New Labour Leaders Want to Go Back to Blair’s Policies that Blew Up the UK

By William K. Black
Quito: May 13, 2015

Given the media effort and the push by the Red Tories to lionize former UK Prime Minister Tony Blair I thought it was a good idea to explain just how destructive his war on financial regulation, supervision, enforcement, and prosecutions was. Blair most famously made public his war on regulation and his embrace of “winning” the regulatory race to the bottom in his May 26, 2005 speech on “Risk and the State.” In a classic example of “be careful what you ask for; for you may receive it,” he called on his Nation to embrace greater risk. He claimed that the public’s excessive aversion to risk produced a regulatory nightmare: “The result is a plethora of rules, guidelines, responses to ‘scandals’ of one nature or another that ends up having utterly perverse consequences.” Blair endorsed the Chicago School (and Tory) analysis of the folly of regulation – claiming that it characteristically produces “utterly perverse consequences.”

Blair then admitted at the beginning of his speech that the existing regulatory system had produced exceptional benefits for the public rather than “utterly perverse consequences.” He admitted that absent regulation the harm to the public would have been extreme.

Workplace fatalities have fallen by around two-thirds since the 1970s. Higher environmental standards have helped deliver cleaner air and water. Since 1990 sulphur dioxide emissions have fallen by 75% and water pollution fell by 65% in the 5 years to 2001.

Sulfur dioxide is a great killer of most forms of life. Absent environmental regulation, Blair is implicitly admitting, the UK would have been a terrible place to live by the time Blair was first elected.

Blair even admitted that industry often makes baseless attacks on regulations.

And not every new regulation has the detrimental consequences that are claimed for it. The National Minimum Wage did not lead to millions of job losses, as some had predicted but helped over 1 million low paid workers.

And that was the last kind word Blair uttered about regulation and regulators (as opposed to the anti-regulators he had largely appointed) in his speech. In the remainder of his speech he launched an unholy war on effective regulation and regulators, enforcement, and prosecutions of elite white-collar criminals – and workplace safety! The context of Blair’s assault on accountability for these elite criminals include his admission that “Britain compares favourably with its competitors on regulation. As the OECD and the IMF have recently said, the UK is very lightly regulated by international standards.”

So, if regulation had proven critically effective in the UK, and was “very light” “by international standards,” where was regulation in the UK so terribly severe that it would harm the UK’s ability to win the regulatory race to the bottom with its “competitors” a race that Blair indicated the UK was “winning” overall?   Blair answered that question at this early juncture in his speech.

But something is seriously awry when … the Financial Services Authority that was established to provide clear guidelines and rules for the financial services sector and to protect the consumer against the fraudulent, is seen as hugely inhibiting of efficient business by perfectly respectable companies that have never defrauded anyone….”

Yes, that is how delusional Blair pretended to be in 2005 about financial regulation in the UK – and how deeply he was in the pocket of the City of London’s corrupt senior bankers. The FSA was toothless, clawless, and emasculated in 2005 – because of Blair’s policies and appointments – and everyone in the City and Blair’s government knew it. The idea that it was “hugely inhibiting efficient business” was hilarious. The City’s biggest banks were, as Blair spoke, in the midst of a decade-long orgy of fraud. The leaders of “control frauds” take advantage of the seeming legitimacy of the “perfectly respectable” firm to conduct their frauds. The City did not have a single giant bank that, in reality, even approached “respectable” and each of the giant banks had employed thousands of officers and employees who had “defrauded” hundreds of millions of people (think Libor and foreign exchange).

Blair followed that series of whoppers with another that he also knew to be untrue.

Bodies set up to guard the public interest have one-way pressures. It is in their interest never to be accused of having missed a problem. So, it is a one-sided bet. They will always err on the side of caution.

Blair knew from decades of personal experience what a lie this is. Regulators “set up to guard the public interest” always have enormous pressure in the opposite direction from what Blair claimed all pressure came. The pressure from the industry and politicians on (real) regulators to fail to guard the public interest is unremitting. Indeed, Blair’s speech – prompted by industry complaints against the FSA, which was notorious for failing to protect the public interest and failing to take even the most rudimentary “caution” against elite bank frauds and abuses – was explicitly designed to pressure the FSA to become a complete whore of the City’s elite bankers. Blair’s speech put the lie to the central premise of his speech.

