Not the General Election

Already bored with the election campaign? The <em>NS</em> and the Institute for Public Policy Resear

Revive a public realm. By Will Hutton

The idea of a public realm is such a normal part of our world-view that it is only as it begins to be undermined that we realise how vital an area of our lives it represents. Yet compare our own complacency about this erosion with the excitement that permeated Europe in the late 18th century as old hierarchies and modes of thought were discarded, and a new public space was created that allowed genuine exchange about ideas. Thoughts and hopes that had hitherto been only private could now go public. The air was pregnant with a sense of political possibility, together with the knowledge that such enfranchisement would cascade through people's lives and inner imaginations.

This was the Enlightenment. It was about democracy and citizenship, certainly, but beneath these lay an enormous optimism that the suffocating social and psychological closure of feudalism was losing its grip, and that people must seize the moment to create not just an accountable political system, but a larger context that permitted each and every one their full individual expression. We are social beings, and we need a functioning and vital public realm to complete our capacity to be fully social - otherwise we privatise conscience and social action in precisely the way our 18th-century forebears were so anxious to escape.

What has this to do with the general election in 2001? In my view, everything. If today's political class wishes for something better from the campaign than voter cynicism and falling turnout, then it should champion the public realm in all its dimensions, and not collude any longer in the corporatisation of British public life. This means once again opening up genuine political argument. Part of the job of politicians in a democracy is not just to win power; it is to ventilate argument, without which the public realm becomes degraded into an empty charade - and from which we all recoil. That implies courage and conviction, but also a belief that there are open to us genuine choices, which the state can pursue even if business objects.

We must be able to do things that, yes, imply taxation and regulation and, yes, are done by the state alone and not in partnership with business. In short, we must start to reclaim the public realm from the notion that, because only business is efficient, no public action is possible unless performed wholly by, or in partnership with, large corporations.

Genuine liberty in a democracy is about universal enfranchisement in which every citizen knows that he or she can be part of a process that can make a difference - even if it is a right that is sparingly exercised. Once you concede that a host of courses of action are ruled out because that might infringe the liberty of the rich or of business, then our enfranchisement is qualified and we become unimportant cogs in someone else's scheme of things - the condition of the people in pre-Enlightenment Europe. So while efficiency is plainly important, our consciences and sense of citizenship are more important still. Nor do I accept, in the wake of the orgy of waste, duplication, avarice, miscalculation, fraud and hype that has crippled the world telecoms industry, for example, as a consequence of privatisation, deregulation and market forces, that definitions of business efficiency are so superior to anything provided or performed by the public sector.

The reinvention of the public realm, along with renewing faith in public action and the potential of public enterprise, has become one of the most pressing issues of the moment. Paradoxically, the Conservative Party recognises this in its anxiety to preserve the old institutions of the British state - the public realm as the Tories knew and loved it - and in its resistance to British integration into the European Union. But these are misguided reactions to the pathology I describe. Opposition to the EU is not a route to renewing the public realm, but a means of accelerating its decline. The EU is a way of reclaiming political possibility because a global business civilisation needs global governance, and the EU is an indispensable building block for this. Democracy, as practised by the old British state, with its secrecy and its centralisation, was no longer viable; we needed the changes launched by new Labour.

In these respects, new Labour has a closer appreciation of contemporary urgencies. It is, however tepidly and imperfectly, the pro-EU and pro-constitutional-reform party. It has begun to make the case for public spending, and for the taxation that necessarily must finance public spending. It is true that it has not yet developed the self-confidence to qualify the liberties of business, nor to develop public regulation and public enterprise where they are obviously needed. A public stake in the railways and all our national networks - from mobile phones to water distribution - is a case in point. But its traditions and values mean that, at this juncture in our national fortunes, it has a better understanding of how to protect the public realm than its opponents.

Will Hutton is the director of the Industrial Society

Privatise everything. By Madsen Pirie

Privatisation has brought tremendous benefits to the industries and utilities that it freed from state ownership. People may use it as a whipping boy, especially in the case of rail. Yet the facts show enormous investment pouring into the rail network; the first increase in passenger traffic in half a century (a hefty 25 per cent); and a safety record better than when the state ran it. People forget how bad it was.

If a privatised health service had made patients wait 18 months for treatment, or put them on trolleys in the corridors, or kept the organs of dead babies without asking or telling their parents, or given more than a quarter of patients a disease they did not have to start with, privatisation would have been given the rap. But no politician even talks of privatising the health service.

It is the big public services of health, education, pensions and welfare that stand to gain most from the next wave of privatisation. There is nothing special about them that requires them to be provided by state employees, or organised nationally on a collective, political basis. They can each benefit from the choices, opportunities and variety that privatisation can bring.

It will become apparent during the coming parliament that the latest bout of throwing money at the National Health Service will work no better than the previous bouts. Realisation will dawn that a more rational structure than the centralised monolith is required. Although the NHS is often described as politically sacrosanct, opinion polls show that what the public values is healthcare free at the point of delivery, not the structure and organisation of the present NHS.

Privatisation will proceed by giving hospitals independent, free-standing status. Most of them will not be profit-making, but will have a status like that of charitable trusts, just as many private hospitals do today. Patients will be referred to them by GPs, and the government (or taxpayer) will foot the bill. The difference is that GPs will shop around on behalf of their patients, selecting the most experienced, best-qualified, best-equipped hospitals, with the best record, or the ones whose patients rate them the most highly. They will be able to choose hospitals that are currently private if they wish.

Since GPs are already technically self-employed, giving private status to individual hospitals will in effect privatise the production, but not the finance, of healthcare. In place of central control will be local autonomy and the opportunity for local initiative. New hospitals, and new types of smaller, specialist hospital, will spring up. Treatment will be better and more immediate. People will be encouraged, through medical savings accounts, to obtain treatments not available through the NHS.

Education will be treated similarly. David Blunkett, the Secretary of State for Education, has already taken huge strides to make education do what parents want, jettisoning most of the ideological baggage of the comprehensive movement. The measure now is increasingly of output, rather than of what goes in. The next steps will involve making all state schools independent and free-standing, as the hospitals will be, and making it much easier for new schools to be started and for bad ones to be closed. The emphasis will be on quality for all, rather than on some kind of spurious equality.

Parents will choose which schools they prefer, from a much greater range. There will be specialist schools covering such areas as maths, science and music, even sport. The effect will be to direct state funds to the schools that parents favour. Today's fee-paying schools will feature among the choices. This will privatise the production of education, even though it will still be free for most parents at the point of consumption.

Pensions are largely private already, in that most people retiring have access to income other than that provided by the state, and which provides for the bulk of their resources. The next step will be to turn the basic pension into a fully funded one, with people paying perhaps 12-14 per cent of income into a personal account, invested on their behalf, and which remains their property to pass on when they die. This differs greatly from pension rights that depend on the goodwill of future taxpayers, and which disappear on death.

The state will still need to make payments into these funds on behalf of those who cannot do so for themselves. But most people will earn enough during their working lives to provide for a comfortable retirement, especially if this is started off by a first payment of £1,000 to each child from what are now called baby bonds.

This particular privatisation will do more to spread wealth to classes that have not previously owned substantial property than anything else done so far. It will also make it easier to privatise welfare by making these funds the foundation of an insurance-based welfare system.

These next steps for privatisation are the logical extension of what has already proved to be an economic revolution. Once they have been made, people will be much more in charge of their own lives, and less dependent on the state. It is quite likely that they will all be achieved under a new Labour, rather than a Tory, government, thus supporting once again that old Klingon proverb, "Only Nixon can go to China".

Madsen Pirie is the president of the Adam Smith Institute

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