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A flawed triumph
on 18 October 2013
In many ways this is an important book, delineating not just many horrible blunders but also the reasons why they have occurred. Two particular examples are the Poll tax and the part-privatisation of the London Underground upgrade, but there are many - too many - others (and that's a criticism of government, not the book itself). Others could have been added, the whole area of "defence" spending being one: from the TSR2 fiasco of the 1960s to the business of the two unneeded and unavailable for years aircraft carriers of the present day; but defence spending blunders could make up a whole book in themselves.
Chapter 14 on the part-privatisation of the Underground (brilliantly and appropriately titled "Down the tubes") is a complete horror-story, and King and Crewe list (pp 207-14) the 13 major weaknesses that led to possibly as much as a £30 billion (£30 billion!) loss on the whole farrago. The two worst of these, in my view, were (a) the crazed decision to adopt the scheme because it would take the borrowing off the (government's) books to reduce (but only nominally) the Public Sector Borrowing Requirement - unnecessary, because LU could have issued bonds for the money and have them guaranteed by the government - and (b) the fact that the whole thing was designed so that the private sector would take the risk, except, of course, that when things went haywire the private sector dumped the risk back on the government. But these two are features of all Private Finance Initiative schemes, and one criticism of the book is that it might, instead of majoring on the Tube PFI, have considered the PFI racket as a whole, as there are so many, especially in the NHS, that have put an intolerable load on their finances.
Going back to the Tube fiasco, elsewhere in that chapter the authors mention another weakness, which should have been No 14: the fact that, although by 2000-2003 the government had already spent a great deal of money on it, but that abandonment at this stage would have not only meant starting again with a U-turn but admitting that Ken Livingstone (then Mayor of London) had been right to oppose the scheme. This petty attitude to Livingstone, incidentally, mirrors exactly Thatcher's attitude to his opposition to her (un)employment policies and subsequent spiteful selling off of County Hall. Not at all pretty.
The authors consider over a dozen blunders, before going on in Part III to try to get at the reasons why they happen, and there are a dozen of these, including the foolish practice of moving ministers around between ministries (they might have said the same about moving civil servants too; an old civil service colleague of mine reckoned that you would be moved on as soon as you'd gained a decent understanding of your current job, and it certainly felt like that) and the utter inability of parliament as it is presently constituted to exercise any element of real accountability on the way things are done by government.
So far so terrific, and the book makes great (though utterly depressing) reading. There is, however, something of a black hole in the middle of it that does rather reduce its value. The authors make clear that they are judging how effectively policy changes were carried out, but not the wider effects of those policy changes, and "the differentiation between them raises, inevitably, fundamental issues of culture and values" (page 5). Well, yes: but there's more to this than simply saying whether something was done well: there is the much bigger question of whether it should have been done at all. They justify this with the example of Rommel, whom everyone could agree was a brilliant and fairly blunder-free general but who fought in an evil cause. But consider the poll tax; that was carried out fairly effectively, but it all came to grief because it was fundamentally unfair. How much of the fact that it was unfair should have entered considerations? This tends to make it difficult to separate the how from the why. And was it the worst of the blunders considered, as they suggest? I would rather doubt that: it contains many elements of stupidity and heedlessness, but so does the whole business of going over to private pensions with all the mis-selling that generated, but with the added dimension of malfeasance, greed and plain crookery for which, as far as I'm aware, no one served a single day in prison. For me, that makes it a far worse blunder even than the poll tax, because the consequences were harm to millions on a very large scale, whilst the consequences of the poll tax were more concentrated on the political, in particular the fact that it did for Thatcher, wonderful though that was.
But where this approach comes most seriously to grief is in the consideration of privatisation. Here the authors blithely state that, although "many sceptics and doom-mongers condemned as a blunder-in-the-making the Thatcher government's privatisation of most of the UK's public utilities during the 1980s ... privatisation is now almost universally-accepted as having been a success." (page 5). These words ring spectacularly hollow now, when the utility companies have turned into appalling rackets for creaming off vast profits for shareholders, bonuses for the top echelons of the companies that own them - and huge price rises for the public. Worse, the companies have loaded themselves up with debt (lending vast sums to themselves so they can pay themselves back with large fees) so that the interest paid can be set against tax so that they pay hardly any at all. If this is a success, I hate to think what a failure would look like. These rackets are virtually all monopolies - this applies to water and power supply the railway companies and all the rest of the corporate brigands, and it shocks me that the authors are able so easily to separate the process of privatisation (which was a success, I suppose) from the wider consequences (which certainly are not). For this reason, I have downrated the book to three stars, despite its many strengths in other respects.