You will no doubt have seen the recent reports regarding home repossessions by Northern Rock. This has led to a wider debate on the repossessions all banks are making, especially those that have received substantial amounts of public money in the form of extra capital, and extra loans from the Bank of England. We can all see the heartache losing your home brings, and can imagine the sorrow and difficulties it would bring to us if it ever happened. Less easy to see is what it costs all of us, as taxpayers, when it happens. Families made newly homeless need to be housed and supported, while our neighbourhoods are blighted by empty homes, forlorn "For Sale" signs waiting for an answer.
In the first 6 months of this year, 19,000 homes were repossessed. In the second six months, 26,000 more are expected to be repossessed. The government tells us that they, and us, expect banks to be more lenient because of the support we, as taxpayers, have given them. But if the response of the bankers and shareholders (here and here also) to our help has shown us anything, it is that we cannot expect them to behave in anything but their own crass material self-interests. And their self-interest does not match the interests of society and taxpayers.
However, Labour ministers have repeatedly stressed that they will not be dictating policy to the banks we now own large stakes in. They are running scared from any possible accusation that this is anything but a part-nationalisation, anything other than support, silent support, for the banks and the economy. All they are willing to do is exhort from the sidelines, despite the legitimate interests of all of us, as taxpayers.
Meanwhile, the chancellor is talking about bringing forward massive investments in infrastructure, following the Keynesian route out of a recession. This is something that should be applauded, as injecting that money into the economy is the best hope we have of making the recession short and shallow.
So perhaps a way to put money into the economy at the same time as helping banks and mortgage payers is needed.
The idea is simple: Allow everyone who is paying a mortgage on their primary residence to apply for a two year mortgage holiday. This would involve them only paying the interest on their mortgage for those two years. However, because we don't want to be giving those who have taken on too much a free ride, this will involve a charge on the mortgage holder of a percentage of their mortgage cost. To ensure the banks aren't hit by this, the government will loan an amount equal to the expected repayments to the banks, which will be repaid, with interest, over the next 5 to 10 years.
This plan would ensure those who need help with their mortgage in the economic downturn get it, while the charge will discourage those who don't need it. The banks will, instead of having an uncertain revenue stream from struggling mortgage holders, have a guaranteed income from the government to support them. And the money freed up from mortgage payments will be put into the economy, either through direct spending, or by being deposited in the banks, encouraging them to begin lending to small businesses again.
Note, however, this is only for mortgages on primary residences - on people's homes. It does not cover commercial mortgages, or those houses bought as buy-to-let. Commercial property is a commercial venture, and must stand or fall on its own. The same is true for buy-to-let houses. However, in this case, we must also ensure we support the tenants.
To this end, I also propose that all banks must give first refusal on houses that are being repossessed to the local council. They will be supported with government money to purchase these homes as social housing, giving continuity to tenants. Of course, the price paid must be a fair one, found with reference to the local market.
Finally, when the two years are up, it is hoped that the economy will be moving out of recession. Wages should be rising, enabling those who were previously struggling to meet their repayments. And for those who still cannot afford to meet their commitments, they, or the banks, will face an economy better able to provide buyers for houses.
Originally, I thought this scheme could easily be introduced into the banks that have either been taken over or have received large injections of capital from the government. However, to prevent this from distorting the entire market, and to ensure assistance is provided for the mortgage holders in other banks, I now believe it would be best to ensure this is available across the industry. All banks should be able to benefit from a little more security, and all mortgage-payers in their own homes should be able to benefit from a little more breathing space. And all of us should be able to benefit from more money going into the economy.
This plan is essentially an extension of the mortgage rescue scheme announced at the start of September. Under that scheme, councils or housing associations could buy the home and rent back, buy part of the home, or simply loan money to the owner to allow them to keep up repayments. The version I have set out here, however, can be extended to help more people, forces a real charge on them to ensure reckless borrowing does not go unpunished, and has the benefit of giving a secure income stream to banks. The repayments from the bank to the government will make sure the taxpayer is not out of pocket. And finally, and most importantly, more money will be put into the economy through the spending of mortgage holders assisted, meaning this policy can help us come out of recession, as opposed to only alleviating repossessions. That truly helps every one of us.
Monday 20 October 2008
Sunday 12 October 2008
Bank Nationalisation
"No longer is state ownership the unpalatable solution for wayward individuals like Northern Rock and Bradford & Bingley, but a logical fix for the whole industry."
So says Philip Aldrick in the Sunday Telegraph.
If even the Telegraph start saying things like this, why are the Labour government still running so scared from the prospect? Why not bite the bullet and nationalise, even if only for the medium-term? This level of control would allow the government greater tools to support the rest of the economy, and once stabilised, you could even privatise the banks again, should you want to.
Instead we have a bailout which is already beginning to look like it may not be enough, and could turn into a death by a thousand cuts, as the government slowly takes a bigger and bigger slice of each institution, all while the lack of confidence in the banks causes chaos in the real economy. Let's just nationalise them, and give ourselves a firm foundation to fight the rest of this crisis from.
So says Philip Aldrick in the Sunday Telegraph.
If even the Telegraph start saying things like this, why are the Labour government still running so scared from the prospect? Why not bite the bullet and nationalise, even if only for the medium-term? This level of control would allow the government greater tools to support the rest of the economy, and once stabilised, you could even privatise the banks again, should you want to.
Instead we have a bailout which is already beginning to look like it may not be enough, and could turn into a death by a thousand cuts, as the government slowly takes a bigger and bigger slice of each institution, all while the lack of confidence in the banks causes chaos in the real economy. Let's just nationalise them, and give ourselves a firm foundation to fight the rest of this crisis from.
Thursday 9 October 2008
May you live in interesting times
We are living through momentous times. In the US, $700bn of taxpayer's money has been made available to buy bank assets no-one wants. In the UK, £500bn is being made available to provide short term loans to banks, to guarantee loans between banks, and even to buy into banks. The ideas of Thatcherism and Reaganomics that arose on either side of the Atlantic in the 1980s have reached their inevitable conclusion, with the era of individual greed collapsing into the era of shared debts. The profits were privatised, and the debts are being nationalised.
And yet despite this spectacular collapse of the economic system that we have been stuck with for the past 30 years or so, we are being told that now is not the time for recriminations, now is not the time for an investigation. The usual suspects, those who made the most, or those who represent them, are appearing on TV, on the radio, in newspapers, to tell us not to forget how wonderful the last few decades have been for them, that we mustn't over-react and risk their future profits.
We've just had our pockets picked, and the thief is trying to tell us not to call the police.
Don't forget the good years, we're told. Don't forget how good you've had it. They must think we're stupid. If you're on a roller-coaster, having a great time as it soars and dips, you're going to be hurt when it suddenly runs out of track. It doesn't make sense to pick yourself up, wait for your bones to heal, and then go and get on the ride again because it was fun at the beginning. If you get pushed off a cliff, you may be fine all the way down, but it's the landing which is important. You don't go back to the top to be shoved off again.
Besides, was it really that good? In the UK, the percentage of people in poverty (getting under 60% of the median income) was 13.7% in 1979, when Thatcher came to power. By the end of the Conservative government in 1996/97, it was up to 25.3%. A quarter of our population was living in poverty. By 2006/07, the Labour government had managed to bring that down from its high – to 22.2%.
Let's put that in context – the change from 1979 levels of poverty has put about 5.1 million more people into poverty. That is the same as the population of Scotland. We've increased the number of our fellow citizens in poverty by the size of a country. This is the result of the 'good' years.
Now is the time for recriminations. Now is the time to investigate.
Now is the time to do this, because this appalling behaviour will effect not only us, but our children. The money being used for bailouts on both sides of the Atlantic is new debt for the governments. New debt that will have to be paid off at some point, by us, by our children, by our grandchildren.
Next time you are out at night, look up at the stars. Look at the glittering magnitude of the sky. See the sweep of the Milky Way, our galaxy. In our galaxy, there are between 200 and 400 billion stars (it's hard to get an exact figure, as we're in the middle of it).
If each star was worth one pound, you couldn't cover the UK bailout.
Now look for that little smudge that is the Andromeda Galaxy, the largest galaxy in our local group, and the closest spiral galaxy to our own. If you look at it through a telescope, you get some idea of its size. Unfortunately, it's tilted such that you can't really see its spiral nature clearly, but it is still an amazing sight. In that galaxy, 220,000 light-years across, there are 1 trillion stars.
If each were worth a dollar (less than in our own galaxy, because there's bound to be a transport costs...) you would need 10 Andromeda Galaxies to pay off the US national debt.
The figures involved here truly are astronomical.
Now is the time for recriminations. Now is the time to investigate.
We are shoring up our banking system because banks provide a vital function in our economy. They hold the money we have, they move it around between us, they make payments possible, they loan our money out, to businesses, to home-buyers. This, if you like, is the banking system as a utility that we all need, like electricity, or water. Then we have the other side, which is involved in the trading of complex financial instruments, passing debt around in parcels, and other games on the financial markets. This part is, frankly, more akin to a casino. And the casino is where the banks have been making their massive losses.
