was amused to see the Conservatives at their annual conference trying to forget Margaret Thatcher and, as politicians put it, “move on”. If only the rest of us could do so. In almost every area of public life, her legacy haunts us.
Take the Government’s dedication to the Private Finance Initiative, which is to be applied to the entire secondary school building programme. This is almost wholly the responsibility of Thatcher and her successor, John Major.
Their neglect of the fabric of hospitals and schools left Labour with an enormous backlog of inefficiency when it came to power. It could have financed new buildings through tax increases or through heavy public borrowing. But Thatcher, it believed, had turned the country permanently against high taxation. And borrowing is always death to left-wing governments: the financial markets do not trust them to pay back. Interest rates soar, speculators sell the currency and the country is hit by an economic crisis of the sort familiar to all previous Labour governments.
So ministers turned to a third way: the private sector would build, and maintain schools and hospitals with public authorities paying them back over a long period, usually 30 years.
This is the most powerful argument for the PFI: it is the only way to do in a few years the work that should have been spread over the previous two decades. Yet I do not find this wholly convincing. Labour did not need to repeat its “no tax rises” pledge in 2001. Against William Hague, it would probably still have won if it had promised to expropriate everybody’s garden for use as communal play space. Nor need Labour any longer be afraid of borrowing. Britain’s public debt is under 30 per cent of GDP, one of the lowest in the western world (Italy’s is 91 per cent, Germany’s 46 per cent).
I wonder therefore if ministers are attempting something craftier. Just as Thatcher locked future Labour governments into low public spending, are Tony Blair and Gordon Brown now trying to lock future Tory governments into high spending? The building programme proposed by the schools minister, David Miliband, will cost an estimated pound;45bn. This is a mind-boggling sum - equivalent to the whole of central government revenue as recently as 1978.
As critics of the PFI point out, it is public financing on the never-never.
Future generations will have to pay the money back out of taxation. To commit them in this way is said to be irresponsible. But is it? The point of the PFI is that it protects public capital expenditure from the vagaries of economic crisis and political change. In the past, building programmes were always cut first when chancellors reined back spending. In future, even a Tory chancellor will have to keep them going, because his Labour predecessors signed the PFI contracts. Improbable as it may seem, Miliband could become as sanctified a figure in the education service as Nye Bevan is in the health service.
But there may be another twist. Will Tory chancellors be content to have their hands tied by Labour commitments? Surely not. And what could they do? Well, think about it: what does a building society do if you decide not to keep up the mortgage repayments? Yes, we could have secondary schools owned and run by the Jarvises, the Norwich Unions and the Focus Educations who are now getting the PFI contracts - PFI could open the way to fully privatised secondary schools. Have new Labour ministers thought of that? Or is it, perish the thought, their intention?
Peter Wilby is editor of the New Statesman
