselves to a standstill, it is widely accepted that – by 2008 at the latest – there will be an orderly transfer of power from Tony Blair to Gordon Brown.

The orderliness of the change could, of course, be challenged if 'awkward squad' Labour MPs suspect a Brown government would look too much like the decade-long Blair one.

All of which begs the important question of how a 'Gordon' regime would differ from a 'Tony' one. The recent general election and Queen's Speech provide starting points for the detail of Labour's third term. How much of what is currently proposed would survive a change in leadership?

This question goes to the heart of whether or not Brown has sat in Number 11 Downing Street secretly wanting to take the government in a different direction from Blair's. Experts ranging from biographers to style gurus have attempted to work out the difference between the two. None has provided a definitive answer. When the chancellor looks in the mirror, does he see Blair reflected or not? One day soon, the whole of Britain will find out.

Public Finance readers can absorb the fluctuating debate concerning the size, content and management of public services from the comfort of their desks. Every boost in spending, efficiency initiative, new budget and set of cuts can be seen as it flashes past, like a comet. No government in modern times – probably ever – has treated us to quite so many bright ideas, initiatives, plans, strategies and funding streams. Councils, hospitals, schools, constabularies, fire brigades, social landlords, benefits offices and social services departments have been deluged in new policy.

The important thing about all this activity is that it would never have happened without the chancellor's approval. Indeed, Brown's unchallenged intellectual brilliance, coupled with his desire to use the welfare state more constructively, has provided a major element of the intervention and modernisation that have characterised the past eight or so years. In many ways, Britain has been dominated by detailed Brownite social engineering in the years since 1997. Blair, by all accounts, is a broad strategy man.

Indeed, it is worth considering some of the essential domestic policy areas where the chancellor has obviously been interested in modernisation. In his first Budget report, published in July 1997, he committed himself to 'modernise the welfare state' by ensuring that people had 'the right financial incentives to take up work… and encourage a culture in which rights go hand-in-hand with responsibilities'. The same 1997 Budget included details about the need to expand public-private partnerships and the use of the Private Finance Initiative. All very Blairite.

Subsequently, the Treasury's Budget reports and related documents published each year have revealed new interests. Regional productivity, social inclusion and skills have been among the topics pursued. In April 2003, a document entitled Public services: meeting the productivity challenge provided rich insights into the chancellor's view of the public services.

In a section on 'the scope for markets', a carefully written middle way was outlined. On the one hand, the Treasury stated: 'It is important to ensure that choice is not promoted at the expense of equity or efficiency.' On the other, it said: 'Consumer choice can be efficiently and equitably introduced into those aspects of the public services where users possess sufficient information about their needs to make optimal choices, and where it is efficient to have more than one service provider operating in a given locality.' Schools and hospitals were singled out as good examples of where such choice was successfully being introduced.

There can be little doubt that Brown has been a radical at the Treasury, happily using the UK's growing public sector in an attempt to do a number of different, though related, things. These include improving skills, increasing productivity and providing a set of carrots and sticks for social security recipients.

Of all the arguments and splits that have been identified between the prime minister and his chancellor, few have concerned the management of the economy or public sector reform. While Blair has been painted by many critics as a Tory in Labour clothing, Brown has managed to maintain an aura of Leftish, oldish Labour about him.

This differentiation looks even odder when a number of Brown's other policy concerns are dragged into the daylight. In the 2003 Budget, the chancellor raised the idea of regional public sector pay bargaining. Indeed, the benefits of even greater levels of public service pay delegation were suggested. The Treasury has driven the Gershon Review and has loudly demanded major efficiencies from the public sector.

Moreover, it was the 2004 Spending Review that signalled the 'topping out' of Labour's short, sharp period of public expenditure growth. It is now planned that spending will rise only in line with the growth in gross domestic product and, therefore, that spending will level off at around 42% of the whole economy. In Brown's prudent Britain, there is to be no continuation in the years after 2006/07 of the kind of spending growth seen between 2000 and 2005.

Enough. The case that New Labour's economy has reflected its chancellor's world view is surely a strong one. This is not to say that if Brown became PM, he would not change elements of his approach. Indeed, it is likely he would want to mark his accession with one or more Big Bang reforms that would purposefully signal a difference.