So there we are, with a utility, and a casino. And we're having to make good their losses in the casino, because otherwise they'll shut the utility. This isn't right. We shouldn't be held to ransom over their failures.
Here's a little comparison for you: once upon a time, there was a utility company, providing electricity, natural gas, water and the like. Then they decided what they really wanted to do was start trading these items as commodities and related derivatives. And, amazingly enough, they started making massive losses, while paying their executives handsomely. Eventually, the losses couldn't be hidden, and the company collapsed. Ladies and gentlemen, I give you Enron.
Our banks have behaved just like Enron. There are some differences, of course, not least that Enron had to hide losses to give executives massive payouts. This is mainly because they were trading in something much more tangible than our banks have been, and it had to be delivered. Our banks, however, all had the same collective delusion that what they were doing made sense, and kept trading ever higher – right up until it became clear that the things they were trading, the money they expected to get from mortgage payments, wasn't actually going to arrive.
It is now clear that Enron was a case of deliberate criminal acts by executives. Our bank executives, however, are claiming that in their case it is all due to stupidity, not criminality. And we're being told now is not the time for recriminations, now is not the time to investigate.
Now is the time for recriminations. Now is the time to investigate.
But most importantly, now is the time to make sure this can't happen again.
Here in the UK, we may soon end up with substantial government investments in most, if not all, of our high street banks. Now, these high street banks (usually) perform the functions of the utility side of banking. Why, then, if we are putting such large amounts of money into these banks, can we not impose stringent new conditions on them, or even (whisper it) take them over completely? We have been bombarded from all sides recently with how important this utility function is, how it cannot be allowed to stop without bringing the whole economy down. OK. Then make sure they can never again take our money to the casino. Limit them only to the activities of the utility. Prevent them, by law, or by ownership, from gambling not only with our deposits, but with the whole economy.
There will be those who say that this is crazy, that if we stop banks raising money in the casino we will prevent credit being available so easily. And yes, it would stop credit being so easily available. But one of the causes of this present chaos was the eagerness of banks to provide credit too easily, because they could parcel it up and pass it on, hoping they wouldn't be left holding it when the music stopped. It is time for all of us to take a bit of pain, to gain a bit of responsibility. Credit has to be harder to get hold of, because we, and the banks, have been too irresponsible with it. The banks were the ones pushing this particular drug, but we were happy to take it. The only difference is that the financial experts should have known better.
We managed to get along for years without these bizarre financial products that have led to disaster. We can get by without them again. We must get by without them again. And we should look at the pushers, and find out how much they knew, if they knew the chaos they were brewing up for the future.
Now is the time for recriminations. Now is the time to investigate.
In the past few decades, our actions seem to have guaranteed we will saddle our children, our grandchildren, and beyond, not only with massive debt, but with an unhealthy, heating, damaged world to live in. Our greed has effected their balance sheets, and their world.
It's about time we grew up. Because our kids are sure as hell going to have to grow up fast.
But the first step to growing up is admitting what we have done. It's looking at how we have behaved, and how we were wrong. It's facing up to the greed endemic throughout our system, self-destructive greed that is going to make us all poorer for years, if not generations, to come. And part of showing we have grown up is making sure that those who have behaved badly, those who have behaved stupidly, or criminally, or negligently, are held to account for what they have done. We need to take a good long look at our banks.
Now is the time for recriminations. Now is the time to investigate.
And yet despite this spectacular collapse of the economic system that we have been stuck with for the past 30 years or so, we are being told that now is not the time for recriminations, now is not the time for an investigation. The usual suspects, those who made the most, or those who represent them, are appearing on TV, on the radio, in newspapers, to tell us not to forget how wonderful the last few decades have been for them, that we mustn't over-react and risk their future profits.
We've just had our pockets picked, and the thief is trying to tell us not to call the police.
Don't forget the good years, we're told. Don't forget how good you've had it. They must think we're stupid. If you're on a roller-coaster, having a great time as it soars and dips, you're going to be hurt when it suddenly runs out of track. It doesn't make sense to pick yourself up, wait for your bones to heal, and then go and get on the ride again because it was fun at the beginning. If you get pushed off a cliff, you may be fine all the way down, but it's the landing which is important. You don't go back to the top to be shoved off again.
Besides, was it really that good? In the UK, the percentage of people in poverty (getting under 60% of the median income) was 13.7% in 1979, when Thatcher came to power. By the end of the Conservative government in 1996/97, it was up to 25.3%. A quarter of our population was living in poverty. By 2006/07, the Labour government had managed to bring that down from its high – to 22.2%.
Let's put that in context – the change from 1979 levels of poverty has put about 5.1 million more people into poverty. That is the same as the population of Scotland. We've increased the number of our fellow citizens in poverty by the size of a country. This is the result of the 'good' years.
Now is the time for recriminations. Now is the time to investigate.
Now is the time to do this, because this appalling behaviour will effect not only us, but our children. The money being used for bailouts on both sides of the Atlantic is new debt for the governments. New debt that will have to be paid off at some point, by us, by our children, by our grandchildren.
Next time you are out at night, look up at the stars. Look at the glittering magnitude of the sky. See the sweep of the Milky Way, our galaxy. In our galaxy, there are between 200 and 400 billion stars (it's hard to get an exact figure, as we're in the middle of it).
If each star was worth one pound, you couldn't cover the UK bailout.
Now look for that little smudge that is the Andromeda Galaxy, the largest galaxy in our local group, and the closest spiral galaxy to our own. If you look at it through a telescope, you get some idea of its size. Unfortunately, it's tilted such that you can't really see its spiral nature clearly, but it is still an amazing sight. In that galaxy, 220,000 light-years across, there are 1 trillion stars.
If each were worth a dollar (less than in our own galaxy, because there's bound to be a transport costs...) you would need 10 Andromeda Galaxies to pay off the US national debt.
The figures involved here truly are astronomical.
Now is the time for recriminations. Now is the time to investigate.
We are shoring up our banking system because banks provide a vital function in our economy. They hold the money we have, they move it around between us, they make payments possible, they loan our money out, to businesses, to home-buyers. This, if you like, is the banking system as a utility that we all need, like electricity, or water. Then we have the other side, which is involved in the trading of complex financial instruments, passing debt around in parcels, and other games on the financial markets. This part is, frankly, more akin to a casino. And the casino is where the banks have been making their massive losses.
So there we are, with a utility, and a casino. And we're having to make good their losses in the casino, because otherwise they'll shut the utility. This isn't right. We shouldn't be held to ransom over their failures.
Here's a little comparison for you: once upon a time, there was a utility company, providing electricity, natural gas, water and the like. Then they decided what they really wanted to do was start trading these items as commodities and related derivatives. And, amazingly enough, they started making massive losses, while paying their executives handsomely. Eventually, the losses couldn't be hidden, and the company collapsed. Ladies and gentlemen, I give you Enron.
Our banks have behaved just like Enron. There are some differences, of course, not least that Enron had to hide losses to give executives massive payouts. This is mainly because they were trading in something much more tangible than our banks have been, and it had to be delivered. Our banks, however, all had the same collective delusion that what they were doing made sense, and kept trading ever higher – right up until it became clear that the things they were trading, the money they expected to get from mortgage payments, wasn't actually going to arrive.
It is now clear that Enron was a case of deliberate criminal acts by executives. Our bank executives, however, are claiming that in their case it is all due to stupidity, not criminality. And we're being told now is not the time for recriminations, now is not the time to investigate.
Now is the time for recriminations. Now is the time to investigate.
But most importantly, now is the time to make sure this can't happen again.
Here in the UK, we may soon end up with substantial government investments in most, if not all, of our high street banks. Now, these high street banks (usually) perform the functions of the utility side of banking. Why, then, if we are putting such large amounts of money into these banks, can we not impose stringent new conditions on them, or even (whisper it) take them over completely? We have been bombarded from all sides recently with how important this utility function is, how it cannot be allowed to stop without bringing the whole economy down. OK. Then make sure they can never again take our money to the casino. Limit them only to the activities of the utility. Prevent them, by law, or by ownership, from gambling not only with our deposits, but with the whole economy.
There will be those who say that this is crazy, that if we stop banks raising money in the casino we will prevent credit being available so easily. And yes, it would stop credit being so easily available. But one of the causes of this present chaos was the eagerness of banks to provide credit too easily, because they could parcel it up and pass it on, hoping they wouldn't be left holding it when the music stopped. It is time for all of us to take a bit of pain, to gain a bit of responsibility. Credit has to be harder to get hold of, because we, and the banks, have been too irresponsible with it. The banks were the ones pushing this particular drug, but we were happy to take it. The only difference is that the financial experts should have known better.
We managed to get along for years without these bizarre financial products that have led to disaster. We can get by without them again. We must get by without them again. And we should look at the pushers, and find out how much they knew, if they knew the chaos they were brewing up for the future.
Now is the time for recriminations. Now is the time to investigate.
