Labour takes stock - with a fearful eye on the future
The government yesterday published its mid-term policy review. It gives an assessment of what has been achieved and the challenges ahead. Guardian writers look at the key areas
Friday November 24, 2006
The Guardian
Economic dynamism
Tony Blair and Gordon Brown believe the economic stability the government has presided over since 1997 is a necesssary but insufficient condition for the big challenge of the next decade - tackling the threat posed by the big emerging economies of China and India.
Over the past decade and a half, the size of the global labour force has doubled to three billion as a result of the collapse of communism in the Soviet Union, China's embrace of the market and the arrival of India as a global economic force.
With the fast-growing developing economies having far lower levels of wages than those in the UK, Labour says the only option is a "knowledge economy" which specialises in sectors such as pharmaceuticals, biotechnology, environmental protection, nanotechnology and financial services.
These are areas where the UK has a tradition of strength, where the profits margins are high, and where the competition from India and China has so far been less evident than in low-cost manufacturing.
Labour has identified two areas that need to be addressed. The first is ensuring that Britain can compete in the lucrative high-skill sectors, where there is some concern that the UK spends less on research and development than its main rivals; that Britain's level of skills compares badly to those in the United States, Germany and Japan; and that the flow of new scientists may be drying up.
Although the government says educational standards have been rising, there are 7 million adults who are unable to read and write. At the other end of the spectrum, the number of undergraduates reading the physical sciences, engineering and technology has been falling, while fewer children have been taking maths and science at A-level.
The government's second concern is to ensure that growth benefits all groups in Britain. Labour admits the very poorest have not shared the benefits of growth, while inequality is more pronounced than it was in 1997.
Larry Elliott
Environment and energy
Global growth has increased demand for energy and put extra pressure on the environment at a time when the UK's reserves of oil and gas are depleting.
Labour admits that on current trends, Britain will miss by a wide margin its 2010 target for cutting carbon emissions to 130m tonnes. But since the UK accounts for only about 2% of greenhouse gases the priority is a new international agreement on climate change that includes countries left out of the 1997 Kyoto agreement - the United States, India and China.
The government's analysis, on the basis of the scientific evidence available, is that climate change, if left unchecked, will pose a threat to water, production of food, health, land use and the environment. The Stern report, released earlier this month, warned that the world is already locked into a 1-2C rise in global temperatures by the end of the century.
The prime minister believes that it is possible to negotiate a climate change deal quickly because the US - which has been reluctant to act - is now, like many other developed countries, worried about its dependence on unstable parts of the world for energy supplies.
Tony Blair thinks energy security rather than the threat of climate change will bring the US to the negotiating table and that a framework agreement is possible by the time of next summer's G8 summit in Germany.
Labour is concerned that the depletion of North Sea fields will make the UK increasingly dependent on Russia for its gas; by 2020 the proportion of gas demand met domestically will fall from 90% to 10%. The prime minister and the chancellor are in favour of the replacement of Britain's ageing nuclear power stations, both as a way of cutting carbon emissions and of reducing the UK's energy dependency.
Larry Elliott
Public services
Significant demographic changes in the next decade will pose new challenges for public services. The issue of an ageing population is less acute in Britain than in many other countries, but there will be 2.4 million more over-65s in 2017 than in 2007, creating long-term pressures in health and social care. Without policy change, this shift alone will increase spending on pensions, health, long-term care and other needs.
Other developments include the relatively high proportion of people living alone and historically high levels of net immigration. The rate of population growth will almost double, from 2.4% between 1987 and 1997 to 4.6% between 2007 and 2017.
There have been continuing improvements in health - with declining hospital waiting times and increasing life expectancy - and education, where attainment at primary and secondary level has improved.
But the government believes it must now move closer to creating "self-improving" public services. This will require balancing local diversity with national standards, and direct provision with the commission of services from the private and voluntary sectors. It will also need to consider new types of central targets and accountability, new incentives for improvement and a greater emphasis on prevention.
Providers must improve customer care by looking at the way that businesses and other countries' services shape and meet expectations, seeking greater personalisation as well as high standards of universal provision.
The state must also consider how it can help produce culture change, for example in tackling dysfunctional but not illegal behaviour. Reforming the public services to boost economic competitiveness will also be crucial.
