Blair: don't defy me on PFI deals
Michael White and David Walker The Guardian
Tony Blair today warns increasingly vocal Labour critics of his sweeping changes to public services that they risk becoming "prisoners" of an outdated model of the welfare state created by the party's heroic generation after 1945.
In a full-blooded defence of the private finance initiative (PFI) strategy, made today in the Guardian on the eve of next week's turbulent Labour conference, the prime minister insists that the role of private finance in modernising the public sector must grow if voters are to get the schools, hospitals and public transport they expect.
Urging MPs, activists and unions to embrace change, he writes: "Where we have been reformers, we have left great legacies. But Labour's failure in the 1960s and 1970s to reform industrial relations and the conduct of strikes aided the return of the Tories and their destructive policies" - a renewed threat under Iain Duncan Smith's leadership, ministers believe.
Mr Blair's 10,000-word, personal essay of political philosophy comes in a Fabian Society pamphlet called The Courage of Our Convictions. It is intended to persuade wavering delegates that, apart from Iraq, the domestic reform agenda is his first priority.
Changes to how such services as the NHS work - to become more consumer-orientated and efficient - are as important as the extra billions which Gordon Brown's spending review is pouring into health and education, Mr Blair believes.
"We reject the pessimists and the Tories who believe increasing investment would only be pouring more money into a bottomless pit. Their option is privatised services for the better off and cheap 'safety net' public services for the poor," Mr Blair writes.
The prime minister's challenge came as his chief lieutenants in the cabinet, the chancellor and John Prescott, rejected trade union calls, to be debated at the Blackpool conference, for a moratorium on new PFI projects for 12 weeks while the national audit office conducts a rapid value-for-money review on private sector deals. Unions fear such deals will erode jobs and services.
Rejecting claims that PFI is the equivalent of Tory-style privatisation, the chancellor accused his critics of "ideological dogma" that would leave hospitals half-built and children at risk.
He told them: "There will be no moratorium, for 12 weeks or 12 months. The idea that you can have a moratorium is completely unacceptable."
At his side, Mr Prescott, the unions' best friend in cabinet, denounced "unjustified" attacks on PFI and the parallel public/private partnership (PPP) for the London Underground, using techniques which he said have been greatly improved since 1997.
"PPP and PFI are nothing to be scared of. They are just a different way of providing a public service. PPPs are an essential part of the story and they are here to stay," the deputy prime minister said at a hastily convened press conference during the Commonwealth finance ministers' meeting in London.
Unions reacted with anger. John Edmonds of the GMB, whose members are frontline public sector workers, asked: "What is Gordon Brown afraid of? If he genuinely believes that PFI is the way forward, why will he not allow a short independent review by the NAO?"
But the measure of Downing Street's concern about the damage which an adverse vote on PFI next week could do to public confidence - already highly critical, according to yesterday's Guardian/ICM poll - came in Mr Blair's renewed plea for trust and patience.
While promising security of working conditions and better pay - now rapidly rising, he notes - to public sector staff, Mr Blair adds: "We reject also the view, held by some on the left, that a Labour government's role is simply to defend existing services, not to extend choice or accountability but simply pour in more money."
Mr Brown and Mr Prescott, who published a dossier of PFI achievements in London, said that total public sector investment, long-neglected in Britain, had risen from £22bn under the Tories to £35.9bn this year and £46.6bn by 2005-6, including an eventual 100 PFI hospitals and 550 new or improved schools.
Old-fashioned public investment had been badly run, late in delivery and expensive, they insisted. "Our reforms ensure private contractors are now bound into long-term maintenance contracts and shoulder responsibility for the quality of work," Mr Brown said.
Mr Blair took a longer, sweeping view when he quoted "heroes and heroines" from Labour's pantheon - from Nye Bevan on the left to Tony Crosland on the right - to demand change.
"It is time to acknowledge the 1945 settlement was a product of its time and we must not be a prisoner of it.
"Labour created the NHS, the welfare state and expanded educational opportunity. These are our crown jewels and prize achievements, built by our political heroes and heroines. So it's understandable that to suggest they are no longer always good enough and must be radically reformed can touch raw nerves."