In the past few decades, our actions seem to have guaranteed we will saddle our children, our grandchildren, and beyond, not only with massive debt, but with an unhealthy, heating, damaged world to live in. Our greed has effected their balance sheets, and their world.
It's about time we grew up. Because our kids are sure as hell going to have to grow up fast.
But the first step to growing up is admitting what we have done. It's looking at how we have behaved, and how we were wrong. It's facing up to the greed endemic throughout our system, self-destructive greed that is going to make us all poorer for years, if not generations, to come. And part of showing we have grown up is making sure that those who have behaved badly, those who have behaved stupidly, or criminally, or negligently, are held to account for what they have done. We need to take a good long look at our banks.
Now is the time for recriminations. Now is the time to investigate.
Monday 14 July 2008
The big Brown mess we're in - Part 3
So if I think there is something wrong with British politics, what is it?
It seems to me that what British politics is missing at the moment is that simplest of things, a narrative. In the previous two parts of this polemic, I have tried to weave a story together from disparate events. Now, you and I both know that events are rarely that simple. A does not lead to B that leads to C, and so on. But sometimes that is partly true, and, frankly, we prefer to have the thread of a narrative running through these events. People want to believe the world is explainable, and the story may be a complex scientific theory, a baroque religious myth, or even some amateurish scribblings like mine. We cling to that story, because it makes us feel better.
And I contend we are better for these stories. Stories help us to make sense of the world, and just as importantly help us to understand ourselves. They give us themes we can hold to guide us in our lives - will we be the the cowboy in the white hat, or the one who wears black? Will we be Rapunzel, or Maid Marion? Lancelot, or Arthur? Hell, Roy Rogers or Trigger...
In politics, it is even more important to have a narrative to tell the public. Usually the broad themes have come easy - it will always be the good guys (us) versus the bad guys (various). We have seen this in the Cold War, we have seen this in our new 'clash of civilisations'. But this is not enough. We get bored with only one story. What we also want is the story of where we are going, not just where we are. We want to believe our masters have a plan, a destination in mind, a vision of what they want the country to be.
Tony Blair had that story. He swept to power with the old story about a vibrant young country, Cool Britannia, which was going to take on the world with style and panache. He told us that we, all of us, were going to make things better. No problem was insoluble, and together we were going to throw of the troubles of the past.
He had a story, and we bought into it. We liked it. We wanted to be part of it.
But now? Brown is not a storyteller. He is dour, a competent administrator, a man who can get things done. But he doesn't have the capacity to sparkle. He doesn't have the ability to captivate, and that is what we yearn. And that lack means we no longer let him be the man who gets things done.
But along comes Cameron, and he has a new story for us. About a fresh faced young man who leads a kind party, who are coming to save us from the stuffy old sorts. He is going to make the world right, he is going to heal the world, save the world with nice green policies.
It's a good story. But there are better ones out there.
I'm now going to have a look at US politics to try and see where we can go. I apologise in advance for my naivety and lack of understanding of American politics - I'm talking as a complete outsider, making wild assumptions based on inadequate press coverage. So for all our American friends: Sorry. But I'm going to tell you the story of how I see it.
Any successful political narrative, the narrative of a government, has to tell us who we are, and where we are going. It has to reassure us about the future. There are two basic ways of doing this.
The first has been used by the Republicans for a number of years now. They will tell you a story about how great America is, about all the wonderful ideals and values it has, and that it has shared with the world. And their vision for the future is to tell you how they will protect those values, they will keep them safe, protect the glories of the country from perils within the country, and from foreign lands.
The second has been used by Obama in the primaries. He told a story of how great America is, about the wonderful ideals and values it has, and that it has shared with the world. And his vision for the future is to take those values, to take those ideals, and to build on them. His story is to tell you that yes, we have done so well, but we can do better. His story is to tell you to never settle for what you have, never to rest on past glories, but to move forward, to strive to be better than you were.
This is, as you will have seen, a restating of the positions of conservative against progressive politics. One seeks to preserve what is good, the other seeks to make it better. One risks stagnation, one risks strife. These two positions have been the dominant themes of western politics for as long as I can remember. (Note that conservative versus progressive here doesn't split neatly down party lines - in the UK, you'd have to say under this model Thatcher was a progressive - she sought to change society. I may not agree with it, but that's a different story.)
But the stories are more than this. They are designed to elicit a certain response. The first seeks to inspire fear - fear of the unknown, of change, of the future. The second seeks to inspire hope - hope for improvement, for change, for the future. And I think the American public are getting ready for hope.
Clinton's campaign seemed (again to a complete outsider) to be based a little bit on fear. She portrayed herself as the Washington insider, someone who knew how the game was played, someone who could get things done by virtue of her experience. Obama was the opposite - he portrayed himself as someone who would take the public's desire for change, and make it happen, regardless of the opposition. One position is for those who fear failure, the other is for those who hope for success.
And that's why I don't think much of Cameron's story. He's been very good at telling us who he isn't, about what he wouldn't be like. But for me, he hasn't yet told us who he is. He hasn't yet set out a clear vision for the future. He hasn't told people of hope. He's told us to fear more of the same.
I suppose that's why I can't give up on the Labour Party just yet. They've always had the better stories. They've given me stories of how the world can be better, of how we can work together to give every single one of us a better life, a more fulfilled life. But they haven't been telling me that story for a long time.
New Labour wasn't based on hope. Oh, they told us it was, they gave us hope, but the whole idea of it was based on fear. The triangulation theory was there because the people at the top were afraid the public wouldn't be with them, wouldn't hope with them. They had been out of power for 18 years, and they were afraid they'd stay there. Fear built them a system that won elections, but didn't win the future.
But now I, at least, think things will have to change. The game-plan they have used for the last three elections doesn't seem to be working now. They can't rely on fear of the Tories anymore. Fear isn't working. Now, perhaps, they will turn to hope.
Even if they don't, I still believe things will change. Because I believe the British people are, like the Americans, starting to turn away from fear. If the Conservatives are to ride that feeling all the way, then they need to talk of hope too. And once one of the major parties has, the other has to join in, or face utter defeat.
And that's a good thing. Because I am tired of seeing non-entities lead us. I am tired of slick debating tactics used to belittle both opponents and members of the public who don't play along. I am tired of people I wouldn't want to work for making laws. I am tired of middle managers as Prime Minister. I am tired of politicians who are so professional.
Because I don't want smooth style and slick efficiency in politics. Because I want to see someone with fire in their belly, passion in their heart, anger in their eyes, and righteousness in their voice. Because I want a politician who has a vision for the future. Because I want to see a politician who wants to change the world, not manage it. Because I want to see a politician that believes.
Because I want to hope again.
It seems to me that what British politics is missing at the moment is that simplest of things, a narrative. In the previous two parts of this polemic, I have tried to weave a story together from disparate events. Now, you and I both know that events are rarely that simple. A does not lead to B that leads to C, and so on. But sometimes that is partly true, and, frankly, we prefer to have the thread of a narrative running through these events. People want to believe the world is explainable, and the story may be a complex scientific theory, a baroque religious myth, or even some amateurish scribblings like mine. We cling to that story, because it makes us feel better.
And I contend we are better for these stories. Stories help us to make sense of the world, and just as importantly help us to understand ourselves. They give us themes we can hold to guide us in our lives - will we be the the cowboy in the white hat, or the one who wears black? Will we be Rapunzel, or Maid Marion? Lancelot, or Arthur? Hell, Roy Rogers or Trigger...
In politics, it is even more important to have a narrative to tell the public. Usually the broad themes have come easy - it will always be the good guys (us) versus the bad guys (various). We have seen this in the Cold War, we have seen this in our new 'clash of civilisations'. But this is not enough. We get bored with only one story. What we also want is the story of where we are going, not just where we are. We want to believe our masters have a plan, a destination in mind, a vision of what they want the country to be.
Tony Blair had that story. He swept to power with the old story about a vibrant young country, Cool Britannia, which was going to take on the world with style and panache. He told us that we, all of us, were going to make things better. No problem was insoluble, and together we were going to throw of the troubles of the past.
He had a story, and we bought into it. We liked it. We wanted to be part of it.
But now? Brown is not a storyteller. He is dour, a competent administrator, a man who can get things done. But he doesn't have the capacity to sparkle. He doesn't have the ability to captivate, and that is what we yearn. And that lack means we no longer let him be the man who gets things done.
But along comes Cameron, and he has a new story for us. About a fresh faced young man who leads a kind party, who are coming to save us from the stuffy old sorts. He is going to make the world right, he is going to heal the world, save the world with nice green policies.
It's a good story. But there are better ones out there.
I'm now going to have a look at US politics to try and see where we can go. I apologise in advance for my naivety and lack of understanding of American politics - I'm talking as a complete outsider, making wild assumptions based on inadequate press coverage. So for all our American friends: Sorry. But I'm going to tell you the story of how I see it.
Any successful political narrative, the narrative of a government, has to tell us who we are, and where we are going. It has to reassure us about the future. There are two basic ways of doing this.
