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Bloomberg: Six Reasons to Celebrate Tony Blair’s Departure: Matthew Lynn

EXTRACT: Blair has failed to defend British companies. Look at the way that British businessmen can now routinely be extradited to the U.S. without the right to a hearing in their own country.  Likewise, he has failed to stand up for Royal Dutch Shell Plc and BP Plc in their contests with Russian President Vladimir Putin. Those are two of the U.K.’s most important companies. A French or U.S. president would battle hard for national champions. Blair couldn’t be bothered.

THE ARTICLE

By Matthew Lynn

May 9 (Bloomberg) — In the last decade, Europe has had no more successful politician than U.K. Prime Minister Tony Blair — successful at winning elections, that is.

Yet with his resignation expected this week, 10 years after Blair took office in May 1997, most of the business community will be pleased to see the back of him.

An April poll by the U.K.’s Institute of Directors found 45 percent of British firms thought the Labour government had been bad for business, while just 32 percent said it had been good. Worse, 52 percent judged the tax and spending policies unfavorably, with just 24 percent supporting them.

Is that verdict justified? After all, Blair could argue that he has presided over one of Europe’s most successful economies. A few people have made a lot of money, and most people have done well. There are plenty of jobs, the property market is buoyant, and sterling is strong. You would have to go back before World War I to find a prime minister who was so free of economic worries. What’s not to like about that?

There are six reasons to think the damning verdict is more than justified.

Blair portrays himself as a champion of free markets and enterprise. And yet he has allowed the role of the state to expand. The London-based Adam Smith Institute calculates Tax Freedom Day as the day when we stop working for the government and start working for ourselves — it has crept forward from May 27 in 1997 to June 1 now.

Squandered Changes

Economies are like supertankers: They take a long time to turn around. Most of the success of the past decade is the result of the changes made in the 1980s and early 1990s — and yet Blair squandered those without appearing to know what he was doing. It is hard to believe there won’t be a price to pay for that.

Likewise, Blair increased red tape and regulation, piling expenses onto companies. The British Chambers of Commerce set the total cost of rules introduced since 1998 at more than 55 billion pounds ($109 billion). One result of that has been the moderate performance of U.K. stocks since Blair came to power. The FTSE- 100 index was at about 4500 points when he took office, compared with almost 6600 now — an increase of less than 50 percent.

Meanwhile France’s CAC-40 and Germany’s DAX have both more than doubled over the same period. The sluggish performance of British shares in a generally healthy economy is one reason so many U.K. companies have been taken over by international bidders in the past decade. They are cheap. Blair needs to take some of the blame for that.

Poor Health, Transport

It isn’t as if there was much to show for the money. Even with the billions pumped into government coffers, the U.K. has terrible transport systems, poor education, and dismal health care. The Confederation of British Industry found that 78 percent of its members thought the pace of reform has been too slow in the public sector. All of that — transport and education in particular — places even more costs on business.

Much play is made by Blair of his international stature. He’s certainly famous. But it’s not as if he does much with it. Blair has failed to defend British companies. Look at the way that British businessmen can now routinely be extradited to the U.S. without the right to a hearing in their own country.

Likewise, he has failed to stand up for Royal Dutch Shell Plc and BP Plc in their contests with Russian President Vladimir Putin. Those are two of the U.K.’s most important companies. A French or U.S. president would battle hard for national champions. Blair couldn’t be bothered.

Cash for Peerages

Blair brought with him a banana-republic-style cronyism that has tarnished the quality of British public life. He was the first prime minister to be questioned in connection with a criminal inquiry, and two of his aides were arrested, as the police investigated allegations that businessmen received peerages in return for making loans to the Labour Party.

Nobody has been charged over the cash-for-peerages investigation and those questioned deny wrongdoing. Still, while that is the worst financial scandal of his reign, it isn’t the only one. In 1997, the Labour Party had to return a 1 million- pound campaign donation from Formula 1 car-racing boss Bernie Ecclestone amid claims the government sought to exempt him from a tobacco-advertising ban.

Nobody is pretending that money had no influence before Blair — but it got stronger under his rule.

Finally, there is his foreign policy. By recklessly following the U.S. into a war with Iraq, without ensuring proper planning for a postwar regime in return, Blair has squandered whatever influence the U.K. might have had around the world. He diminished the nation’s reputation.

People can place themselves on many different points of the political spectrum, in favor of bigger or smaller government, and more or less equality. Whichever point you occupy, there can be little argument that Blair’s premiership has been an incompetent mess. The country will breathe a sign of relief at his departure.

(Matthew Lynn is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: Matthew Lynn in London at [email protected]

Last Updated: May 8, 2007 19:08 EDT

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