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Daily Telegraph: Blair’s ‘Fantasy Island’ should face same scrutiny as company directors

EXTRACT: Lord Browne told a lie about his private life and was forced to step down from the boards at BP and Goldman Sachs. His erstwhile rival, Sir Philip Watts, Shell’s chief executive, resigned in 2004 after the company admitted that its oil reserves had been overstated. Each felt hard done by…

THE ARTICLE

By Jeff Randall
Last Updated: 1:45am BST 16/05/2007

Ever since the scandals at Enron and WorldCom, company directors, especially those in the United States, have come under much greater scrutiny. And it’s not just shareholders who are turning up the heat.

The media, politicians and regulators, most of whom failed to spot a thick thread of criminality being sewn into the fabric of corporate life during the go-go 1990s, are keen not to be fooled again.

As a result, the burden of disclosure on senior executives has risen dramatically. Simply providing more information is not enough. Greater transparency has to be accompanied by pin-point accuracy.

As Lord Black is discovering in a Chicago courtroom, US authorities take a grave view of anyone whom they suspect of cheating the system. Black denies any wrongdoing, but if found guilty of defrauding investors he could spend the rest of his life behind bars.

Though Britain has opted for a lighter regulatory touch than America’s Sarbanes-Oxley rules, the pressure on our business leaders and their companies to be legal, honest, decent and truthful is increasingly exacting. The penalties for falling short are, in some cases, career-ending.

Lord Browne told a lie about his private life and was forced to step down from the boards at BP and Goldman Sachs. His erstwhile rival, Sir Philip Watts, Shell’s chief executive, resigned in 2004 after the company admitted that its oil reserves had been overstated.

Each felt hard done by, but their expulsions were necessary to avoid damaging the interests of shareholders and staff. Compare and contrast this rising bar of standards in business to what has happened to probity and clarity in British politics during the 10 years of Blair-Brown stewardship.

Neither Asbestos Anthony nor the Clunking Fist can look at a book without wanting to cook it (no wonder Jamie Oliver is the darling of Downing Street). They have debased and downgraded the machinery of administration. Official statistics are often little more than instruments of government propaganda.

If Blair had been running a company rather than driving a coach and horses through the integrity of high office, he would be in danger of being extradited in handcuffs to the United States. Instead, he’ll fly first-class to America, expecting £100,000 a pop on the lecture circuit.

The extent to which Britons have been conned – in many instances willingly – by Labour’s magic circle is laid bare in a new book, Fantasy Island*. In the same way that Geoffrey Wheatcroft’s Yo Blair! demolishes the outgoing prime minister’s character, Fantasy Island exposes “the incredible economic, political and social illusions of the Blair legacy”.

Read this book and weep. In a week when three London town halls rejected official immigration figures for grossly underestimating the real numbers, Fantasy Island sets out in exquisite detail the lies, damned lies and statistical legerdemain that define Labour in office.

It concludes: “Mr Blair… leaves behind him a seedy dream world mired in debt and bankruptcy, facing a looming crisis of employment and employability”.

So, who’s behind this excoriating work? Labour’s traditional enemies at the Adam Smith Society? The right-wing Institute of Economic Affairs? Conservative party insiders? None of the above.

The answer is Larry Elliott, economics editor of The Guardian. Yes, that paper. His joint author is Dan Atkinson, a former Guardian journalist, who now works for the Mail on Sunday.

I doff my cap to them. Who would have believed that The Guardian, a paper so supportive of New Labour’s Mandelsonian “values”, would spawn such a devastating critique of Blair’s record?

Their theme, which I crudely summarise, is that on just about all issues of importance to ordinary folk – personal finances, health, education, immigration, unemployment and defence – the season is about to change: from Blair’s illusory everlasting summer to a cold, dark winter.

As the joint architect of Labour’s wicked fiction, Gordon Brown will need a lot more than thermal underwear to keep him warm.

Between January 2000 and December 2005, consumer credit rose by 66pc and mortgage debt by 94pc. In the same period, average earnings rose by just 22pc.

Even in a time of low interest rates, the cost of debt servicing rose from 17pc of household income to 22pc – and is heading higher still. As unemployment creeps up, the elastic is beginning to snap.

At Durham University, one of Britain’s best, academics found that, despite the many extra billions tipped into state schools, much of the “improvement” in examination results resulted from grade inflation.

Further up the educational ladder, the explosion in undergraduate numbers has led to a steady fall in spending per student, to less than half the level of 1976. Not surprisingly, on Fantasy Island, many new graduates are “no better qualified than those leaving school with A levels a generation earlier”.

Britain’s unemployment is far higher than that indicated by official figures. Battalions of idle workers have been reclassified as unfit for work; others have been “parked” in vacuous higher educational courses.

Between 1997 and 2006, Labour created more than 600,000 public-sector jobs, not all of which have a purpose other than social engineering.

Perversely, the headcount in our armed forces has been cut at a time when we are asking them to perform miracles in Iraq.

Immigrants are pouring into the country, unchecked. Leaving aside problems of community disruption, over-crowding, pressure on social services and national security, many new arrivals undoubtedly fill a skills gap. But after 10 years of Labour, why does Britain have a skills gap?

How is it that relatively poor countries, such as Poland, have better-trained young people than we do? Answer: because too many at the bottom of the pile in Britain have been encouraged to take the soft option of welfare rather than do what’s required to find a job.

Labour has failed miserably. As Elliott and Atkinson conclude: “It’s time to wake up from the fantasy before the real world goes up in smoke”.

• Fantasy Island by Larry Elliott and Dan Atkinson is published by Constable Robinson, price £7.99

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/05/16/ccjeff16.xml

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