The first has been used by the Republicans for a number of years now. They will tell you a story about how great America is, about all the wonderful ideals and values it has, and that it has shared with the world. And their vision for the future is to tell you how they will protect those values, they will keep them safe, protect the glories of the country from perils within the country, and from foreign lands.
The second has been used by Obama in the primaries. He told a story of how great America is, about the wonderful ideals and values it has, and that it has shared with the world. And his vision for the future is to take those values, to take those ideals, and to build on them. His story is to tell you that yes, we have done so well, but we can do better. His story is to tell you to never settle for what you have, never to rest on past glories, but to move forward, to strive to be better than you were.
This is, as you will have seen, a restating of the positions of conservative against progressive politics. One seeks to preserve what is good, the other seeks to make it better. One risks stagnation, one risks strife. These two positions have been the dominant themes of western politics for as long as I can remember. (Note that conservative versus progressive here doesn't split neatly down party lines - in the UK, you'd have to say under this model Thatcher was a progressive - she sought to change society. I may not agree with it, but that's a different story.)
But the stories are more than this. They are designed to elicit a certain response. The first seeks to inspire fear - fear of the unknown, of change, of the future. The second seeks to inspire hope - hope for improvement, for change, for the future. And I think the American public are getting ready for hope.
Clinton's campaign seemed (again to a complete outsider) to be based a little bit on fear. She portrayed herself as the Washington insider, someone who knew how the game was played, someone who could get things done by virtue of her experience. Obama was the opposite - he portrayed himself as someone who would take the public's desire for change, and make it happen, regardless of the opposition. One position is for those who fear failure, the other is for those who hope for success.
And that's why I don't think much of Cameron's story. He's been very good at telling us who he isn't, about what he wouldn't be like. But for me, he hasn't yet told us who he is. He hasn't yet set out a clear vision for the future. He hasn't told people of hope. He's told us to fear more of the same.
I suppose that's why I can't give up on the Labour Party just yet. They've always had the better stories. They've given me stories of how the world can be better, of how we can work together to give every single one of us a better life, a more fulfilled life. But they haven't been telling me that story for a long time.
New Labour wasn't based on hope. Oh, they told us it was, they gave us hope, but the whole idea of it was based on fear. The triangulation theory was there because the people at the top were afraid the public wouldn't be with them, wouldn't hope with them. They had been out of power for 18 years, and they were afraid they'd stay there. Fear built them a system that won elections, but didn't win the future.
But now I, at least, think things will have to change. The game-plan they have used for the last three elections doesn't seem to be working now. They can't rely on fear of the Tories anymore. Fear isn't working. Now, perhaps, they will turn to hope.
Even if they don't, I still believe things will change. Because I believe the British people are, like the Americans, starting to turn away from fear. If the Conservatives are to ride that feeling all the way, then they need to talk of hope too. And once one of the major parties has, the other has to join in, or face utter defeat.
And that's a good thing. Because I am tired of seeing non-entities lead us. I am tired of slick debating tactics used to belittle both opponents and members of the public who don't play along. I am tired of people I wouldn't want to work for making laws. I am tired of middle managers as Prime Minister. I am tired of politicians who are so professional.
Because I don't want smooth style and slick efficiency in politics. Because I want to see someone with fire in their belly, passion in their heart, anger in their eyes, and righteousness in their voice. Because I want a politician who has a vision for the future. Because I want to see a politician who wants to change the world, not manage it. Because I want to see a politician that believes.
Because I want to hope again.
Monday 7 July 2008
The big Brown mess we're in - Part 2
So where do we go from here?
Well, there is the question. But first of all, I'm going to bring it down to a very personal question - the one that set me off writing this. Can I bring myself to vote for Labour again at the next general election?
Flashback time: It's just turned May 2005, a few days away from a general election. I'm in my car, which in turn is in the car-park of a further education college in a pretty county town. The car is covered in Labour Party posters, which provide me some shade. I'm here, on a glorious day, because I am driving around the Labour candidate. He's an old friend of mine, and is standing in a seat he has no hope of winning. The sun beats down on the car, which is many miles away from my own constituency. I'm sat in the driver's seat, a pen poised over a postal voting form. I need to get this off today, to make sure my vote will be counted up north.
Imagine, if you will, a pregnant pause.
Tony Blair was fighting to be the first Labour leader to win a third term. There was much anger and vitriol in the country over the Iraq war, and most especially over the death of Dr David Kelly, and the subsequent Hutton Inquiry into the circumstances surrounding it.
The Conservatives, in an insane moment, had chosen Michael Howard as their leader. Michael Howard is regularly satirised (and has been for many years) by Rory Bremner (a prominent political satirist and impressionist) as a vampire, an image which had passed into the popular imagination. I have no idea why they chose someone a large section of the population associated with an evil undead blood-sucking creature of the night to lead them, but that's why I'm not a politician.
The Tories campaign had seemed to some to be bordering on xenophobia, while some Labour posters were accused of being anti-semitic. It was a febrile atmosphere, but many previous Labour voters didn't feel that the Tories or the Lib Dems provided a real alternative. The election was to prove to have a low turnout, despite the massive increase in postal voting, with safe Labour seats seeing sharp drops as Labour voters stayed at home.
Complicating the matter for some, Tony Blair had already announced he would not be fighting a fourth general election. Despite his statement that he intended to, nevertheless, serve a full third term, it was widely expected he will stand down as Prime Minister at least a year before an election, to allow his successor enough time to bed in. The Tories had briefly mulled a poster campaign of "Vote Blair, get Brown", but scrapped it when initial polling showed that encouraged more people to vote Labour.
And so I sat in that car, wondering if I could do it. Could I vote for my current Labour MP again? Even knowing she was a through-and-through Blairite, with nary a single rebellion to her name?
I'd been having serious doubts for a long time. The only reason I was down campaigning for Labour (I'd taken a week off work to do so) was because it was my friend standing. (In fact, other mutual friends who would never usually consider voting Labour also came over to help out.) I had been out pounding the streets, delivering leaflets we had written ourselves, knocking on doors, pressing the flesh. I'm fairly certain that I personally convinced some people to go and vote for us. Sadly, I think the main effect of our campaigning was to convince previous Labour voters not to vote for the Lib Dems, but rather to stay at home - the areas that had been Labour in the past had remarkably quiet polling stations on the day. I also spent a good half hour convincing someone they should vote Labour, and only then did he tell me he was from south Wales, and only visiting.
But maybe all the fine words I was crafting were starting to have an effect on me as well. I'd been telling people to remember how much worse things could be, how bad they had been under the Tories, and, of course, was able to point at Michael Howard, a relic of those times. Many people still didn't trust the Conservatives, and they still didn't look credible as an alternative government.
And so I sat in my car, my pen poised above the ballot paper. I had been intending to simply not vote, using the excuse of not being in the constituency to salve my conscience. But my own rhetoric had been working on me, to an extent. And so I sat there, torn about what to do.
And we can end the flashback there.
So now here we are, back in 2008. Theoretically, Brown could go on until May 2010, though it would be more usual to go to the public in 2009. With a year, possibly two to go, then, what is my answer to the question? Can I bring myself to vote for them again?
For me, this breaks down into two questions. Firstly, can I bring myself not to vote for the party I am a member of? Secondly, if I did manage that, could I vote for anyone else?
The second question is the easiest. No, no I can't. When I look at the other two major parties, I know there is no way I could ever vote for them. I wish I could explain this in rational terms, but the truth is it isn't a rational decision. It is something I don't have a choice over. The mere thought of voting for someone else leaves an icy grip around my heart, a knot deep in the pit of my stomach. It is a purely visceral reaction.
I am a tribal animal. It is a terrible flaw, but there you go. And my tribe is Labour. I am Labour. Always will be. The Liberal Democrats are inconsequential, the Tories beyond the pale. Neither could ever get my vote.
I'm reminded of an interview the BBC did in Nuneaton after the local elections this May. Labour had lost control of the council for the first time since it was created in 1974, to the Conservatives. And worse, the far-right British National Party had gained two seats. The BBC were interviewing a young man who had voted for BNP. He was angry at Labour, angry that he felt he was being ignored, that his community was being forgotten and allowed to die. But of course he couldn't vote Conservative, his dad had been a miner until Thatcher closed all the pits.
You see, there are areas of this country where it is less shameful to vote for a far-right racist party than it is to vote for the Tories. I don't agree with that view, but I can understand it. That's what I mean by being a tribal animal. (Incidentally, there is a question over how bad Labour's popularity must have become to send its supporters to the BNP, but that is another story, and will be told another time.)
Back in 2005, there was a reason to, in the words of Polly Toynbee, "hold your nose and vote Labour". We all knew Blair was going to go, and we all knew that his successor would be Gordon Brown. Back then, that was a cause for hope for many. Even I, who had severe doubts about him, remembered the conference speeches he gave, speeches where he really connected with the rank and file of the party. And so a vote for Blair could be seen as a temporary measure, letting him get the party into power again, before the good times began under someone else.
