Hutton on Germany/England

["Ian Murray" <seamus2001@xxxxxxxx>]

Why the Germans are right about us

It hurts to be told that our public services are third-rate. We
already knew that. So why are we so patient? Why don't we complain
more?

Observer Election Special

Guardian Unlimited Politics

Will Hutton
Sunday May 27, 2001
The Observer

Stern magazine last week devoted 12 pages to reporting on what the
Germans now habitually call 'the English patient'. Its images of a
country where its poor live in Third World conditions, a fifth of the
adult population is illiterate, its public services are third rate,
25,000 people unnecessarily die annually from cancer and the
environment is casually disregarded don't fit with our own idea of
ourselves. The consensus was that it was over the top and one-sided -
and we could do the same hatchet job on the Germans if we chose.
But the truth has to be faced. There are areas of excellence, but by
and large Britain doesn't cut it. Our public services are third-rate.
And tellingly the same parsimony, shoddiness and acceptance of low
standards infect the abysmal quality of much of what goes on in the
private sector. The two are of a piece. The scale of the growing
productivity gap with the rest of Europe is one indicator, but the
deeper measure is the cultural stoicism with which we endure the
second best, the hand-me-down and the botch. Try as we might, we can't
hit back at the Germans in the same way. Their country has its
malfunctions, but it works.

Our seaside hotels are one of the more telling barometers of our
irredeemable second rateness - and which make the transport system
seem almost utopian. My room in Hove last year during the Labour Party
conference plumbed new depths; fraying and pockmarked carpet, torn,
cheap curtains, a shower that rained water over the ceiling which then
dripped onto the bathroom's stinking carpet, a rickety wardrobe
without hangers, and walls so thin that you could hear every aspect of
the other sufferers' nightly ablutions. Has the hotelier no shame that
he presides over such an establishment? Why do we feel so much
embarrassment about telling him to his face that his hotel is
terrible?

Try a comparable three star hotel in a similar resort in Germany, and
you enter a different world where investment, quality and service are
all inbred - and there are the institutions and culture to support
them. It would have borrowed from the local savings and mortgage banks
established to support local business investment, and it would have
ploughed the cash into the building - so there would be proper bedroom
walls and working bathroom fittings, built by a workforce with the
proper vocational skills trained by local, state-funded skill schools.
And German hotel guests would have complained vociferously if
standards fell below what they knew they should get.

And this is the rub. The speed with which the 'rip-off Britain'
campaign took off should alert even the most complacent defender of
the British private sector to its shortcomings. It doesn't invest
enough. It seems structurally incapable of treating its workforce
creatively and humanely, or demanding that they have high skills. It
treats its customers with highhanded indifference - try finding
someone who will go beyond the standard answer to any complaint at,
say, Dixons or a Sky call centre. And those at the top seem only
interested in rewarding themselves with stratospheric salaries.

Glance at the numbers. German workers have 70 per cent more capital
invested at their elbow for every hour worked compared with their
British counterparts. The combination of their high skills and high
investment mean they produce 29 per cent more for every hour they
work - allowing them to work 175 hours less every year. Over the 1990s
employment grew in Germany by 0.3 per cent a year - in Britain 0.4 per
cent year, despite our famed 'flexible labour market'. If Germany
hadn't been consumed by the overwhelming cost of integrating the East,
it would have generated just as many jobs as we did.

For 20 years we have been told that in order to improve our
productivity we must shatter trade unions, emasculate the welfare
state and offer the lowest marginal tax rates in order to incentivise
workers and managers alike. The ratio of our chief executives'
salaries to average production workers' pay is now twice that in
Germany; our benefit levels are about half as generous; our tax rates
uniformly lower. We are a much more unequal society, just as the
Conservatives said we needed to be in order to grow more productive.
But instead the productivity gap is widening, and the gulf between
their public services and ours has become a chasm.

Where Germany scores is that it understands the importance of ensuring
that the institutions - whether in training, science or banking - that
support its economy and society should be of the highest quality and
support the common interest. Article 14 of the German constitution
openly declares that 'property imposes duties. Its use should also
serve the public weal'. In Britain the notion that property rights are
accompanied by duties to the public weal is so weak that a company
like Railtrack thinks it is perfectly proper to pay dividends to its
shareholders while requesting more public subsidy. And Railtrack's
view is reproduced in spades across corporate Britain: business's
first responsibility is to its shareholders.

Britain needs to take the same care over the structure and values of
its key institutions whether in the public and private sector - and it
needs to find a way of making the quest for quality the norm. It
should be as insupportable for the public sector to build a
half-cocked motorway system littered with pinch-points so that
tailbacks are endemic as it is, say, for the private sector to convert
houses, hotels and flats so they are noisy and barely habitable. Put
another way, we will never get a high quality public sector until we
are prepared to regulate and create institutions that will get us a
high quality private sector - and asking our current private sector to
come to the rescue of the public sector, New Labour's big idea, is to
invite the blind to lead the blind.

If there are no written values at the core of the state in the form of
a constitution or basic law, then there is nothing around which
public-spirited excellence can cohere in the public and private sector
alike. And there is no provocation in the culture that gives ordinary
people the confidence to insist on the best and drop the dreadful
British embarrassment about making a fuss. Stern, basically, is
right - and little in this election campaign makes me think they won't
be able to write something similar in five years' time.