Sign Here — You Know This is Good for You

President Calvin Coolidge, who held office during the 1920s, was renowned for his taciturnity. At a dinner once the woman sitting next to him trilled: “I have a bet with my friend that I can get you to say more than two words this evening.”

“You lose,” was Coolidge’s laconic reply.

But amid such reticence, Silent Cal would occasionally come up with a striking aphorism. Asked about the proper functions of the US Government, he said that “the chief business of the American people is business”.

In our world of continual state intervention, such a bald statement of free market principles appears extreme. Yet perhaps we could do with a dose of Coolidge’s libertarian commercial spirit. For we are now ruled by a political regime that seems to believe that the business of government is to foist dogma, bureaucracy and red tape on the wealth-producing private sector. The Prime Minister and the Chancellor like to boast of their attachment to enterprise, claiming that command-style socialism has been consigned to the dustbin of history.

But this is just empty rhetoric. In reality, the Government is addicted to bossing around private companies, imposing a deluge of regulations on health and safety, employment practices, recruitment, taxation and welfare distribution.

The situation is about to become even worse, as the Government resorts to using a new weapon of intervention against the private sector. In the name of promoting cultural diversity, ministers are imposing the concept of “contract compliance” on companies bidding for state work. What this means is that any company seeking a government contract has to prove that it has all the right ideological credentials, including a diverse workforce and a raft of anti-discrimination policies. Potential contractors have to demonstrate that they have eagerly embraced the politically correct values of new Labour, otherwise they cannot be part of the tendering process.

Contract compliance was first dreamt up by the hard Left in local government in the 1980s, with the lead provided by Ken Livingstone at the notorious GLC, where all kinds of political considerations were used to distort the award of contracts. The confectioners Rowntree Mackintosh, for instance, were not allowed to supply County Hall because of their alleged links with apartheid South Africa. Other zealous local authorities, such as Islington under Margaret Hodge, followed the GLC’s example, perceiving that contract compliance could be a powerful way of dictating the behaviour of local businesses.

The Tory Government under Margaret Thatcher, who shared some of Calvin Coolidge’s outlook, put a stop to much of this nonsense. Under competitive tendering laws, the award of contracts could be decided only by price and quality, not by political dogma. But since Labour came to power in 1997, contract compliance has been making an unwelcome comeback. One of the first acts of the Blair administration was to abolish compulsory competitive tendering in local government, replacing it with the so-called “best value” regime, which once more allowed town halls to impose their own ideology on the employment practices of contractors.

As the Government has become ever more obsessed with the issues of cultural diversity and alleged institutionalised racism, so contract compliance is sweeping through our civic order. All kinds of public organisations, from police authorities to charities, from Whitehall departments to quangos, are now demanding that private contractors prove their devotion to the new creed of the State. Given that spending on public sector procurement is estimated to be worth more than £100 billion a year, contract compliance can be used as a powerful tool of change. And legislation such as the 2000 Race Relations Amendment Act, which states that all public bodies have a duty to promote equality, has been an additional driving force.

Only last month the Government announced that companies bidding to run the £300 million New Deal programme will have to “prove their commitment to workplace diversity”.

Taking time out from complaining about the effects of mass immigration in her own Barking constituency, the Employment Minister Margaret Hodge reverted to Islington type by giving warning that “contracts will be awarded to those companies that monitor who they employ and offer appropriate opportunities to people from black and minority ethnic communities”. All too predictably, Mr Livingstone, the Mayor of London, has been at the forefront of this change, demanding that suppliers to his bloated administration fill in questionnaires showing how many black, disabled, gay and transgender employees they have.

An insight into the authoritarian mentality behind contract compliance is provided by a recent paper from the Metropolitan Police, entitled Diversity within procurement services. Reeking of ideological bullying, this document explains that all suppliers to the Met must fill in employment questionnaires, accept site visits and monitoring and “detail how they apply equal opportunities in their selection of sub-contractors”. As well as introducing specific annual targets for the procurement of goods from “minority groups”, the Met is also considering whether a specified percentage of contracts should be awarded to minority suppliers, which is surely a form of direct discrimination.

Some argue that, given the nature of multicultural modern Britain, there is nothing wrong with trying to use the power of the public sector to ensure that business reflects the make-up of the population, especially in employment. But the truth is that contract compliance involves a vast, costly extension of state bureaucracy, since it requires an army of inspectors, advisers and officers to ensure its implementation. By focusing on ideology rather than quality and value, it is bound to reduce efficiency. It might lead to a bonanza for well-heeled diversity consultants, but it will only act as a drain on the taxpayer.

There is a whiff of the Maoist permanent revolution about the diversity agenda. With levels of immigration reaching 600,000 a year, companies will be engaged in a perpetual struggle to keep up with the changing face of Britain. And there is certain to be a nasty air of reverse racism, with companies told that they are “too white” to be considered for contracts. Earlier this week, one of the Government’s leading race advisers, Professor Ted Cantle, spoke of some Midlands towns being “unhealthily white”.

That is the hectoring climate that compliance will now foster. The businesses of Britain are now seen largely as instruments of social transformation.