But today? Here's a quick test - without looking, how many members of the cabinet can you name? It's damn hard. The long saga of Blair and Brown appears to have drained the party of any other stars, anyone else who makes a credible candidate for Prime Minister. I mean, can you see Jack Straw in Number 10? Harriet Harman? Alan Johnson? I suppose Milliband is an outside possibility, but I just don't see it, not in the short term. So, assuming Brown is still the PM at an election, you'd be voting for him, knowing you'd get him. I'm not convinced 'better the devil you know' applies in this case.
Even so, you're voting for a government, not a Prime Minister, so you can't decide all of this on the personality of one man, no matter how much our media these days panders to that presidential notion. At the very least, you need to look at the policies that are being trumpeted.
And here I run up against another problem. The horrible truth is that I don't really believe the Tories would put forward policies radically different from those Labour are pursuing. As I have mentioned before, we are in an age of managerial politics. The small details may change, the style, the presentation may change, but we will just have chosen a different group of managers.
That's not to say the Labour government hasn't pursued policies I've agreed with, quite the opposite. They have increased funding into the NHS - but they have also introduced a massive increase in PFI schemes. They have worked to reduce waiting times - but they have also brought private delivery into the system. They have got rid of the vast majority of hereditary peers - but they didn't go the whole way, and made the upper house even more one of patronage. They introduced a minimum wage - but have kept it at a level below a living wage. Absolute poverty has been cut - but social inequality has risen.
Worse, social mobility has fallen. Some accuse me of class warfare, class envy, what have you. If you live in a society where people can't move from their class, class war is the only method of improving the poor's lot in life...
The problem I have is that it is hard to see how this new style Conservative Party will make significantly different policy decisions. If anything, they can't get away with as much on the NHS as Labour did. It would be politically impossible for them to restore hereditary peers. Getting rid of the minimum wage would be electoral suicide. I'm sure there may be other areas where people will be worse off, but areas where others will be better off.
Now, of course, this is all supposition, because we are a long way away from any manifestos, and the Tories may surprise me, though I doubt it would be a happy surprise. I accept this is all supposition, and based on my own filthy prejudices, but that's all I really have to work with right now.
So, given I know I can't vote for the Lib Dems or Tories, and yet I don't believe there would be a massive change between current Labour policies and those of a future Tory government, does this mean I should abstain?
Some tell me I should never abstain, that people fought and died for my right to vote. Personally, I'm more inclined to believe they fought and died so I had a choice, and one of the options is choosing not to vote. In an electoral system without a 'none of the above' style option, you can spoil your ballot paper or abstain. If you spoil your paper, it gets lumped in with those who still haven't grasped the concept of putting a cross next to one person. At least if you abstain the government gets worried about lower turnout. (Yes, it worries them. Postal voting wasn't expanded as a great democratic aim, it is there to shore up the numbers.)
Which brings us back to 2005. The sun is still beating down on the car, and that pregnant pause you were all imagining has just ended. And yes, I put a cross next to the Labour candidate's name, seal up the form, and post it. But I really didn't know I was going to do that until that very moment. It was a difficult decision for me last time round, and it will be even more difficult for me this time. But will I vote? I genuinely don't know, and I won't know until the moment comes. It may seem like a cop-out answer, but it is also the only truthful answer I can give.
Writing this (admittedly very long-winded) response to the question has, inevitably, depressed me again. I've had as little to do with politics as possible for a long time now. Maybe it was just that my youthful fantasies had been crushed, maybe it was because I had too much else going on. Maybe it's just that politics is still the only subject that can stir me to anger, to bitterness, to passion. Maybe it's just me. Maybe that's why it depresses me.
But maybe, just maybe, the problem is with British politics. And maybe, just maybe, that means we need to do something about it.
Well, there is the question. But first of all, I'm going to bring it down to a very personal question - the one that set me off writing this. Can I bring myself to vote for Labour again at the next general election?
Flashback time: It's just turned May 2005, a few days away from a general election. I'm in my car, which in turn is in the car-park of a further education college in a pretty county town. The car is covered in Labour Party posters, which provide me some shade. I'm here, on a glorious day, because I am driving around the Labour candidate. He's an old friend of mine, and is standing in a seat he has no hope of winning. The sun beats down on the car, which is many miles away from my own constituency. I'm sat in the driver's seat, a pen poised over a postal voting form. I need to get this off today, to make sure my vote will be counted up north.
Imagine, if you will, a pregnant pause.
Tony Blair was fighting to be the first Labour leader to win a third term. There was much anger and vitriol in the country over the Iraq war, and most especially over the death of Dr David Kelly, and the subsequent Hutton Inquiry into the circumstances surrounding it.
The Conservatives, in an insane moment, had chosen Michael Howard as their leader. Michael Howard is regularly satirised (and has been for many years) by Rory Bremner (a prominent political satirist and impressionist) as a vampire, an image which had passed into the popular imagination. I have no idea why they chose someone a large section of the population associated with an evil undead blood-sucking creature of the night to lead them, but that's why I'm not a politician.
The Tories campaign had seemed to some to be bordering on xenophobia, while some Labour posters were accused of being anti-semitic. It was a febrile atmosphere, but many previous Labour voters didn't feel that the Tories or the Lib Dems provided a real alternative. The election was to prove to have a low turnout, despite the massive increase in postal voting, with safe Labour seats seeing sharp drops as Labour voters stayed at home.
Complicating the matter for some, Tony Blair had already announced he would not be fighting a fourth general election. Despite his statement that he intended to, nevertheless, serve a full third term, it was widely expected he will stand down as Prime Minister at least a year before an election, to allow his successor enough time to bed in. The Tories had briefly mulled a poster campaign of "Vote Blair, get Brown", but scrapped it when initial polling showed that encouraged more people to vote Labour.
And so I sat in that car, wondering if I could do it. Could I vote for my current Labour MP again? Even knowing she was a through-and-through Blairite, with nary a single rebellion to her name?
I'd been having serious doubts for a long time. The only reason I was down campaigning for Labour (I'd taken a week off work to do so) was because it was my friend standing. (In fact, other mutual friends who would never usually consider voting Labour also came over to help out.) I had been out pounding the streets, delivering leaflets we had written ourselves, knocking on doors, pressing the flesh. I'm fairly certain that I personally convinced some people to go and vote for us. Sadly, I think the main effect of our campaigning was to convince previous Labour voters not to vote for the Lib Dems, but rather to stay at home - the areas that had been Labour in the past had remarkably quiet polling stations on the day. I also spent a good half hour convincing someone they should vote Labour, and only then did he tell me he was from south Wales, and only visiting.
But maybe all the fine words I was crafting were starting to have an effect on me as well. I'd been telling people to remember how much worse things could be, how bad they had been under the Tories, and, of course, was able to point at Michael Howard, a relic of those times. Many people still didn't trust the Conservatives, and they still didn't look credible as an alternative government.
And so I sat in my car, my pen poised above the ballot paper. I had been intending to simply not vote, using the excuse of not being in the constituency to salve my conscience. But my own rhetoric had been working on me, to an extent. And so I sat there, torn about what to do.
And we can end the flashback there.
So now here we are, back in 2008. Theoretically, Brown could go on until May 2010, though it would be more usual to go to the public in 2009. With a year, possibly two to go, then, what is my answer to the question? Can I bring myself to vote for them again?
For me, this breaks down into two questions. Firstly, can I bring myself not to vote for the party I am a member of? Secondly, if I did manage that, could I vote for anyone else?
The second question is the easiest. No, no I can't. When I look at the other two major parties, I know there is no way I could ever vote for them. I wish I could explain this in rational terms, but the truth is it isn't a rational decision. It is something I don't have a choice over. The mere thought of voting for someone else leaves an icy grip around my heart, a knot deep in the pit of my stomach. It is a purely visceral reaction.
I am a tribal animal. It is a terrible flaw, but there you go. And my tribe is Labour. I am Labour. Always will be. The Liberal Democrats are inconsequential, the Tories beyond the pale. Neither could ever get my vote.
I'm reminded of an interview the BBC did in Nuneaton after the local elections this May. Labour had lost control of the council for the first time since it was created in 1974, to the Conservatives. And worse, the far-right British National Party had gained two seats. The BBC were interviewing a young man who had voted for BNP. He was angry at Labour, angry that he felt he was being ignored, that his community was being forgotten and allowed to die. But of course he couldn't vote Conservative, his dad had been a miner until Thatcher closed all the pits.
You see, there are areas of this country where it is less shameful to vote for a far-right racist party than it is to vote for the Tories. I don't agree with that view, but I can understand it. That's what I mean by being a tribal animal. (Incidentally, there is a question over how bad Labour's popularity must have become to send its supporters to the BNP, but that is another story, and will be told another time.)
Back in 2005, there was a reason to, in the words of Polly Toynbee, "hold your nose and vote Labour". We all knew Blair was going to go, and we all knew that his successor would be Gordon Brown. Back then, that was a cause for hope for many. Even I, who had severe doubts about him, remembered the conference speeches he gave, speeches where he really connected with the rank and file of the party. And so a vote for Blair could be seen as a temporary measure, letting him get the party into power again, before the good times began under someone else.
