Column

New Labour promises but old Tory policies

Labour’s warm embrace of the Private Finance Initiative for the NHS stands in stark – and disturbing – contrast to the impression it had previously given to Labour voters, says Charles Webster

Reservations expressed about the Private Finance Initiative in the last issue of healthmatters are a reminder that the Blair government is turning its back on Labour’s traditional policies. In the run up to the 1997 general election, Labour earnestly contested privatisation in all its insidious forms. This undoubtedly reflected the public mood and was a great vote winner.

But after New Labour’s election victory, privatisation was suddenly expunged from Labour’s demonic vocabulary, leaving the new government free to pursue commercialisation of various kinds with just as much energy as its Conservative predecessors.

The NHS provides one of the most notable examples of this U-turn. Jointly the government’s Private Finance Initiative and Primary Care Group initiative represent the greatest drive towards privatisation in health care provision this century.

Labour’s sudden and enthusiastic adoption of PFI was a surprise. The unwitting public was led to expect the opposite of the policy now being pursued. On the general issue of privatisation Blair’s own utterances reflected the tone adopted by the Labour leadership as a whole. In 1986 he claimed that privatisation was ‘destroying the idea of public service in Britain’. In the following year he called privatisation the ‘closest thing, post-war, to political corruption’.

PFI was conceived around this time but it was only in the mid-1990s that it emerged as a practical option for the health service. Labour immediately recognised that PFI was a serious threat to the NHS. The 1995 Labour policy document Renewing the NHS denounced PFI and expressed strong disapproval of Conservative attempts to dragoon hospitals and health authorities into long-term PFI contracts. PFI was regarded as inconsistent with Labour’s concept of a ‘unified public service’.

When Sheila Masters, the Conservative government’s PFI supremo, announced that Labour would promote PFI, she was rebuked by Labour’s health spokesperson, Margaret Beckett, who complained that Masters ‘had no authority from me to say that PFI is acceptable within the NHS’ (Health Service Journal, 1 June 1995). This was consistent with other statements by Beckett. For instance, in a speech to radiographers in April 1995, Beckett denounced market testing and PFI as ‘creeping privatisation’.

Harriet Harman, Beckett’s successor, was even more explicit in her attacks on PFI. In a BBC Radio 4 Today programme, Harman was asked whether Labour objected to PFI. Her response was: ‘We certainly do, because under this government this is a new trick to privatise the health service. They are using the PFI as a sort of ramp for privatising the NHS’. Then in a speech in Birmingham in January 1996, she said: ‘The latest scheme for privatising the NHS is PFI: more accurately, the privatisation initiative.’ And in Health Campaign News in April 1996 she concluded that ‘the Tories have made NHS hospitals reliant on private finance for capital spending – a policy strongly opposed by Labour’.

When Chris Smith replaced Harman as Labour health spokesperson, he immediately embraced the anti-PFI policy with gusto. At the Labour Party conference in October 1996 he attacked all forms of commercialisation and privatisation in the NHS. He specifically criticised the decision to build a PFI hospital at Stonehaven as proof of the Tories’ ‘privatising agenda’.

In the run-up to the election, The Times (10 February 1997) understandably concluded that central to Labour’s health policy was the belief that Tory internal market and PFI policies had demoralised the health workforce and, more ominously, taken the NHS well down the path of privatisation.

It was only in the few weeks before the election that Labour leaders softened their line on privatisation and conceded that PFI might be modified rather than abandoned. Few among the electorate would have been aware of this shift in position, and it is very doubtful whether Frank Dobson became health secretary with any positive enthusiasm for PFI.

It is profoundly unsatisfactory for political parties to secure electoral success on the basis of one policy and then proceed to implement its opposite. Nobody would expect dogmatic adherence to historic policies that were no longer appropriate, but in this case there was no weight of evidence in favour of ditching the anti-PFI policy so loudly proclaimed in the run-up to the 1997 election.

PFI was never well justified and it remains no more credible than rail privatisation. If the Labour leadership was morally confident about the need for a change in its policy towards PFI, why was this not signalled more convincingly to the electorate? As it stands, PFI is one of many instances where Labour bowed to the will of corporate interests without bothering to tell the public of its intentions. Against this corporate influence the scepticism expressed in healthmatters, or in the recent compelling critique of PFI in the British Medical Journal by Allyson Pollock and her colleagues, are likely to count for little.