Note to Blair: it would be a truly excellent thing for the world if financial regulators were to “always err on the side of caution” and to have only “one-way pressures” “to guard the public interest” rather than to aid and abet the City banksters’ “reign of error” and fraud. The fact that Blair felt that (mythical) UK financial regulators devoted “to guard[ing] the public interest” were a disaster tells you all you need to know about how deeply he was in the banksters’ pocket even before they made him “filthy rich” (in the immortal words of Blair’s Red Tory strategist, Peter Mandelson). The City and Kazakhstan’s kleptocrats made Blair and Mandelson “filthy rich,” but as Mandelson emphasized, New Labour’s leaders were “intensely relaxed” about how people became “filthy rich.” The scandals that were making the City’s banksters “filthy rich,” never excited Blair, Brown, and Mandelson.

As Blair spoke, the City’s banksters were becoming ever filthier and richer by ripping off the UK’s middle class, its entrepreneurs, its laborers’ pensions, and by helping their fellow plutocrats, the “filthiest rich” in the UK, evade and avoid paying taxes.

Outside the UK, however, the City banksters really came in to their element and got filthy rich by illegally helping to fund the kleptocrats of the world, the most violent drug lords, regimes engaged in genocide, and the most bellicose nations in the world in their efforts to develop weapons of mass destruction. It is a testament to how blind, or disingenuous Blair was in his speech that he complained: “We allow the conspiracy theorists to dictate the [regulatory] argument without a basis in fact.” The reality was that the City’s banksters were – as he spoke – actively conspiring with each other and their “filthy rich” criminal clients to commit over a million felonies, and to cover those felonies up. The paramount strategic plan of City’s massive domestic banking operations was ripping off their UK customers.

Blair then came back to financial regulation and cited the neo-liberal, Tory, and virulently anti-regulatory Economist as his sole source for this Chicago school rage against financial regulation.

And in case we think we alone are subject to this [plague of regulation], countless examples can be found even in the most ‘open market’ economies. The response of the US Congress to the Enron and Worldcom scandals shows what governments can do wrong. In 2002 the Sarbanes-Oxley Act was, in the words of The Economist, ‘designed in a panic and rushed through in a blinding fervour of moral indignation.’

This is a passage George Stigler would have loved to have authored. Of course, it is a bizarre take on reality. First, the Enron and Worldcom “accounting control frauds” are, logically, prime examples of “what [fraudulent CEOs] can do wrong” rather than examples of “what governments can do wrong.” Second, “moral indignation” at elite frauds is a highly desirable reaction – as opposed to the Red Tories’ “intensely relaxed” response to it. Blair, however, openly channels the Tory apologists for the elite frauds at the Economist and sneers at anyone who thinks fraud by elites is immoral and needs to be condemned by society.

Third, the “panic” element of Sarbanes-Oxley’s passage came from the industry – not “the government.” The “panic” element is critical because it foreshadowed the most recent crisis. At peak, the U.S. stock markets lost over $7 trillion in market capitalization – largely as a result of the wave of elite frauds such as Enron. These frauds involved the firm’s senior officials using deception to get investors and creditors to trust them, and then betraying that trust in order that the senior officers may become “filthy rich” through the “sure thing” (Akerlof & Romer, 1993) of accounting control fraud at the investors and creditors’ expense. These elite frauds represent the strongest acid for eroding trust. Trust is highly desirable in many contexts, but when it becomes clear that trust is allowing one to defrauded by elite fraudsters like Enron and Worldcom’s controlling officers the sudden loss of trust can cause financial markets to collapse or suffer sudden, severe losses. When markets fail or drop precipitously they can cause, within hours, lethal liquidity problems for firms that make markets and rely on counterparties.

Yes, market participants saw private markets falling into a state of panic after WorldCom’s frauds were exposed and demanded that the U.S. government act promptly to restore trust before the market panic caused a severe financial crisis. As we saw with Lehman’s failure, when a government follows Blair’s sneering advice and ignores a financial market panic it causes catastrophic damage. So, Blair and the Economist were dead wrong and the Congress was exactly right to enact Sarbanes-Oxley.