But today? Here's a quick test - without looking, how many members of the cabinet can you name? It's damn hard. The long saga of Blair and Brown appears to have drained the party of any other stars, anyone else who makes a credible candidate for Prime Minister. I mean, can you see Jack Straw in Number 10? Harriet Harman? Alan Johnson? I suppose Milliband is an outside possibility, but I just don't see it, not in the short term. So, assuming Brown is still the PM at an election, you'd be voting for him, knowing you'd get him. I'm not convinced 'better the devil you know' applies in this case.
Even so, you're voting for a government, not a Prime Minister, so you can't decide all of this on the personality of one man, no matter how much our media these days panders to that presidential notion. At the very least, you need to look at the policies that are being trumpeted.
And here I run up against another problem. The horrible truth is that I don't really believe the Tories would put forward policies radically different from those Labour are pursuing. As I have mentioned before, we are in an age of managerial politics. The small details may change, the style, the presentation may change, but we will just have chosen a different group of managers.
That's not to say the Labour government hasn't pursued policies I've agreed with, quite the opposite. They have increased funding into the NHS - but they have also introduced a massive increase in PFI schemes. They have worked to reduce waiting times - but they have also brought private delivery into the system. They have got rid of the vast majority of hereditary peers - but they didn't go the whole way, and made the upper house even more one of patronage. They introduced a minimum wage - but have kept it at a level below a living wage. Absolute poverty has been cut - but social inequality has risen.
Worse, social mobility has fallen. Some accuse me of class warfare, class envy, what have you. If you live in a society where people can't move from their class, class war is the only method of improving the poor's lot in life...
The problem I have is that it is hard to see how this new style Conservative Party will make significantly different policy decisions. If anything, they can't get away with as much on the NHS as Labour did. It would be politically impossible for them to restore hereditary peers. Getting rid of the minimum wage would be electoral suicide. I'm sure there may be other areas where people will be worse off, but areas where others will be better off.
Now, of course, this is all supposition, because we are a long way away from any manifestos, and the Tories may surprise me, though I doubt it would be a happy surprise. I accept this is all supposition, and based on my own filthy prejudices, but that's all I really have to work with right now.
So, given I know I can't vote for the Lib Dems or Tories, and yet I don't believe there would be a massive change between current Labour policies and those of a future Tory government, does this mean I should abstain?
Some tell me I should never abstain, that people fought and died for my right to vote. Personally, I'm more inclined to believe they fought and died so I had a choice, and one of the options is choosing not to vote. In an electoral system without a 'none of the above' style option, you can spoil your ballot paper or abstain. If you spoil your paper, it gets lumped in with those who still haven't grasped the concept of putting a cross next to one person. At least if you abstain the government gets worried about lower turnout. (Yes, it worries them. Postal voting wasn't expanded as a great democratic aim, it is there to shore up the numbers.)
Which brings us back to 2005. The sun is still beating down on the car, and that pregnant pause you were all imagining has just ended. And yes, I put a cross next to the Labour candidate's name, seal up the form, and post it. But I really didn't know I was going to do that until that very moment. It was a difficult decision for me last time round, and it will be even more difficult for me this time. But will I vote? I genuinely don't know, and I won't know until the moment comes. It may seem like a cop-out answer, but it is also the only truthful answer I can give.
Writing this (admittedly very long-winded) response to the question has, inevitably, depressed me again. I've had as little to do with politics as possible for a long time now. Maybe it was just that my youthful fantasies had been crushed, maybe it was because I had too much else going on. Maybe it's just that politics is still the only subject that can stir me to anger, to bitterness, to passion. Maybe it's just me. Maybe that's why it depresses me.
But maybe, just maybe, the problem is with British politics. And maybe, just maybe, that means we need to do something about it.
Friday 4 July 2008
The big Brown mess we're in - Part 1
This is a personal view of the past year, coloured by emotion. This is from memory, so the timelines may be mixed and confused, and facts may be completely wrong. I don't care. This one is about the visceral side of politics, about my emotional response to all this.
A year ago, I wrote a lament for socialism. Brown had secured the leadership of the Labour Party without an election, and so became Prime Minister. I predicted he would be the same as Blair, only with different presentation skills. Well, I suppose he tried to be the same as Blair, but his lack of presentation skills of any sort scuppered that.
And yet it all started so well, for him, if not the country. We were beset by repeated floodings, the re-emergence of foot and mouth disease and attempted terrorist attacks in London and Glasgow. But Brown seemed to be the right man to keep the ship on course. His response to the floods was seen as good, he cut short his holiday to co-ordinate the response to foot and mouth, and his presence was reassuring following the attempted bombings. Brown was riding high, his popularity enormous, his poll ratings stratospheric.
But... he also managed to alienate the left of the Labour Party, some of whom had been clinging desperately to the hope his premiership would signal a return to 'traditional' Labour values, with one simple act. He received Thatcher at Downing Street, in the full glare of publicity, praising her as a "conviction politician". Now, the visit may very well have been a kindness to the 81 year-old widow, but for Brown, the supposed more left-wing of the Brown-Blair partnership, to welcome her, praise her, appear with her in full publicity was, I believe, a terrible mistake for him. Oh yes, it enabled him to score some short term cheap points against the Conservatives (who were trying to portray themselves as more, well, fluffy than the Thatcher years), but it damaged his relationship with the core of his own party, those who had been hanging on for him for years. It revealed an obsession with student style politics, cheap point scoring, and not the kind of conviction politics he was supposedly praising.
From that point on, it all started to go wrong. The polls were so good that some within the government started to press Brown to hold a snap general election. This was not necessarily a bad idea, but whichever decision was to be made, it had to be made quickly. As it was, Brown dithered, and the inheritance tax issue suddenly exploded.
I'm still amazed that this issue was as big as it was. Inheritance tax is, frankly, a non-issue to the overwhelming majority of voters. 96% of estates are unaffected by it. And yet, somehow, working and middle class voters, who would never have to deal with it, suddenly saw it as a major problem. This 'tax on death' as it was dubbed was used by the Tories was used as an example of 'stealth taxes', of a cunning and devious administration pinching pennies from the public. I even heard one columnist claiming inheritance tax was causing a reduction in first-time house buyers, as they had to pay up on money inherited, rather than buy a house...
This was a chance for Brown to show himself as a conviction politician. Inheritance tax catches only the very largest estates. It helps to stop the accumulation of vast family fortunes, dynastic money and privilege. And yet... he was running scared from Tory attacks. They had, frankly, left him alone over the summer, his honeymoon period. To have attacked him while the country was reeling from various calamities would have seemed churlish. But now the gloves were off, and Brown had to deal with attacks on him for the first time. And he failed the test.
Instead of going out and defending the whole concept of the tax, he crumbled, and got his puppet chancellor to announce a rapid change. The change in itself was minor - a combining of spousal allowances, meaning instead of two allowances of £300,000, there was one of £600,000 - and achieved little - anyone in a position to worry about the tax had already arranged their affairs to achieve the same effect. But the perception was that Brown had finally been 'found out' on a stealth tax, and had backed down. Suddenly the Tories were able to go back to their old mantra of claiming Labour were a high tax, high spend party, and questions on their economic competence were back on the table, where they hadn't been for more than a decade.
In light of this, and the damaging effect on the polls, Brown finally quashed the rumours of a snap election. If he'd quashed the rumours immediately, it wouldn't have been a problem for him. But because he allowed the speculation to drag on for weeks, he was seen to be running from the issue. Personally, I have some sympathy with him on this issue. I take forever to make a decision - and when I do make it, it is almost always the same as I would have made long before. I have issues with making a final decision until I absolutely must - it seems foolish to do so before then. I acknowledge this as a failing in myself, and I recognise the same flaw in Brown. I don't think it means the decisions he makes are wrong, possibly quite the opposite. But unfortunately, these days it is better for a prime minister to make a quick decision, any decision, and stick with it, than it is for him to be seem as 'dithering'. 'Ditherer Brown' was another label the Tories were going to use over and over again in the months to come. Better to be quick and wrong than slow and right.
And, of course, we mustn't forget Northern Rock.
Full disclosure: I've had an account with Northern Rock since the days it was a building society. I think it's got about £50 in it, just as it has for the last decade. I also voted for it to stay a building society. I think there may be one other person out there who voted the same way, but I have yet to find them.
Northern Rock was a strange one. Its business model was perfect while credit was cheap. It even had some contingency for when credit became more expensive. What it didn't have was contingency for when credit became impossible to find. Northern Rock was like a desperate young house-holder, borrowing money on 0% credit cards to pay the mortgage. But when the 0% deals ended, they had nowhere to turn. Like the young house-holder, they had a lender of last resort - not their mum and dad, but the Bank of England. But like gossipy parents, the BoE couldn't keep its mouth shut, and let everyone know what was happening. (To be fair, it is entirely possible it would have fallen foul of EU competition rules if it hadn't.) Whatever the reasons, this loquacity revealed the BoE's complete inability to deal with members of the public. They told everyone that Northern Rock had come to them cap in hand, but that everything was going to be fine. Honest.
The next day, there was a run on Northern Rock.
