A visitor returning to Britain after 30 years could easily be fooled — by the sight of privatised buses and by the replacement of heavy nationalised industries by hi-tech business parks — into thinking that Britain has been transformed from a sub-socialist society into a dynamic free enterprise economy. In some ways that may be true, yet paradoxically the public sector is actually larger relative to the rest of the economy than it was in the dying days of the last Labour government. In 1979 the government accounted for 45 pence in every pound spent in the UK economy. This financial year it will be 47.5 pence.
What are public sector workers doing if they are no longer mining coal, driving buses or making steel? A huge and growing number of them are engaged in regulatory activities. We have gone from a blue-collar public sector to a white-collar one. The state does not work on the shop floor; it is employed upstairs in the compliance department, in health and safety and in human resources.
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