Fourth, the Sarbanes-Oxley Act did not err by refusing to address only one problem (the consultant/auditor conflict) to the exclusion of other severe problems revealed by Enron and Worldcom’s (and many others’) frauds. The only provision of Sarbanes-Oxley that Blair specifically criticized as supposedly being stupid is very simple and sensible – it requires firms to test their internal controls to see that they function well. It is true that corporate CEOs – not the government – largely chose to implement that provision is a foolish, costly fashion, but that is not the government’s fault. In the current crisis, the major banks’ failure to maintain effective internal controls was revealed to have led to millions of felonies.

Sarbanes-Oxley also has an eminently sensible requirements that senior firm officers be personally accountable for the firm’s financial statement and that the audit committee members have the expertise necessary to fulfill their functions. Under Blair’s “logic” it was terrible that these provisions were enacted.

But Sarbanes-Oxley also teaches us two vital lessons – both of which Blair got wrong. A rule of law only works if it is enforced against violators, no matter how elite they are. A rule of law will only be enforced in the financial context if the regulators, enforcers, and prosecutors are dedicated to “guard[ing] the public interest” – the concept that Blair disparaged. That means that the regulatory and prosecutor leaders must be dedicated to vigorous enforcement of the rule of law – and that is exactly the type of leader that Blair made clear in his speech that he despised. President Bush shared Blair’s animus against effective financial regulation and appointed anti-regulatory leaders and (non) prosecutors who created a self-fulfilling prophecy of regulatory and prosecutorial failure. The result was, in the U.S., the three most destructive epidemics of financial fraud in history and, in the UK, even more endemic fraud and the systematic pillaging of customers.

In this same speech, Blair repeatedly expressed his hostility to the already pathetically weak enforcement of regulations in the UK. I will return to that subject as I track through his speech.

Immediately after his sneering critique of Sarbanes-Oxley, Blair endorsed the key dynamic that destroyed effective regulation in the U.S. and the EU – the regulatory “race to the bottom.” Blair emphasized repeatedly the need for the UK to “win” this “competitive” race to the bottom. But he also tied winning this competition to the willingness of UK citizens to “accept the risks” that the citizens of India and China were “prepared to accept.”

Business is more globally competitive than it has ever been. With these new opportunities come new risks, new dilemmas. A natural but wrong response is to retreat in the face of this change. To regulate to eliminate risk. To restrict rather than enable. But we pay a price if we react like this. We lose out in business to India and China, who are prepared to accept the risks.

That is an extraordinary statement for a “Labour” leader. Blair was urging UK workers and consumers to “accept the risks” that poor workers and consumers in very poor nations “are prepared to accept” when they work in unsafe factories and buy products such as counterfeit medicines. And why was the head of the “Labour” party urging UK workers and consumers to take these risks – in order to ensure that UK “business” did not “lose out … to India and China.” Blair did not explore the concept of why an impoverished worker in Bangladesh should be interpreted as “prepared to accept the risks” of working in a clothing factory that was a death trap. The Bangladeshi workers in that murderous factor did not know the risks they were taking because the CEO lied to them. The consumers in Nepal who purchased homes did not know that the builders, in order to increase their profits, had bribed the building inspectors to evade the requirements of the seismic codes. This turned the home they were purchasing into a death trap for their entire family, but the buyer does not know the risk he and his family are taking.

The workers and consumers in India and China that Blair was referring to were poor, often desperately poor. They had few choices to try to provide for their families. The whole concept that they are “prepared to accept the risks” of working in unsafe factories or buying contaminated food is dishonest, as Blair knew full well by 2005 from his global travels. Blair’s “Road to Bangladesh” strategy for UK workers would have been monstrous coming from any politician, but there is a special nastiness coming from someone who was the “Labour” party leader. Notice that Blair wasn’t asking UK CEOs to take greater risks to their health and safety – only workers were supposed to take those risks.