Queues stretched along streets. News reporters searched desperately for signs of wild and frantic panic, but were met with taciturn northerners. "Why are you panicking?" asked the reporters. "I'm not, I'm being rational. I am removing money to put it somewhere safer." The reporters went elsewhere to search for scenes of chaos. They should have been looking in Whitehall.
Northern Rock was now doomed. Cash being removed from accounts made its reliance on credit more extreme, meaning they needed more help from the BoE, meaning more people felt they had to get their money out. Their shares plummeted to become junk. As a result of their demutualisation, there were hordes of small investors, those given shares when it converted to a bank who had never sold them, never owned any other shares. The meaning of a shareholder economy suddenly became clear to them.
And all the while, the chancellor and BoE dillied and dallied over the right response. After a couple of days, they guaranteed all deposits in the bank, but it was too little too late. Desperate to avoid nationalisation and all the echoes off the 1970s that word brought, the government allowed the bank to limp along, the funds provided by the BoE growing ever greater. Finally, months into the crisis, the government bit the bullet and took the bank into 'temporary public ownership'. None in the government mentioned the n-word.
There were claims the BoE had provided the money to Northern Rock only because it was a big player in the north-east off England, a Labour heartland, that they were protecting their vote at the expense of the rest of the country. The north-east were bemused, both at the idea Northern Rock was that important to them, and at the idea this Labour government would do anything to protect them. They had already lost their belief.
Northern Rock was a victim of the global credit crunch, which, as we all know, is all the fault of the Americans. (The fact no-one was forced to buy these bizarre credit vehicles is handily ignored in that nice view, but never-mind.) It was a victim of a global event, which hammered banks around the globe. Northern Rock's mistake was that it had never really expanded its traditional banking arm, relying on mortgages to increase their profits without bringing in more depositors to help with liquidity. It wasn't a bad plan for many years, but when the perfect storm came, it couldn't weather it.
Regardless of the causes of its failure, it, fairly or not, was used as a symbol of economic mismanagement by the government, by Gordon Brown specifically. He had built his name and reputation by being the Iron Chancellor, on economic competence, on years of quite stunning performance of the UK economy. Now, finally, the opposition had a way of attacking that. They seized on it gleefully, the Tories believing they now had a magic combination - they could accuse Brown of cruel and unfair taxation, and of squandering the money in economic mismanagement. It was like the 1980s all over again.
But it was worse than that. Everyone knew Brown had been desperate to avoid nationalisation. And yet, after months and months, he has been forced to allow it. This portrayed him as both being forced into doing something, and being a ditherer. His reputation, his image, his character seemed to be falling apart more and more every day.
And then came the biggie.
Unlike his other problems, the 10p tax row was something Brown should have seen coming a mile off. He has no-one to blame but himself for this one. It was a taxation policy he created and announced as chancellor. Essentially, there used to be a starting rate of tax of 10% on the first £2,000 above your personal allowance, followed by the basic rate of 22%. In his last budget, Brown reduced the basic rate of income tax to 20%, and completely abolished the 10% tax rate - replacing it with the basic rate. What this meant was that for that first £2,000 above your personal allowance, your tax rate was doubled. Now, the more you earned that was in the basic rate band, the better off you would be - the 2% cut quickly compensated. But, of course, if you didn't earn much, you lost out a lot.
Of course, it wasn't as simple as this, it rarely is. Various tax credits, allowances, and benefits changes meant many people weren't affected at all. But there was a core of people who were badly hit, mainly young single childless people with low incomes. (Incidentally, a group who have very low voting rates, but I am sure this had no input into the calculations.)
In simple terms: some of the poorest people were paying more tax, while the better off were paying less.
If the economy had been doing well, I doubt this would have been the issue it was. But while people were starting to suffer with rapidly rising food and petrol prices, this added tax was too much. Labour MPs, who had presumably not been paying attention when this was announced the previous year, suddenly started screaming for this tax change to be stopped. The government remained firm - you couldn't go changing any of the tax plans on a whim, the whole worked as a package or not at all. It was just too complex to fiddle with.
This was too good an opportunity for the Tories to pass up. They were able to attack a Labour prime minister for taxing the poor to give to the rich. Their audacity was breathtaking. The resonance with the public incredible. And, sadly, the logic was unarguable. It was precisely what a Labour government had done.
This row rumbled on. Ultimately, the government was forced into a climb-down, again. The possible revolt by Labour MPs, who would have voted against the finance bill, had every chance of success, leaving the government in an impossible position. Emergency changes were made, allegedly in response to the changed economic environment. Brown had said nothing would change, and been forced to back down. He was seen as weak, as a ditherer, and as attempting to get away with an unfair tax.
It still amazes me how many people in the government still don't seem to understand what a huge issue this was. They have put in place a package which compensates almost all those who would have lost out, and more. But this one wasn't about the money. This one was about perception. Labour's supporters and voters had forgiven many of the government's excesses. There was anger over wars, over the friendliness to business, their attitude to the US, many, many things. But through it all was a belief that, fundamentally, the party would protect the worst off in society. That, ultimately, they would make things better for them.
That illusion was shattered, and no amount of back-pedalling can bring it back. Some members of the government seem to believe that the changes they made solved the issue, but the real issue was the loss of trust from their most committed voters. Trust takes a long time to build, and can be destroyed in an instant. And once you have lost it, it is almost impossible to get it back.
The cross-section of society that has kept Labour in power lost their trust. The traditional core vote has seen the Labour government attacking them. The 'middle Britain' voters have had it rubbed in their face that they are being bought at the expense of others.
And worst of all, because of a peculiarity of the British character, the whole farrago was exacerbated by one simple fact: the taxation changes were seen as unfair. For a government to be seen as unfair is the kiss of death.
This, to me, was the key point. Before this, Brown could have recovered. Some astute handling of the economy, guiding Britain through the bad times, could have saved him. Being seen to ameliorate the worst of the global problems would have been enough. But after this, he had no chance. The mood of the country changed against Brown, against the Labour government. It's just a matter of time.
The farce of the change to 42 days of detention without trial was just a footnote. By this point, everyone knew that the government would cave and offer inducements to MPs to get them to back it. Deny it as they might, no-one now believes the rebels didn't get paid off in some way. And worse for the government is their own backbenchers now know the leadership will back down, that they can be bullied into giving in. Brown has lost control of his own party - subtly, because the outcome of internecine strife of the Conservatives is still remembered, but he has lost control all the same.
And so we are left with a prime minister who was portrayed as an Iron Chancellor, a man who kept control with a tight grip, a man who would not be swayed, now being perceived as a weak, vacillating leader, who has lost control of his party. What a difference a year makes.
Where do we go from here?
A year ago, I wrote a lament for socialism. Brown had secured the leadership of the Labour Party without an election, and so became Prime Minister. I predicted he would be the same as Blair, only with different presentation skills. Well, I suppose he tried to be the same as Blair, but his lack of presentation skills of any sort scuppered that.
And yet it all started so well, for him, if not the country. We were beset by repeated floodings, the re-emergence of foot and mouth disease and attempted terrorist attacks in London and Glasgow. But Brown seemed to be the right man to keep the ship on course. His response to the floods was seen as good, he cut short his holiday to co-ordinate the response to foot and mouth, and his presence was reassuring following the attempted bombings. Brown was riding high, his popularity enormous, his poll ratings stratospheric.
But... he also managed to alienate the left of the Labour Party, some of whom had been clinging desperately to the hope his premiership would signal a return to 'traditional' Labour values, with one simple act. He received Thatcher at Downing Street, in the full glare of publicity, praising her as a "conviction politician". Now, the visit may very well have been a kindness to the 81 year-old widow, but for Brown, the supposed more left-wing of the Brown-Blair partnership, to welcome her, praise her, appear with her in full publicity was, I believe, a terrible mistake for him. Oh yes, it enabled him to score some short term cheap points against the Conservatives (who were trying to portray themselves as more, well, fluffy than the Thatcher years), but it damaged his relationship with the core of his own party, those who had been hanging on for him for years. It revealed an obsession with student style politics, cheap point scoring, and not the kind of conviction politics he was supposedly praising.
From that point on, it all started to go wrong. The polls were so good that some within the government started to press Brown to hold a snap general election. This was not necessarily a bad idea, but whichever decision was to be made, it had to be made quickly. As it was, Brown dithered, and the inheritance tax issue suddenly exploded.
I'm still amazed that this issue was as big as it was. Inheritance tax is, frankly, a non-issue to the overwhelming majority of voters. 96% of estates are unaffected by it. And yet, somehow, working and middle class voters, who would never have to deal with it, suddenly saw it as a major problem. This 'tax on death' as it was dubbed was used by the Tories was used as an example of 'stealth taxes', of a cunning and devious administration pinching pennies from the public. I even heard one columnist claiming inheritance tax was causing a reduction in first-time house buyers, as they had to pay up on money inherited, rather than buy a house...
