The United Kingdom suffered a civil servants’ strike on January 31st, which attracted remarkably little public attention. In fact, some 700 government offices were closed, including tax authorities, passport offices and national museums. The tax strike merely delayed tax proceedings by 24 hours, only those who happened to want a new passport to go skiing became aware that the passport offices were closed, and only those who happened to be taking their children for a museum day felt notably inconvenienced.
The strikes were concerned with the prospect of job cuts, rather than with issues of pay. 55,000 jobs have already been cut, and a further 84,000 are due to be cut by March 2008. They are aimed to make savings of about $43 billion a year. This is interesting in a number of ways. Politically, it will be more difficult for the Labour Party to claim that no cuts are possible without serious cuts in public services. If Labour had made $20 billion of employment savings before the next General Election, expected in May 2009 or 2010, the Government will have to take the responsibility for them. Labour is the party which represents state employees. There would have been far more significant protests if such cuts had been made by a Conservative Government.
We are beginning to see some of the outlines of a Brown administration, though we still do not know when Brown will take over as Prime Minister, probably between July and September. As Chancellor, Gordon Brown was extremely cautious in Labour’s first years of office, from 1997 to 2001. He relaxed the spending policy in the second Labour term, from 2001 to 2005. He is now trying to restore the strict expenditure policy of Labour’s first term.
There is some risk in this policy of antagonising Labour’s own supporters. For instance, Labour has always been regarded as the party of the National Health Service, but the Conservatives are now campaigning against Health Service cuts, and there are more cuts in the social services to come.
The problem of controlling expenditure in Brown’s first years as Prime Minister is not confined to the size of the Civil Service, or the level of social expenditure. There is the issue of consultants inside and outside the Civil Service. Very large sums have been spent on consultants to reinforce the professional skills both of national and local government. The Conservative Opposition, if elected, would certainly have cut back on the number, and cost, of consultants. It seems likely that Gordon Brown would do so, and would lay the blame on Tony Blair.
However, there is also the cost of foreign and defence policy to be considered. The United States forces are overstretched by fighting in the Middle East War on two fronts, in Iraq and Afghanistan. The much smaller British army is even more overstretched, and past defence cuts have meant that the army was under equipped. “Snatch” vehicles, designed to be used in the back streets of Belfast, are still being used in Basra, despite promises to replace them before Christmas. These expose the British soldiers to unnecessary risk, and some 20 soldiers have been killed in the under protected vehicles.
The split between Tony Blair, as Prime Minister, and Gordon Brown, as Chancellor, which has existed from the beginning of the Labour Government, has meant that Brown would not authorise defence expenditure to equip troops to fight the wars that Tony Blair agreed to support. It seems likely that Gordon Brown will want to cut rather than increase the Defence Budget. In order to do that, he is more likely to reduce than to reinforce British troops in the Middle East. Even now, there are 7,000 British soldiers in Basra, but there are said to be 32,000 Iran agents in the Shia area of Iraq. This situation cannot be regarded as satisfactory, by Blair or Brown, or indeed by President Bush.
The White House must therefore be concerned that a Brown administration will be a peace administration, reflecting more closely the views of Congress than those of the President. This does not, however, mean that the White House ought to hope that Tony Blair remains in office. Tony Blair’s time is up – he has nothing like the authority of his early years. Gordon Brown is the man to deal with, on foreign policy just as much as financial policy, on Iran as much as on Iraq.
for The Daily Reckoning Australia