But the single most bizarre part of Blair’s attack on UK workers’ safety is his description of rules protecting workers’ safety. He claims that adopting rules that increase the safety of UK workers would represent a “retreat.” He condemns rules that would “restrict” unsafe working conditions and calls on UK workers to embrace a new system “enabling” unsafe factories to operate in the UK so that UK corporate CEOs can “win” their “competition” with their Indian and Chinese counterparts. I remind the reader at this point that Blair led the UK political party named “Labour.” Well, only Nixon could go to China and only Blair could prevent a UK “retreat” on workplace safety – by which he meant an “advance” on workplace safety.

Blair’s speech then veered into saying that he would push for three approaches that became hallmarks of the UK banking fraud crises. First, he called for not having any presumption that problems, even scandals, needed to be fixed. Note that he isn’t simply saying that the UK should not act proactively to avoid banking scandals. He was stating that even though bank scandals were raging as he spoke in the City there should be no presumption that the government should intervene and stop them.

Instead of the ‘something must be done’ cry that goes up every time there is a problem or a ‘scandal’, we make it clear we will reflect first and regulate only after reflection.

Societies that demand that “something must be done” in response to a scandal are healthier nations. There are a huge number of nations in which scandals are the daily norm because no one believes that anything can be done – that the elite criminals have always acted scandalously with impunity and will always do so. Blair identified one of the best traits in the UK – and set out to destroy it!

Adopting a regulation through a “notice and comment” procedure is a lengthy process that inherently takes many months and mandates significant reflection because the agency must respond to the merits of the specific critiques received from the industry and the public. In the decade-long build up to the City’s banking fraud crisis under Blair and Brown there were repeated scandals and instead of deciding that “something must be done” to prevent the scandals Blair and Brown’s governments ensured that nothing effective was done. After “reflection” about the surging fraud epidemics they invariably decided that there was no need for the government to adopt and enforce effective regulations to stop the City’s spreading culture of corruption. Blair and Brown’s “‘nothing must be done’ cry” proved catastrophic.

Second, despite the UK’s already pathetic financial regulation, Blair said it was essential to “roll back the tide of regulation.” The reality in the U.S. and the EU was a Bay of Fundy-magnitude tide of the three “de’s” (deregulation, desupervision, and de facto decriminalization) under the gravitational pull of the financial regulatory race to the bottom. Blair trumpeted, in his best Orwellian style that “Better regulation will be a central theme of the UK Presidency of the EU later this year.” “Better regulation” was Blair’s Orwellian euphemism for the worst of the three “de’s” that was making the City ever more criminogenic.

Blair’s description of the European Commission’s embrace of “better regulation” contains a subtle falsehood.

The Commission has produced an action plan on better regulation which includes commitments to impact assessments for all new measures in 2005. These assessments enable us to have a proper debate about the costs and benefits of proposed measures.

As Blair knew, and intended, the three “de’s” required no “assessments” and were inflicted on the people of the EU with no “proper debate about the costs and benefits of proposed measures” where those measures deregulated, desupervised, or effectively decriminalized elite frauds. Blair and the EU Commission did not really believe in “reflection” before taking action or requiring benefit-cost studies before making regulatory changes. That was because they knew that the three “de’s” were always desirable, because the banksters told them so. From the perspective of Blair’s battalions of banksters’ (who “never defrauded anyone”), the three “de’s” were always manna from Whitehall and 10 Downing.

Third, Blair wanted the victims of a wide range of misconduct to stop suing the perpetrators to seek compensation for their injuries. After all, if you were injured by someone’s negligence or fraud it was critical to understand that it was your fault – you should have exercised “common sense” and avoided being injured or defrauded. Blair’s euphemism for New Labour’s embrace of caveat emptor (and tortious victims beware) was that it is was essential to “replace the compensation culture with a common sense culture.” Blair and Brown’s embrace of the three “de’s” and the financial cesspool that the City was becoming, ironically, created the greatest need for a “compensation culture” in history. At this juncture, the City’s banks have paid or expect to pay over £20 billion in “compensation” to their customers for PPI (and roughly £3 for selling grotesquely inappropriate swaps to small entrepreneurs). Civil liability for misconduct, particularly fraud, is one of the ways of reducing misconduct and fraud. By allowing the banksters to defraud their customers with impunity Blair and Brown not only caused immense harm, they created the need for the largest “compensation” system in UK history due to the astonishing scale of the banksters’ frauds against their own customers. Such are the “utterly perverse consequences” of Blair and Brown’s deregulation, desupervision, and de facto decriminalization of financial fraud by the City’s elite banksters.

