Despite all the claims of New Labour, the remorseless decline of British capitalism continued unabated, leading to a deterioration in social conditions and growing inequality. The gulf between the classes under the first Blair government had become a chasm. The gap between the highest-paid and the lowest-paid workers was now at its greatest since 1886. Wealth inequality was growing faster in the UK than in any other country in the industrialised world, including the USA. According to Tony Atkinson, warden of Nuffield College, Oxford, since 1993, while there was a steady increase in the inequality between rich and poor in America, the divide in Britain has jumped by two and a half times.
Ranking social deprivation region by region and using up to 33 different categories such as low income, unemployment, poor health, and poor access to education and training, the Department of Environment placed large parts of Manchester, Liverpool, Middlesbrough, and Newcastle among the 100 most deprived places in Europe. In scenes reminiscent of Engels’ Condition of the Working Class in England, the level of tuberculosis rates in some parts of London was heading for epidemic proportions. The London borough of Brent has a TB rate on a par with Russia – which after a decade of market economics now resembles a Third World country. Other London boroughs such as Newham, Tower Hamlets, Hackney and Ealing all have more cases per 100,000 inhabitants than Brazil, traditionally a TB blackspot because of severe poverty and poor sanitation.
Britain’s decline has assumed frightening proportions. After decades of neglect, the public infrastructure is crumbling before our very eyes. Housing, schools, hospitals, social services, roads, trains, tubes, buses, are clearly in a shocking state and, according to the perception of the overwhelming majority, are getting worse, not better. Expenditure on health in Blair’s first term was only one third of US levels, and one half that of France. Incredibly, The Observer newspaper pointed out that investment in the public sector under New Labour was actually lower than in the Thatcher years:
Investment in hospitals, schools and transport infrastructure sunk to the lowest sustained level since the Second World War during Labour’s four years in power… Overall real investment declined by 4.4 per cent a year, a larger decline than was registered during Margaret Thatcher’s premiership.[1]
State expenditure in 1975 was nearly 60 per cent of GNP. Today the figure stands at around 40 per cent. While Blair has announced billions of pounds extra for the NHS, little seems to have changed on the ground. Hospital Trusts up and down the country are already overspent and have announced cuts in beds, services and jobs. In Scotland for example, reports show that PFI hospitals are facing a massive £31m debt.
Professor Allyson Pollock of University College London said: “PFI is a very expensive way of raising money for new hospitals.” She said the trusts have to pay the companies running the hospitals at least £31.5m a year, which includes profits for shareholders. This burden will mean freezing vacancies, abandoning life-saving treatments and cutting vital services. “The health board has already reduced all acute in-patient beds across Lothian by around 24 per cent in the new hospital to try to make it affordable. However, it appears that further cuts are now required”, she said.[2]
The German Stern magazine described Britain as “The English Patient.” It pointed to the appalling conditions in Stepney Green in east London – one of the “most wretched and run down parts of England” – where terrible social deprivation exists in what used to be called “the soft South”. It explained that tuberculosis was rampant in the borough, where children are undernourished and sometimes up to ten people live in one room. Referring to a 1999 survey, it pointed out that “one in five adults in the land of Shakespeare and Harry Potter is practically illiterate and barely able to add up the small change in his pocket.”
Despite Blair’s promises about education, there was no real improvement. Even by September 2003, studies showed how little had changed in six years of New Labour government. According to a report from the Organisation for Economic Co-operation and Development, Britain’s education standards lag woefully behind its international competitors. Comparing the achievements of school leavers, in little more than a generation, Britain has fallen from 12th place to nearly, behind countries like Slovakia and Greece.
Under the Tories and now New Labour, the poor were getting poorer, but the rich in Britain were enjoying a bonanza. In the Sunday Times Rich List for 1997, the fortunes of the rich were increasing at an astonishing rate.
“For Joseph Lewis, the Bahamas-based billionaire who tops the Sunday Times list of Britain’s rich, 1996 was a vintage year for wealth creation. With profits from his outstanding skill at playing the foreign exchange markets, we estimate that Lewis trebled his fortune to £3 billion and it is still rising:
“Lewis is not alone. Last year was equally good for the other super-rich members of the Sunday Times list. The top 500 added a collective £16.299 billion to their combined wealth of £86.877 billion.” Three years later, they were still singing the same tune. “Britain’s super-rich have never had it so good”, states The Sunday Times. “The collective wealth of the top 1,000 in this year’s Sunday Times Rich List has reached almost £146 billion, a rise of more than £31 billion on last year’s list, or 27 per cent. This is the highest surge in the 12 years that we have been compiling the list.”[3]