Tania Branigan
Security, crime and justice
The prime minister still regards the criminal justice system as one of the least efficient public services in Britain. Ministers have been told that it is uniquely the public service that most people have less respect for after their own personal experience of it.
Yet at 2.5% of GDP, UK spending on public order and safety is higher than among the rest of the Organisation of Economic Cooperation and Development group of the world's richest nations.
There is also a paradox. Fear of crime has apparently fallen by 36% since 1998. Yet at the same time 70% of people think crime is rising nationally and in their local area.
Ministers are also due to take an in-depth look at the possibilities of technology in combating crime, as well as the implications for liberty and privacy. This study will go beyond identity cards, the use of DNA banks and CCTV.
They will also look at whether innovations like the Liverpool community court, which specialises in dealing with low-level antisocial behaviour and is regarded as closer to the local area, can be extended nationwide.
Ministers have also been told that the UK death rate from drugs is relatively high and rising. At the same time more than 14% of convicts have committed a drug-related crime.
Ministers are being asked to see if the principles of public sector reform can be applied to the criminal justice system by identifying who are the courts' "customers". They are also being asked to investigate whether a new framework on crime prevention is needed to make it easier for policy makers to distinguish between general initiatives that may have a preventive impact - such as Sure Start or employment programmes - and more targeted interventions that focus on identified potential offenders.
The government now has a raft of indicators that predict someone's likelihood to commit crime.
Patrick Wintour
Role of the state
Downing Street says Britain has made substantial social progress since the government came to power, and cites many examples. Relative child poverty has fallen by 800,000 since 1997 and relative pensioner poverty by one million.
Anti-discrimination legislation, such as the civil partnership act, has given basic rights to minorities. Disadvantaged groups are more likely to be in work; the employment rate of disabled people has risen from below 40% in 1998 to 45% today, while more women have returned to work thanks to the increased availability of childcare. The gender pay gap has steadily narrowed.
But No 10 also concedes there are problems. While growth has disproportionately benefited the poor, the very worst off have not shared in recent growth. The UK remains amongst the most unequal societies in the European Union.
Pupil achievement at GCSE is still strongly related to family background and the poorest sometimes get less access to public services than the best off. Britain continues to have high rates of teenage pregnancy.
As the government seeks to tackle these enduring problems, it believes it needs to examine how the state can become more enabling, pushing powers out and down. Action from the centre has been necessary to achieve progress, but there may be a point at which central targets become counter-productive. Divisions between the voluntary, independent and public sector are also beginning to come down.
The charity sector is burgeoning; half of the people in England and Wales now do voluntary work at least once a month.
At the same time, emerging social problems may involve the government in new issues. There may be a shift to a focus on prevention as public health and lifestyle matters rise up the agenda; alcohol-related deaths and obesity rates are increasing rapidly. Most of the population is now overweight, and 50% more children are overweight than in 1996.
Tania Branigan
Britain and the world
Public concern about defence and terrorism has risen steeply since Labour came to power and the government has identified a range of global challenges faced by the UK. They include extremist terrorism in Iraq and Afghanistan; climate change; the risk of nuclear proliferation; the rise of protectionism; and poverty and conflict in Africa.
These issues will require a global response from the UK and its allies, working within reformed, effective multilateral organisations. In many ways the choices for society are no longer between left and right, but between being open and closed; between isolation and engagement; or between protectionism and free trade. The UK has led the way on a series of issues, such as responding to the threat from international terrorism after 9/11 and pushing for the negotiated settlement of conflicts such as that between Israel and Palestine.
The prime minister believes there is an understanding across Europe and the Middle East that resolving that conflict is key to reducing the threat from Islamist terrorists.
The review is unlikely to see any rebalancing of Britain's position as a bridge between the US and Europe. But Mr Blair wants more European politicians to consider whether they are willing to let their armies fight to keep the peace.
Britain has promoted human rights and democracy, pushing for a ban on anti-personnel mines and intervening in Bosnia, Kosovo, East Timor and Sierra Leone. It has also doubled overseas aid and cancelled over $70bn (£36.5bn) of debt in developing countries. But while poverty is falling worldwide, progress is uneven. Poverty and conflict are intimately related; poor countries are more likely to experience war.
The UK has led the drive for reform and enlargement in Europe. Britain's focus on preparing for the challenges posed by globalisation is now at the centre of EU policy.
Tania Branigan
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