Blair then went back to his Orwellian abuse of the English language to hide his abuse of the citizens of the UK.

[R]isk is the governing concept in all the changes we will introduce to reduce regulatory burdens on business.

Risk can be a perfectly sensible subject for regulation, and Blair’s phrase “risk-based regulation” sounds innocuous, but the phrase was crafted to deceive. In practice, it meant that anti-regulators would declare an activity such as financial derivatives “low risk.” That meant that they would not have to even pretend to regulate the activity. In the same speech, Blair promised to put in place the equally Orwellian “risk-based enforcement” in which regulators were encouraged not to take enforcement actions against elite frauds on the supposed grounds that the frauds posed relatively low “risk.”

In July 2005 we will begin consultation on the Better Regulation Bill which will contain statutory requirements for regulators to use a rigorous risk-based approach and powers to reform penalties acccording to risk-based principles.

I particularly like Blair’s use of the word “rigorous.” The only aspects of regulation that he wanted to be “rigorous” were the Orwellian proposals to deregulate, desupervise, and implement the de facto decriminalization of crimes by elite corporate officials. Also to “reform penalties” in Blair-blather meant allowing banksters to grow “filthy rich” through massive felonies with impunity. George Orwell (Eric Arthur Blair) died too soon. Tony Blair would have inspired Eric Blair to new heights.

Blair and Brown mimicked President Bill Clinton and Vice President Al Gore’s disastrous “reinventing government” initiative. Like Clinton and Gore, Blair and Bush saw the inspector generals as the villains for they kept reporting that the anti-regulatory leaders were refusing to enforce the rule of law. Blair and Brown’s solution was to greatly reduce the inspectorates, appoint new inspectors who would ignore violations, and order not only “light touch” regulation but also “light touch” inspections of the regulators’ failures to regulate.

We are also acting to ensure that public sector entrepreneurs are not discouraged by unnecessary interference. Inspection has been an important part of the way we have improved standards in public services but inspection needs to evolve to reflect that success. Crucially, modern inspection, as David Bell of OFSTED has been arguing, needs to be proportionate to the risks faced. We announced in the Budget that we will create four new inspectorates to replace the current eleven. The new inspectorates will be actively charged with ensuring those doing well get a light touch approach….

Of course, the agencies that failed most completely to regulate were defined by Blair and Brown as “doing well” because they did not generate many complaints from the industry’s most criminal elements. Because the non-regulators were “doing well” the inspectorates were ordered to use a “light touch approach” to inspecting that ensured that they would not learn that the anti-regulators were actually performing abysmally.

The UK Parliamentary inquiry commission reported on a related and analogous disaster caused by “light touch” approaches.

The corporate governance of large banks was characterised by the creation of Potemkin villages to give the appearance of effective control and oversight, without the reality.

The anti-regulators did not discover that corporate governance at the large banks was a “creation of Potemkin villages” designed to deceive the financial regulators because in a “light tough” approach one simply looks at the Potemkin façade as one walks by at a distance. Similarly, the regulatory agencies were suffused with Orwellian claims about the state of the art nature of their regulation, but that was simply another series of Potemkin villages. Behind the façade of Orwellian verbiage there was no meaningful regulation, supervision, enforcement, and zero prosecutions. A traditional inspectorate would have made the competent inquiries that would have exposed the death of effective regulation. But the new, “modern” inspectorates’ orders to follow a “light touch” approach to inspections simply walked by the anti-regulators’ Potemkin façade at a distance and said – I don’t see anything wrong on the surface. A “light touch” inspection is, of course, not an inspection. It is a (designed) farce crafted to deceive.

Blair and Bill Clinton share a “tell.” Whenever they were doing their worst they tried to sell their policies as “modern.” Blair refers to “modern inspection,” by which he means Potemkin inspections. Clinton destroy the Glass-Steagall Act’s immensely successful regulatory safeguards through the “Financial Services Modernization Act of 1999” and squashed Brooksley Born’s efforts to protect us from frauds involving financial derivatives through the “Commodity Futures Modernization Act of 2000.” Blair and Clinton deliberately belittled effective financial regulation as archaic because it had worked so well for decades.

