Shirley Williams on the Growth of Bureaucracy under Thatcher

SWilliams Book Pic

The great boast of Margaret Thatcher and the Conservatives is that private enterprise, unfetter by state control, somehow magically reduces bureaucracy. Apart from ignoring the fact that firms also necessarily have their own bureaucracies, the economic and social importance of many of the industries taken into state control means that even after these industries were privatised, there still had to be a state bureaucracy to make sure these industries continued to act in a fair and responsible manner. So there are a plethora of regulatory bodies supervising telecommunications, electricity, water and the environment. And one effect of privatisation was to make these regulatory authorities and the state supervisory bureaucracy bigger than they were under state ownership. Private Eye in the 1990s during John Major’s administration ran story after story noting the massive increase in such bureaucracy in the electricity, water and environment agencies. The Eye also noted how Thatcher’s successors attempted to cut down this bureaucracy by increasingly depriving them of their statutory powers and limiting their remit. Bureaucracy was reduced not be being more efficient, but by being deliberately cut down to prevent it interfering. And thus was public protection against the predation and mismanagement by the newly privatised companies removed.

Shirley Williams, the former Labour MP, who became one of the founders of the SDP also noted the growth of bureaucracy under the Conservatives before Thatcher in her book, Politics Is For People. She wrote

Another paradox can be seen in Britain, and no doubt in many other countries as well: the growth of administration. In 1970, the then Conservative government brought in the American industrial consultant, McKinsey & Co., to advise them on the reorganisation of the National Health Service. the reorganisation, in which professional interests were extensively consulted, led to a substantial increase in the number of administrative and clerical posts, and a higher proportion of administrators and clerical employees to doctors and nurses, the front line of the service. Local government reorganisation, under the same Conservative government, had similar consequences: more highly paid administrative posts, no evidence of improvement in local government services. Big government has its own impetus which is hard to stop, whatever the philosophy of the executive in charge. But opposition to it rubs off most on political parties identified with a substantial role for it. (Pp. 29-30).

Labour has suffered because, as the party most identified with big government and state expenditure, it has also been criticised by its Right-wing opponents as the party of waste. Yet the Tories have vastly inflated the bureaucracy involved in the remaining areas left under state control. Private Eye noted that the creation of the internal market in the NHS, and the PFI financing of hospitals, vastly increased bureaucracy in the Health Service. Successive governments have carried on the marketization of the NHS, with a further increase in bureaucracy. Within the BBC, the Eye also noted that John Birt’s administrative reorganisation of that once-great and respected institution resulted in the expansion of the upper management grades on vastly bloated salaries coupled with a damaging reduction in the production staff, who actually made the programmes people watch.

Britain’s public services and industries have been made increasingly inefficient through the creation of a corrupt and parasitic class of managers, who seem to serve only to perpetuate themselves at the expense of their own companies and their workers. Indeed, Ha-Joon Chang in his book, 23 Things They Don’t Tell You About Capitalism in one of the very first chapters describes the cases of several companies that actually went to the wall because their managers cut investment and wages, and sold of the companies’ assets, in order to increase their share price and their own salaries.

The Conservatives are the party of parasitic, useless bureaucracy. And the management consultants they have called in to advise them on how to reform British state administration have done nothing but wreck it. Arthur Anderson, later Anderson Consulting, destroyed the Benefits Agency and the Inland Revenue in the 1980s and 1990s. Their successors in PriceWaterhouseCoopers and the rest of the accountancy firms sending their senior staff to help both Tories and Labour draft their policies on tax and so on are part of the same poisonous trend. The Tories should be thrown out of government, and the management consultants and accountancy firms firmly excluded from the business of government.

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2 Responses to “Shirley Williams on the Growth of Bureaucracy under Thatcher”

  1. Florence Says:

    One area of commerce that is seldom mentioned when discussing the revolving doors, law makers and Tory party donors are those in the retail industry. They are involved in many areas such as food safety and standards, employment law, monopolies, and farm pricing to name a few. The large retailers and their trade organisations take the lead in ensuring laws and regulations favour their industry, just as much as the accountancies and banks are embedded in the government functions.

    • beastrabban Says:

      Absolutely, and George Monbiot describes the sheer extent of some of this corruption in the chapter on the supermarkets in his book, ‘Captive State’.

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