Hamish McRae: The changing art of government

'Politics is still parochial. We buy our cars from anywhere in the world but we have to buy our politicians from Britain'

Good morning, voter. So what do you want from the new government in terms of economic management?

One of the enduring features of the past four weeks has been Labour's message of economic competence: that it can deliver growth and stability. It will, in all probability, be rewarded for that today. In another four or five years' time, expect a similar judgement to be made. It will, however, be a judgement on different criteria. The truly interesting thing about the politics of western democracies is not who is in and who is out, but rather the revolution in the way in which governments are being judged by the voters.

"It is the economy, stupid," said the sign in the Clinton war room in 1992. It was indeed, for Bill Clinton won the election as voters punished the Bush administration for presiding over an albeit mild recession.

But the notion that voters just vote with their purses and wallets is already far too simplistic. There are many instances of governments being rejected despite delivering increased prosperity, or being re-elected in the depths of a slump. The last two British elections are testimony to that. Labour won in 1997 despite the fact that under the Tories the country had enjoyed four years of solid growth. The time before that, John Major won the election at the bottom of the early- 1990s recession.

So trying to manage the economic cycle so that it dovetails with the political one is clearly no longer a path to electoral triumph. We are wise to that, for we know there is a global economic cycle that is beyond the control of any national government. Instead, I suggest we want to feel that the government is playing the hand of cards it has been dealt in a competent and orderly manner. Incompetence is severely punished: it took Labour two decades to recover from the humiliation of the IMF bail-out in 1976, and the Tories have yet to live down sterling's ejection from the ERM in 1992.

Now, I suspect, the game is about to change again. Governments no longer are considered responsible for inflation, for control over that is now subcontracted to the central banks. In the UK, the Bank of England, while having operational independence, does still operate under the umbrella of government. The government appoints the independent members of the Monetary Committee and, of course, the Governor and deputies. So control of interest rates does remain within a constitutional framework and could, in extremis, be taken back. But in practice, power has shifted.

In the eurozone, power has been entirely relinquished. Interest rates are not even a national matter, for that has been subcontracted to the European Central Bank in Frankfurt. Were Britain to join the euro, then all those worries about the value of our currency or the level of interest rates would no longer be the province of government at all.

This would be an enormous shift. Those disasters of 1976 and 1992 that destroyed two governments could not happen: a government's reputation cannot be destroyed by a run on the currency if the country doesn't have a currency of its own. Indeed, our residual concerns about the balance of payments would simply disappear.

We may or may not join the euro during the course of the next parliament. If we were to do so, that would signal another seismic shift in the way voters would judge government. The perimeter of its competence would have shrunk dramatically. But even if we don't, as we can already see, the government is going to be blamed less for the value of sterling or for the level of interest rates than it was even a decade ago.

What is left? What are the benchmarks now?

Obviously, the quality of public services is one. Here, Labour has been extremely deft in arguing, and voters remarkably patient in accepting, that improving public services does take a while. We would not accept that excuse from a commercial company ­ we certainly don't accept it from Railtrack ­ but we have a different attitude towards the public sector.

But will these benchmarks also change during the next few years? You can catch a glimpse of this already, for Labour is committed to buying in more services from the private sector. The more it buys in and the less it does itself, the less it catches the blame when, as inevitably happens from time to time, something goes wrong. Had the railways not been privatised, some hapless minister for transport would have just had a very miserable few months. As it is, it is all someone else's fault. You see from the experience of the Dome how it is in the self-interest of governments not to get too directly involved in running things.

In another four or five years' time, we will still blame the government for the quality of public services, for that is what we have been schooled to do. But expect when things are not going too well to find the government distancing itself from the trouble.

It will explain that it is an enabling organisation, one that seeks to make sure that people have access to services rather than one that is directly responsible for the quality of those services. On the Continent, governments are not in general held directly responsible for the quality of health care. But they are responsible for the freedom of access to that care.

Will we buy this view? My guess is that next time around we won't. If public services are not significantly better in five years' time, we will react very badly. But in 10 or 20 years' time, our attitudes will be quite different. We won't hold a health minister responsible for the waiting-lists on the NHS any more than we would hold a transport minister responsible for not being able to get a seat on British Airways. We will, however, react much more angrily to the idea that there should be a hospital waiting-list at all.

There will, by contrast, be aspects of management where we will demand more of government than we do now.

First, I suspect that public safety will have become a much more political issue. Crime will not be regarded as a given, something that happens as a result of wider social forces over which government has little control. Instead, since crime destroys communities and impoverishes people's lives, cutting it will be seen as a measure of competence. Remember, there will be many more older voters, who will place a greater premium on order in society.

Second, governments will realise that economic competence requires a country to make itself attractive not just to existing residents but also to potential ones. Go back to the 1960s and the "brain drain" was dismissed as an inevitable if unpatriotic aspect of society. It was not seen as a political failure if people wanted to move abroad. Now, Tony Blair understands that the country must become a magnet for global talent, as it has indeed become ­ though he inherited the conditions that made this happen.

Politics is still parochial. We buy our cars from anywhere in the world but still have to buy our politicians from Britain. But the more the world economy is driven by talented people who can live anywhere, the more our politicians must attain global best-practice. We're not stupid. We will elect politicians who understand the world economy, not those who are good at making the Commons laugh at Question Time.