The life of the Blair Government is drawing slowly to a close. The comparisons between the last year of the Thatcher administration and the current position are becoming stronger. This is not entirely connected with the 15th anniversary of Thatcher’s resignation earlier this week. It looks like open warfare has broken out between Blair’s supporters and those loyal to his Chancellor of the Exchequer and probable successor Gordon Brown.
Like many countries, Britain has a potential demographic crisis of an aging population not being able to meet commitments to pay retirement pensions in the future. This has been exacerbated by the failure of the State pension to properly meet the needs of those receiving it. That came about by a sleight of hand during the Thatcher days that incidentally Bush is trying to introduce into the US system. Until the change, pensions rose in line with the average increase in wages. Under the current scheme these benefits only rise in line with the Retail Price Index. This does not seem too bad until you realise that in the growing economy the RPI increase is less than that for wages, maybe by one or two percent. Not much until you factor it over the 20 years or so it has been in effect. Pensions are now around two-thirds what they would have been if the pensions/wages link had been maintained. This means those without private pensions from their employers or their own savings have to rely on means-tested social security benefits merely to live. This makes the system far more expensive and increased poverty in old age.
Blair appointed Lord Turner to look into the problem and his report is due this week. Ahead of it, Blair’s replacement for the disgraced David Blunkett at the Department of Work and Pensions, John Hutton (no not that Hutton) made a speech on Thursday stating any changes must meet five tests – to promote “personal responsibility” and be fair, affordable, simple and sustainable.
Earlier in the week a paper commenting on the proposals in the Turner report was leaked. This gave the reservations Gordon Brown has over some of the key proposals, restoring the wages link, increasing the basic pension to avoid the means-testing and in the long term raising the pension entitlement age from 65 to 67. (See here for more details. The Brown challenge to the calculations which back Turner’s proposals is a shot across the bows to one of Blair’s pet projects of fundamental and radical reforms to a number of policies before he retires (see also my diary on his plans for promoting nuclear power stations) After the failure in Iraq, an iffy UK Presidency of the EU and the watering down of the G8 reforms favouring the third world, Blair is desperate to get his “legacy” in place before he goes. Brown’s threat to shelve the pensions reforms mean that he is going to have to stay on to get them through, in the face of objections from both the Chancellor and much of his own party. The leak of the Brown letter might at first be seen to advantage him but the warring houses in Downing Street are more crafty than that. Brown is seen as stick-in-the-mud and disloyal.
The usual way 10 Downing Street deals with leaks like this is to set up an inquiry that more than likely will fail to find the person responsible. Unfortunately for the Blair camp, Brown has set up an internal Treasury inquiry into the leak and it has a far greater chance of success. This is how the BBC’s political editor summarises the position
Nick Robinson said Mr Brown was “furious” about being portrayed by the opposition as an enemy of reform, and believed there were “elements around Tony Blair” encouraging this view.
“As for the leak of that letter yesterday, the Brownites are pretty convinced that it was a Blair ally, not with the prime minister’s knowledge or backing, but that letter was leaked for that reason, to damage Gordon Brown,” he told BBC Radio 4’s Today programme.
Those used to Kremlin watching reading of Robinson’s reports may well focus on the section I have put in bold. Very often, these sorts of denials should be taken as confirmations. The inference is that the Brown camp believe that Blair or those very close to him are trying to undermine Brown. Their only motive could be to defuse calls for an early transfer of leadership.
The unholy alliance between the “reformer” Blair of New Labour and the far more socially inclusive Brown goes back to the days when they were both seen as possible leaders after the death of John Smith. The “Granita” agreement for Brown to stand down in favour of Blair was made at the now closed resturant of that name. The price was that Blair would stand down in favour of Brown after being Prime Minister for a period. Brown’s understanding was that this would happen in the second Parliament. Blair has now openly expressed his hopes to stay on until just before the next election at the end of their third term in office.
Like Thatcher, Blair has become increasing distanced from the electorate. Both have had disasterous “town hall meeting” style broadcasts at the elections before their fall. Thatcher was challenged about the sinking of the Argentinian warship Belgrano while it was sailing away from the Falklands. Last May, Blair fell down badly answering a question about getting an appointment to see a doctor. Blair might not be at Thatcher’s royal stage where she announced “We are a grandmother” and the then new £1 coin was nicknamed a “thatcher” on the grounds it was “cheap, brassy and pretending to be a sovereign”. He is however getting just as reckless about the legislation he wants to introduce. The Iron Lady had her Poll Tax. Blair as ever seems to want to out-do her with plans for National Identity cards, 90 days detention without charge for terror suspects, privatising the cheaper, simpler procedures so NHS hospitals are left to do the expensive, difficult and dangerous, taking control of schools away from elected local councils and putting them in the hands of sponsors willing to pay a comparatively small contribution to open “city academies” (including one body that believes in creationism) Sir Humphrey Appleby in “Yes Minister” would describe these policies as “bold and brave”.
Blair must surely be having restless nights remembering that Thatcher was finally brought down by her Chancellor Geoffrey Howe. His resignation speech describing her “in power but not in control” precipitated a leadership election challenge. Brown may very well not resign but as “Rome” is screening on the BBC he is starting to get a “lean and hungry” look. Blair and Thatcher’s premierships started among a lot of high expectations. As Thatcher left Downing Street for the last time as PM and cried in the back of her limo, you had to have heart of stone not to shed a smile. Only crocodile tears will be wept for Blair when he goes as his cravenly power-hungry crew climb aboard Brown’s ship.