How Blair revived the loonies

All political leaders eventually lose touch with reality: so insulated are they from ordinary life, so surrounded by bag-carrying sycophants, so protected from day-to-day needs to find seats in restaurants, run for buses, recharge phone batteries or carry loose change that they become blind to what is glaringly obvious to everybody else. This is why, on the rare occasions when they look up from their red boxes, they become almost comically exercised by such matters as litter on the streets and cones on motorways. But alarmingly, the time-span between taking office and taking leave of reality grows ever shorter. For all their talk about globalisation, British ministers find it increasingly hard to see beyond the tight little village formed by Westminster, Whitehall and Millbank, where trivial local issues and ancient grudges assume disproportionate importance.

Thus, new Labour failed to understand what it ought to have understood from the beginning: that once devolution was in place, the people of London and Wales would always want the Ken Livingstones and Rhodri Morgans of this world, not the Frank Dobsons and Alun Michaels. This is not really because London and Wales wish to assert their independence of national government - that wish, in truth, scarcely existed (witness the narrow vote for a Welsh Assembly in last year's referendum) before new Labour tried to impose its own men. Rather, it is because devolution is itself flawed. If new Labour had created genuine new power centres, then London and Wales would have readily supported responsible and moderate politicians because, on the whole, people prefer power to be exercised responsibly and moderately. But Tony Blair and his ministers did something quite different: they created centres for protest and demand, ideally suited to the garrulousness and flamboyance of a Livingstone or a Morgan.

The nub of the matter is that new tiers of government were created in both London and Wales without tax-raising powers. Their electors will, therefore, vote cheerfully for anybody who supports higher public spending - whether on sleeker trains or cleaner valleys - knowing that they will not have to bear any of the cost themselves. Quite rationally, they calculate that the best candidate is the one most likely to squeeze extra money out of central government. They may eventually conclude that the onside politician is better placed to achieve that than one at loggerheads with Whitehall. But for the moment, it does not look that way. Mr Michael fell in Wales because he failed to get money out of the Treasury. Mr Livingstone, as Greater London Council leader in the early 1980s, raised taxes across London to help finance cheap fares from which some parts of the capital benefited far more than others - before the courts stopped him. Perhaps, if he embarrasses the government sufficiently (and nobody is more skilled than Mr Livingstone at causing mischief), he can pull off a bigger version of the same trick.

That new Labour, dedicated as it is to sound public finance and the restraint of leftist irresponsibility, failed to see this from the beginning almost beggars belief. Having devoted so many years to burying the left loonies and the old Labour spendthrifts, it now presents them with the perfect platform. Paradoxically, a devolution system carefully designed to stop the excesses of a Ken Livingstone revives, at least temporarily, his political credibility. Perhaps it is all a devious trick intended finally to convince us that neither regional government nor old-style socialism - anything other than new Labour centralism, in fact - can actually fulfil their promises.

We must hope not. The Scottish Parliament, which does have tax-raising powers, promises, for all its faults, a more constructive approach, adapting national policies to local preferences, as it has done with student fees. But new Labour lacks any coherent account of what it is trying to achieve through devolution, other than a vague acknowledgement that people want more of a "say". Indeed, it may be said that new Labour lacks any coherent account of what it is trying to achieve overall. Its recipe for public services is to set tighter and tighter objectives and standards of performance from the centre. How is that compatible with local or regional autonomy? Until it can answer such questions, new Labour's devolution project will continue to flounder. As we went to press, it was still unclear whether or not Mr Livingstone proposed to run as an independent. Mr Dobson would make a better mayor. But if Mr Livingstone ends up in office, it will serve new Labour right.

This article first appeared in the 28 February 2000 issue of the New Statesman, Why the party still needs its soul