The Role Of An Active State Should Be At Heart Of The General Election

There is a week to go until a critical general election. The electorate faces some stark choices, not least in terms of policies for public services and the taxes to fund them.

Without rehearsing the Conservative and Labour Parties’ manifesto commitments, it is safe to say that Labour would follow a traditional (dare I say European) social democratic approach, with significantly increased spending on education, health and the police and the Conservatives would broadly continue their policies of the last seven years.

The major parties’ tax proposals are very different too, as are their attitudes to the role of the state (both central and local government) to public service provision, regulation and engagement in markets and much more.

This choice on 8 June is fundamentally between: the collective versus the individual; about the role of the state versus the role of markets; and above all, about the role of government and democratic accountability.

Let’s be clear about some truths.

The state and the public services, which it organises and funds on our collective behalf, ‘matter’. It educates, it employs and regulates the way others employ labour; it protects us from internal and external threats; it cares us for us when we are ill; and it does so much more.

Markets also would not work without an active state involvement and regulation. The fact is that business needs an active state.

And equally, civil society, charities and the voluntary and community sector require an active and supportive state.

In return, public services and the wider roles of the state must be subject to democratic control, and those responsible for making the decisions must be democratically accountable.

It is too easy to take the state and public services for granted in everyday situations and in moments of national crisis alike. Yet the reality is that the state and public services have changed much over the last few decades and could change even more radically after 8th June. So it is important that we understand the extent of these changes, their causes and their consequences.

In their new book ‘Dismembered – how the attack on the state harms us all’ – Guardian Books and Faber and Faber – Polly Toynbee and David Walker powerfully draw on a wide range of evidence, including some insightful interviews with public service staff, policy makers, expert commentators and public service users/citizens – to demonstrate how the state has been changed over the last decade.

I agree with their perspective and conclusions.

Whilst this book is not a critique of economic policy, it is a comprehensive analysis and commentary on what has been happening to our state and the wider public realm.

Polly and David chronicle how successive governments (especially but not exclusively since 2010) have been aiming for: a smaller state; reduced public expenditure; less regulation (or at least less of certain types of regulation); and fewer public services directly managed by the public sector. Reading ‘Dismembered’, the scale, depth and implications of cumulative government action and inaction strikes home.

Polly and David examine: the consequences of outsourcing public services, including NHS and local authority services; the removal of schools from local authority accountability to the shadows of multi-academy trusts; the privatisation of a number of industries, including Royal Mail and rail services; plus changes to social housing policy, the social security system and much more. They describe how public spaces and public assets such as museums, galleries, parks and open spaces and even the BBC have been the subject of the creeping role of markets, the introduction of the language and behaviours of the commercial sector, and changing ownership in respect of these public assets.

The book also describes how the role of the state in regulating business, especially financial services, has changed – and as we saw in 2008 from New Labour’s ‘light touch’ regulation, this was not always in the public interest. This deregulation led to a crisis requiring massive public sector intervention and huge public investment to save them from collapse, which in turn would have brought the entire economy down. We are still paying the price for that money used to save the banks.

‘Dismembered’ should be read by all, if for no other reason than to gain an understanding and better appreciation of all of the changes that have taken place.

Polly and David are strong when they make the case that public services are not the same as retail or banking services, and that we do not interact with them in the same way. When we use NHS services, send our children to school or interact with the police and criminal justice system as victim, criminal or concerned citizen, we are not customers as we are at the supermarket. Indeed, we are citizens and our involvement with these services is complex and on several dimensions. We are users, tax payers (and thus funders), citizens with a wider community interest and we may be employees. Many public services provide a direct service to their users but they also make a wider public interest contribution. To suggest otherwise trails the idea that they can all be ‘marketised’ without any detrimental impact – which is simply not true.

Schools educate learners; business and public services require educated people as employees; and society benefits from a well-educated population. Similar arguments apply to the NHS and other public services.

Public investment builds transport infrastructure, schools and hospitals and supports businesses, training and growth. An active government supports firms to export and locate in the UK, and seeks inward investment. Of course, an active state is much more than just public services but these are very important.

We tend to fund these services though taxation, with some charges for certain services adding additional revenue. The NHS and social security represent collective state organised insurance based on taxation. If we all had to take out private health insurance, we would pay more, face greater risks and there would be even greater division and inequality. And this could happen in respect of social care if we are not careful.

David and Polly make the social democratic case for progressive taxation and rightly challenge the popular notion that we enjoy ‘Scandinavian public services and US taxes’ at the same time. We can not and in any case, taxation should also be about redistribution, not simply raising revenues for government. And those revenues are always at risk because of tax avoidance and evasion, which in turn are not being properly addressed, in part because of severe cuts to HMRC and in part because of government political failure to act.

The authors demonstrate (I believe very convincingly) that public expenditure cuts are harming public services. The days when ‘efficiency savings’ could plug funding gaps have long gone. The NHS (due primarily to rising demand) is short of funding, and schools are experiencing cuts for the first time in decades, as are the police and other critical services. In summary, the costs of these cuts is damaging the long-term sustainability of our economy and society, and they are being made for ideological, not economic reasons.

To stop more planned cuts and to restore expenditure will require a very different government attitude to the role of the state, public services, public expenditure and taxation – and not just a few tweaks to policies.

It is clear that some people across the country are feeling ‘left out’ and marginalised – often the ones who most rely on decent public services, and the same ones who are experiencing the greatest cuts to these services and often to in-work benefits. An inclusive society has to be more equal and it has to be underpinned by a strong active state. Polly and David address the depressing reality of increasing poverty and inequality too in their book.

As one would expect from their previous writing, Polly and David are in favour of an active state that acts for the common good. They believe that the state can be a positive actor and that public services, the wider public realm and the right regulation and enforcement are good and can be in the public interest.
I started this review by saying that there is a stark choice in this general election. I believe that “Dismembered” reminds us of how far we have travelled in one direction but it can be a wake-up call before we hurtle further away from a supportive and active state.

I wish that every voter would read ‘Dismembered’ before they vote. This could make a big difference to the result! Indeed, had this analysis or something similar been widely available before previous elections, we might not have had to read it today!