ANALYSIS: Four tables outlining where New Labour’s strategy went wrong.

Labour didn’t just leave a mess in the Treasury: the economic damage is far greater

A senior contact in the Ministry formerly known as Mandelsonia was telling me over the weekend (now he feels able to) how very little of anything substantive Lord M did in his two and half years as Titlefinder General. Being an inveterate gossip, I mentioned this to a LibDem chum.

“Ah but you see” he told me in return, “That’s Peter, isn’t it? Very New Labour: the triumph of services over real industry. The bon mot and the discussion document. The grand launch and the big announcement. But once the crowd disperses, he was always off to the next makeover.”

A couple of weeks ago The Slog looked at growth rates in output and employment in the public sector, the bottom line of which was with that ‘the recovery’ is largely in the public sector, and as it now stands at 47.9% of the economy, our chances of earning any export orders out of that ‘recovery’ are around zero. I keep writing to Will Hutton about this, but he never replies these days.

Last week we looked at the latest data on manufacturing and production versus services in the private sector, showing further how even in that private sector, any ‘recovery’ was largely apparent in businesses neither producing, growing or manufacturing stuff.

I want now to look at today’s ONS data on the subject of what employees are actually doing in our economy as a result of the previous Government’s education ‘strategy’. Bear with this, it’s an interesting study in how to be ingeniously stupid.

While it feels very good to write ‘previous Government’ in relation to New Labour, the damage they did is going to be with us for some time….as these figures show. I’m sure that, like mine, many a mouth fell open in amazement the day a Government minister told Parliament how by 2020, 100% of kids would go to University. And if at that time you wondered who the plumbers, electricians, carpenters, brickies and navvies were going to be, well – these figures give you the answer you suspected…and a lot of other things we really don’t want to think about too much.

The products of our education ‘system’ are busy either trying to get work with a media studies degree from Aston (18-25s unemployment is at an all-time high) or becoming one of the chiefs, managers, service providers and professionals of whom we have far too many already. While employment has fallen 2.2% since the Greatest Ever arrived in 2007, the lawyers and accountants are up by 4.2%, and the consultants plus various financial, built environment and advertising strategists are storming ahead at 6.7%. If you’re reassured by this, then spare a thought for the Indians in skilled trades (down 2.5%) and machine operatives (down 3.5%).

In short, the expected imbalances are coming through. Amazingly, today the British economy is peopled 45% by senior management and professions, 28% by administrators – and 18% by those who drive, lift, carve, build, sew, rewire and dig. (It’s unclear what the other 9% are up to).

But fear not, because productivity is holding steady. Or rather, it is in the public sector. In production industries it’s fallen 14% since 2005, and in manufacturing it’s down 11%.

I’m not quite sure how civil service productivity is measured (I suppose it helps that it’s measured by civil servants) but maybe that number is based on the number of extra pen-pushers being produced every year. So it looks like new public sector fairness Tsar Will Hutton won’t be short of things to do.

To be fair to Will, while he won’t agree with a word of this piece, he does have an admirable sense of what’s fair – and will very probably do some good in his new (unpaid) appointment. But if Frank Field is to get anywhere at his much bigger task in relation to poverty, then the first thing he’ll need in the way of help is an end to the poverty of thought in Government – and specifically in education. I think Cameron’s decision to employ the bloke is one of the outstanding political decisions of the last thirty years.

I’m not trying to make cheap Daily Mail points here: Field is a major-league hero of mine, because he is what Labour used to be about when I supported the Party. That is, he enjoys the same intimate relationship with commonsense, honour and genuine compassion that drives the best politicians in all democratic Parties. But the Party of which he is a part have messed things up bigtime.

They’re not alone in that: Thatcher had a naive belief in service industries and Major was just a dull trimmer who enjoyed going to the Oval. But the opportunity handed to Blair in 1997 wasn’t so much wasted as blown to smithereens by a combination of hubris, process, targets and bullshit. So far, I see not a single sign that the clowns lining up to take over from Gordon are anything other than more of the same: bourgeois Oxbridge twerps all – men who couldn’t tell a spade from a junction box.

I wish Will and Frank the very best of luck; they’re going to need it.