Blair saved his biggest apology for doing nothing to stop elite financial fraudsters for near the end of his speech.

Not every ‘scandal’ requires a regulatory response. Bad people will find a way round the law no matter how good the law is.

Well, gosh, I guess we do not need a rule of law because criminals violate laws. A millennium of English law and no one ever figured this out before Blair’s brilliant insight. The rule of law is oft described as the glory of England, mind you, and a critical reason for its economic development. But I guess a “modern” approach recognizes that “we don’t need no stinkin’ badges” because “we don’t need no stinkin’ laws.” Of course, Blair does not attempt to explain why his claim that “bad people will find a way around the law” should lead us to abandon the rule of law. I will leave to the reader how many things are wrong about Blair’s sentence about “bad people,” particularly his implication that the statement means that there is no point in prohibiting even crimes by the elites that reach “scandal[ous]” proportions. I do note that the implication of Blair’s statement is that business elites should be able to commit even scandalous crimes with impunity.

Blair closed his speech not with a bang, but a whimper.

A risk-averse scientific community is no scientific community at all. A risk-averse business culture is no business culture at all. A risk-averse public sector will stifle creativity and deny to many the opportunities to be creative while supplying a few with compensation payments.

Good scientists are risk-averse when it comes to creating risks for the public. Bad scientists are cavalier about risk to the public – and have caused grave harms, e.g., by deliberately or negligently introducing invasive species. Bad scientists also tend to ensure that the risk falls on others – not them, such as the psychologists that were the architects of the U.S. torture program that Blair supported and aided.

Business cultures are exceptionally risk averse. Adam Smith emphasized this point, explaining that because competition is such a harsh disciplinarian people of business constantly conspire against the public to form cartels. The “Gresham’s” dynamic (bad ethics drives good ethics from the markets and professions) is the great threat to honest business leaders when business cheaters prosper through fraud. “Accounting control fraud’s” greatest attraction is that it is a “sure thing” guaranteed to make the CEO leading the fraud wealthy. (He, of course, may toss it away.) Only vigorous regulators who promptly prevent fraudulent conduct by their dishonest rivals can protect the honest business leaders from their dishonest rivals.

Blair does not understand the specialized meaning of the economic term of art: “risk averse.” Being risk averse in the sense used by economists is a normal, indeed, close to universal human trait because it has such high evolutionary value. Being risk averse does not mean that one does not take very substantial business and investment risks. Neo-classical economists, in fact, (inaccurately) ascribe financial crises to CEOs losing their risk aversion due to “moral hazard.” In the context of a failing firm this is called “gambling for resurrection.”

A prudent public sector official is risk averse. Note that Blair again misses a key point about risk aversion. He wants a public sector in which the officials are not averse to greatly increasing the risk to others. Recall his claim that UK workers needed to compete with poor Indian and Chinese workers by accepting much more dangerous factory conditions that might maim or even kill them. UK workers can only do that if UK government officials are willing to greatly reduce the safety protections in UK workplace rules. The UK government officials and their children will never work in those factories, particularly after they degrade their safety standards. It is the Labourer that Blair was consigning to those unsafe conditions – and then telling them that he would make it far harder of them to get compensation if they were maimed in those factories that were degraded to Chinese and Indian safety levels.   Recall that Blair said his goal was to help the officers controlling UK businesses win their competition with their Indian and Chinese counterparts. “New Labour” was an oxymoron operating as (not-so) Red Tories. Blair’s speech proposed to “represent the interests of labourers” by degrading their safety, health, and incomes in order to increase the wealth of the senior officers of massive corporations.

To Americans this seems a bit odd. It is most akin to President Obama pushing the odious Trans-Pacific Partnership (TPP) with a passion that we have not seen during his entire term of office and insulting the Democratic wing of the Democratic Party while allying with the worst elements of the Republican Party’s congressional leadership.

