The Problem With This Government Is That It Is Blairite

John Harris writes:

To glimpse the sad state of Labour's soul as parliament breaks up for the summer, have a look at a modest YouTube hit, at the height of the controversy caused by the cancellation of new school buildings and Michael Gove's flawed lists: the Midlands MP and former Brownite consigliere Tom Watson fixes the schools secretary with a hateful look, surveys the great glasshouse around him, and calls Gove "a miserable pipsqueak of a man".

Such is a sound that may well echo into the autumn and beyond: Labour fury rendered comical because no one on the opposition benches is quite sure of the exact basis on which they're opposing the coalition's plans. The cuts, they insist, are savage, iniquitous and worse – but aside from vague talk of a rebalancing of tax rises and spending reductions from some of the leadership candidates, there is still little sense of any clear Labour alternative. Meanwhile, as the government readies us for supposed revolutions in health and education, something even more troubling eats away at Labour's being: might it have to take some of the blame?

In 2004, the Labour-aligned activist and writer Neal Lawson put flesh on the bones of the freshly formed pressure group Compass with a text entitled Dare More Democracy. As I flicked through it this week, one particularly prescient passage screamed from the page: "New Labour's gamble is … that the Tories will never get back into power – for if they do there will be no collectivist culture of institutions for the left to shield behind. The bleak years in opposition in the 1980s will feel like a picnic."

And here we are: the ramparts dividing public and private sectors long since weakened by the last government; the drive for "choice" and "contestability" ready to be taken to its logical conclusion. Also among my recent reading matter was Tony Blair's Labour conference speech of 2005, which captured him at his unhinged peak: "The NHS reforms, to break down the old monolith, bring in new providers, [and] allow patients choice, must continue. Money alone won't work … This autumn we will publish our education white paper. It will open up the system to new providers and new partners, allow greater parental choice, [and] expand foundation, academy and extended schools." Now think of plans lately laid out by Gove and Andrew Lansley, and feel a frisson of deja vu.

As the Guardian reported yesterday, the frantic pace of Gove's academies project may have been undermined by the yawning gap between the 1,000-plus schools initially said to want in, and the 153 who so far actually do. But this self-styled "born-again Blairite" will doubtless continue his drive to revive the vision Blair laid out five years ago, and cast off the qualifications that were reluctantly bolted on to the education bill of 2006 (only passed, let us not forget, thanks to Tory support; the Lib Dems, for what it's worth, were dead against). Following the story in some penthouse suite or departure lounge, the former prime minister must surely recognise his own legacy – and so it is with swaths of the coalition's plans. Yes, Gordon Brown and his allies may have slightly stymied what was once known as "eye-wateringly New Labour" policy, but they were too confused and introverted to decisively change direction, and the essential logic remained in place; now the Lib-Cons simply pick up the Blairite baton, and run like hell.

Simon Stevens, the "president of global health" at the US multinational UnitedHealth, offers more evidence of this grim continuity. In a giddy op-ed piece in the Financial Times, he recently saluted the coalition's plans for GP commissioning and a hugely expanded domestic healthcare market, and identified their pioneer: "The proposals come 10 years after Tony Blair … took the first steps down this path. What makes the coalition's proposals so radical is not that they tear up that earlier plan. It is that they move decisively towards fulfilling it – in a way that Mr Blair was blocked from doing by internal opposition within his own 'virtual coalition' government." Stevens should know: from 1997 to 2004 he was Blair's health policy adviser, before joining one of the corporations who stood to gain from where New Labour was heading.

And so to yet another social democratic institution punched and kicked by the last government, and under fresh attack. While defending his plans for schools, Gove has been taking refuge in uncharacteristically shrill claims of anti-government bias at the BBC; meanwhile, over at culture, Jeremy Hunt is preparing to hack the corporation down to size via an inexplicable cut in the licence fee, accusing it of "extraordinary and outrageous" waste, and promising "tough discussions". Again, continuity rules: the miserable bullying of the BBC circa 2004 paved the way for Ben Bradshaw – Labour's last culture secretary – to introduce the idea of a licence-fee cut and have a go at BBC management. Hunt can easily pass off his intentions as more of the same; Bradshaw should feel more than a pang of regret.

I recently went to a Labour leadership hustings where – contrary to the fashionable view that all is politesse and tedium – there was at least one really fascinating exchange. The coalition's plans for the NHS were raised, and out came pained admissions of Labour culpability: Ed Balls mentioned the Simon Stevens article; Ed Miliband said there had been times when New Labour seemed "indifferent about whether the NHS was in the public or private sector … it is a real problem for us". Those two candidates tend to talk about such subjects in slightly discomfited tones, presumably fearing that to question the Blair-Cameron-Clegg consensus is to be at loggerheads with a powerful part of the media class that would have us believe – erroneously – that privatising everything goes with the grain of public opinion. Way more salient are the logos of service companies that regularly adorn thinktank pamphlets, Westminster seminars and political booze-ups (the Fabian Society's summer party, it pains me to report, was sponsored by Serco) – but that's another story.

To oppose all this is not to lurch left, or to take the soft option; it does not preclude difficult debates about how to make public institutions more open and responsive. Indeed, one of the main arguments against Westminster and Whitehall's now standard model of "reform" is that it usually pushes things in the opposite direction. The main point is this: Labour has to open the page on an era when it laid the ground for the possible destruction of the few remaining bedrocks of what the leadership hopefuls call "Labour values" – with the obvious and frightening caveat that it may already be far, far too late.