This leads us back to Labour's third-term programme. The manifesto, Queen's Speech and the new government's early actions suggest there will be plenty more modernisation of the public sector – some by stealth, some visible. PPPs and PFIs will continue to be a key element in the procurement of schools, hospitals and other public infrastructure.

New provision will be purchased from a mixed market of private health corporations (NHS), academies (schools), arm's-length housing companies (social housing) and not-for-profit social carers (children's services). Parts of the core public sector are to be reformed by the use of new kinds of staff: police community support officers, classroom assistants and contracted-out office staff.

Beyond all of these new ways of delivering public provision, hospitals, schools, colleges and universities will be required to compete in a quasi-market where resources follow clients. Failed institutions will be shut down and, in some cases, bulldozed. Step by step, Labour will extend the use of private companies,

not-for-profits, social enterprises and new kinds of public servant.

The demands of a tightening economy and slowing public expenditure growth will provide incentives for the Blair-Brown government to use all the above means (and more) to maintain the pressure for improved state sector productivity and value for money.

Other public sector reforms foreshadowed in the general election are unlikely to be affected by the transfer of power. Changes are promised to the government of Wales, presumably to move the principality closer to the Scottish model of parliamentary devolution. Brown is a known supporter of regional economic decision-making.

The transfer of education funding from local authority to Whitehall control from 2006/07 would not be stopped by a Brown premiership. Nor would Deputy Prime Minister John Prescott's Sustainable Communities housing policies. The new focus on 'communities' and neighbourhood governance is hardly contentious, although it will prove difficult to drive through.

A big issue that Brown as prime minister might view differently from ex-PM Blair is the reform of local government taxation. Sir Michael Lyons, one of the chancellor's select band of problem-solvers, is due to report on local authority finance at the end of 2005. Any radical proposals and, for that matter, the 2007 council tax revaluation, could end up being implemented during the period when the transfer of power is taking place. Will the fact that he would not have to live with the consequences make Blair more willing to consider a major change?

Or, for the opposite reasons, will Brown want to keep the lid on the whole issue? Or might the soon-to-be-ex-chancellor want to institute one final, radical, tax reform?

If and when Brown becomes leader, Britain will have a prime minister who is steeped in every detail of the economy, public expenditure and taxation. Although his all-embracing knowledge will erode as other matters crowd out the time available to stay up-to-date with every aspect of Treasury policy, Brown will surely want to keep the new occupant of 11 Downing Street on a short leash. He will be First Lord of the Treasury in a way Blair has not been. This will be a daunting challenge for any new chancellor.

This still leaves the question of how a Brown premiership might significantly differ from a Blair one. Surely Brown would want to make absolutely clear that a major change was taking place. In the way he signalled a change of style by making the Bank of England responsible for interest rates, he would, from day one, want to show that his tenure as prime minister would be distinct from Blair's.

Options might include a radical new approach to taxation, or a new constitutional settlement for regional and local government, or a further onslaught on child poverty. Or very different options. For the public services, the long-discussed move to regional or local pay bargaining would probably move closer, as might an additional assault on efficiency. Brown has been keen on intervention to achieve particular social, economic and educational objectives. He is unlikely to be less of an activist once he takes over the top job. And, it is important to remember that he is rather more eurosceptic than Blair.

Both men emerged from Labour's long years in the wilderness of opposition. This factor more than any other has forged their broadly common approach to taxation and public services. 'Never again' must have been their joint reaction as they have reflected on Labour's nightmare from 1979 and 1997. The Conservatives, now in the midst of a similar dark night, will eventually find a leader and policies that, together, can win a general election. It will take more than a single Parliament to do so. Labour is reasonably well placed to reform from within by changing its leader.

All prime ministers need luck and good judgement. Brown has shaped many of Blair's economic successes for almost a decade. As prime minister he would have to be effective – and lucky – across the full range of government activities. We will have to wait until long after both men have disappeared from the scene to judge which of them was the more radical, the more challenging, the more Blairite. Or perhaps, in time, Brownite.

Tony Travers is the director of the Greater London Group at the London School of Economics

PFmay2005

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