But from the UK perspective, Blair’s magic word that remains code for the “win-the-lottery” theory of living your life. Blair said New Labour was “aspirational” – it wanted to attract the votes of those who fantasized that they might someday be that CEO made “filthy rich” by the fraud epidemics that Blair’s unholy war on effective regulation produced. This “aspiration” to be “filthy rich” – and to be able to evade paying taxes – is the one-word code that describes Blair’s concept of New Labour’s strategy for attracting the votes of a broader electorate.

The UK media, which is dominated by ultra-right oligarchs, is ridiculing New Labour’s leadership for not emphatically embracing Blair’s “aspirational” strategy that led to the policies that caused catastrophic damage to the nation and the New Labour party. They want the UK electorate to have a choice limited to deciding between two Tory parties (one, confusingly, called “Labour”) that embraced the same general theory that they existed to cater to the demands of the City’s elites’ demands. This has been the situation in the UK for a generation. Indeed, conservative UK media commentators are explicit that the true reason they despise the Scots’ party (the SNP) is their fear that it could have led Labour to offer economic policies that differed dramatically from Tory policies.

Blair ended on a note that would cause any independent industrial safety engineer to jump out of his or her seat and scream “No!”

We cannot respond to every accident by trying to guarantee ever more tiny margins of safety. We cannot eliminate risk. We have to live with it, manage it. Sometimes we have to accept: no-one is to blame.

Again, for someone running as the leader of a party named “Labour” this is appalling. In the workplace context we should in fact study and record every material injury. “Blame” is often not the issue. What we want to do is find out what aspects of the workplace and workers interact to produce repetitive injuries (or even single, severe injuries). Indeed, we do not simply study existing injuries, we look at the worksite and at worker actions that create significant hazards that could lead to injuries. Then we figure out how to cost-effectively reduce those hazards and prevent injuries.

Firms that take Blair’s cavalier attitude toward workplace injuries (“live with it” – a particularly callous phrase in the case of fatal or crippling injuries) have far higher rates of injuries than firms that believe serious injuries should not occur in the workplace. Firms that believe that serious workplace injuries should not occur take injuries seriously, study what produces them, and act to minimize serious injuries before they ever occur. OSHA’s white paper on the subject explains the results.

An injury and illness prevention program is a proactive process to help employers find and fix workplace hazards before workers are hurt. We know these programs can be effective at reducing injuries, illnesses, and fatalities. Many workplaces have already adopted such approaches, for example as part of OSHA’s cooperative programs. Not only do these employers experience dramatic decreases in workplace injuries, but they often report a transformed workplace culture that can lead to higher productivity and quality, reduced turnover, reduced costs, and greater employee satisfaction.

Blair assumes that regulators or even responsible business owners who participate in OSHA’s voluntary workplace safety programs in order to remove hazards before they lead to injuries, harm businesses. In the workplace injury context, vigorous regulators (who sometimes act through voluntary programs) greatly aid businesses, producing not only “dramatic deceases in workplace injuries” but also a far more productive workplace. If Blair had bothered to learn anything about labourers and workplaces he would have known that what he was saying was callous, murderous idiocy. But being the head of New Labour meant that Blair did not have to develop any interest in such subjects or even empathy for those who were unnecessarily maimed and killed because of his callousness and ignorance. His advice to those who were maimed and the surviving loved ones of those who were killed – “live with it” (and don’t sue for the income lost when Mom or Dad was killed or disabled by a workplace injury) – shows us why no one has ever considered Blair a Mensch despite his charitable projects.

In my next column I discuss the pained and puzzled letter from the FSA head in response to Blair’s rant against the FSA as a (fictional) tough regulator. The letter documents the UK’s determination under Blair and Brown to “win” the regulatory race to the bottom with the U.S. – and the depths to which FSA’s Potemkin regulation collapsed under Blair.

One Response to New Labour Leaders Want to Go Back to Blair’s Policies that Blew Up the UK

  1. It would be interesting to find out which countries have better regulatory environments and what their strengths and weaknesses are. Do you have a recommendation for a type of league table or consolidated reference for that? Knowing more details could help expand awareness among Americans about the options, particularly given the US penchant for either following the UK or acting in concert on so many matters.