This was a chance for Brown to show himself as a conviction politician. Inheritance tax catches only the very largest estates. It helps to stop the accumulation of vast family fortunes, dynastic money and privilege. And yet... he was running scared from Tory attacks. They had, frankly, left him alone over the summer, his honeymoon period. To have attacked him while the country was reeling from various calamities would have seemed churlish. But now the gloves were off, and Brown had to deal with attacks on him for the first time. And he failed the test.
Instead of going out and defending the whole concept of the tax, he crumbled, and got his puppet chancellor to announce a rapid change. The change in itself was minor - a combining of spousal allowances, meaning instead of two allowances of £300,000, there was one of £600,000 - and achieved little - anyone in a position to worry about the tax had already arranged their affairs to achieve the same effect. But the perception was that Brown had finally been 'found out' on a stealth tax, and had backed down. Suddenly the Tories were able to go back to their old mantra of claiming Labour were a high tax, high spend party, and questions on their economic competence were back on the table, where they hadn't been for more than a decade.
In light of this, and the damaging effect on the polls, Brown finally quashed the rumours of a snap election. If he'd quashed the rumours immediately, it wouldn't have been a problem for him. But because he allowed the speculation to drag on for weeks, he was seen to be running from the issue. Personally, I have some sympathy with him on this issue. I take forever to make a decision - and when I do make it, it is almost always the same as I would have made long before. I have issues with making a final decision until I absolutely must - it seems foolish to do so before then. I acknowledge this as a failing in myself, and I recognise the same flaw in Brown. I don't think it means the decisions he makes are wrong, possibly quite the opposite. But unfortunately, these days it is better for a prime minister to make a quick decision, any decision, and stick with it, than it is for him to be seem as 'dithering'. 'Ditherer Brown' was another label the Tories were going to use over and over again in the months to come. Better to be quick and wrong than slow and right.
And, of course, we mustn't forget Northern Rock.
Full disclosure: I've had an account with Northern Rock since the days it was a building society. I think it's got about £50 in it, just as it has for the last decade. I also voted for it to stay a building society. I think there may be one other person out there who voted the same way, but I have yet to find them.
Northern Rock was a strange one. Its business model was perfect while credit was cheap. It even had some contingency for when credit became more expensive. What it didn't have was contingency for when credit became impossible to find. Northern Rock was like a desperate young house-holder, borrowing money on 0% credit cards to pay the mortgage. But when the 0% deals ended, they had nowhere to turn. Like the young house-holder, they had a lender of last resort - not their mum and dad, but the Bank of England. But like gossipy parents, the BoE couldn't keep its mouth shut, and let everyone know what was happening. (To be fair, it is entirely possible it would have fallen foul of EU competition rules if it hadn't.) Whatever the reasons, this loquacity revealed the BoE's complete inability to deal with members of the public. They told everyone that Northern Rock had come to them cap in hand, but that everything was going to be fine. Honest.
The next day, there was a run on Northern Rock.
Queues stretched along streets. News reporters searched desperately for signs of wild and frantic panic, but were met with taciturn northerners. "Why are you panicking?" asked the reporters. "I'm not, I'm being rational. I am removing money to put it somewhere safer." The reporters went elsewhere to search for scenes of chaos. They should have been looking in Whitehall.
Northern Rock was now doomed. Cash being removed from accounts made its reliance on credit more extreme, meaning they needed more help from the BoE, meaning more people felt they had to get their money out. Their shares plummeted to become junk. As a result of their demutualisation, there were hordes of small investors, those given shares when it converted to a bank who had never sold them, never owned any other shares. The meaning of a shareholder economy suddenly became clear to them.
And all the while, the chancellor and BoE dillied and dallied over the right response. After a couple of days, they guaranteed all deposits in the bank, but it was too little too late. Desperate to avoid nationalisation and all the echoes off the 1970s that word brought, the government allowed the bank to limp along, the funds provided by the BoE growing ever greater. Finally, months into the crisis, the government bit the bullet and took the bank into 'temporary public ownership'. None in the government mentioned the n-word.
There were claims the BoE had provided the money to Northern Rock only because it was a big player in the north-east off England, a Labour heartland, that they were protecting their vote at the expense of the rest of the country. The north-east were bemused, both at the idea Northern Rock was that important to them, and at the idea this Labour government would do anything to protect them. They had already lost their belief.
Northern Rock was a victim of the global credit crunch, which, as we all know, is all the fault of the Americans. (The fact no-one was forced to buy these bizarre credit vehicles is handily ignored in that nice view, but never-mind.) It was a victim of a global event, which hammered banks around the globe. Northern Rock's mistake was that it had never really expanded its traditional banking arm, relying on mortgages to increase their profits without bringing in more depositors to help with liquidity. It wasn't a bad plan for many years, but when the perfect storm came, it couldn't weather it.
Regardless of the causes of its failure, it, fairly or not, was used as a symbol of economic mismanagement by the government, by Gordon Brown specifically. He had built his name and reputation by being the Iron Chancellor, on economic competence, on years of quite stunning performance of the UK economy. Now, finally, the opposition had a way of attacking that. They seized on it gleefully, the Tories believing they now had a magic combination - they could accuse Brown of cruel and unfair taxation, and of squandering the money in economic mismanagement. It was like the 1980s all over again.
But it was worse than that. Everyone knew Brown had been desperate to avoid nationalisation. And yet, after months and months, he has been forced to allow it. This portrayed him as both being forced into doing something, and being a ditherer. His reputation, his image, his character seemed to be falling apart more and more every day.
And then came the biggie.
Unlike his other problems, the 10p tax row was something Brown should have seen coming a mile off. He has no-one to blame but himself for this one. It was a taxation policy he created and announced as chancellor. Essentially, there used to be a starting rate of tax of 10% on the first £2,000 above your personal allowance, followed by the basic rate of 22%. In his last budget, Brown reduced the basic rate of income tax to 20%, and completely abolished the 10% tax rate - replacing it with the basic rate. What this meant was that for that first £2,000 above your personal allowance, your tax rate was doubled. Now, the more you earned that was in the basic rate band, the better off you would be - the 2% cut quickly compensated. But, of course, if you didn't earn much, you lost out a lot.
Of course, it wasn't as simple as this, it rarely is. Various tax credits, allowances, and benefits changes meant many people weren't affected at all. But there was a core of people who were badly hit, mainly young single childless people with low incomes. (Incidentally, a group who have very low voting rates, but I am sure this had no input into the calculations.)
In simple terms: some of the poorest people were paying more tax, while the better off were paying less.
If the economy had been doing well, I doubt this would have been the issue it was. But while people were starting to suffer with rapidly rising food and petrol prices, this added tax was too much. Labour MPs, who had presumably not been paying attention when this was announced the previous year, suddenly started screaming for this tax change to be stopped. The government remained firm - you couldn't go changing any of the tax plans on a whim, the whole worked as a package or not at all. It was just too complex to fiddle with.
This was too good an opportunity for the Tories to pass up. They were able to attack a Labour prime minister for taxing the poor to give to the rich. Their audacity was breathtaking. The resonance with the public incredible. And, sadly, the logic was unarguable. It was precisely what a Labour government had done.
This row rumbled on. Ultimately, the government was forced into a climb-down, again. The possible revolt by Labour MPs, who would have voted against the finance bill, had every chance of success, leaving the government in an impossible position. Emergency changes were made, allegedly in response to the changed economic environment. Brown had said nothing would change, and been forced to back down. He was seen as weak, as a ditherer, and as attempting to get away with an unfair tax.
It still amazes me how many people in the government still don't seem to understand what a huge issue this was. They have put in place a package which compensates almost all those who would have lost out, and more. But this one wasn't about the money. This one was about perception. Labour's supporters and voters had forgiven many of the government's excesses. There was anger over wars, over the friendliness to business, their attitude to the US, many, many things. But through it all was a belief that, fundamentally, the party would protect the worst off in society. That, ultimately, they would make things better for them.
That illusion was shattered, and no amount of back-pedalling can bring it back. Some members of the government seem to believe that the changes they made solved the issue, but the real issue was the loss of trust from their most committed voters. Trust takes a long time to build, and can be destroyed in an instant. And once you have lost it, it is almost impossible to get it back.
The cross-section of society that has kept Labour in power lost their trust. The traditional core vote has seen the Labour government attacking them. The 'middle Britain' voters have had it rubbed in their face that they are being bought at the expense of others.
And worst of all, because of a peculiarity of the British character, the whole farrago was exacerbated by one simple fact: the taxation changes were seen as unfair. For a government to be seen as unfair is the kiss of death.
This, to me, was the key point. Before this, Brown could have recovered. Some astute handling of the economy, guiding Britain through the bad times, could have saved him. Being seen to ameliorate the worst of the global problems would have been enough. But after this, he had no chance. The mood of the country changed against Brown, against the Labour government. It's just a matter of time.
The farce of the change to 42 days of detention without trial was just a footnote. By this point, everyone knew that the government would cave and offer inducements to MPs to get them to back it. Deny it as they might, no-one now believes the rebels didn't get paid off in some way. And worse for the government is their own backbenchers now know the leadership will back down, that they can be bullied into giving in. Brown has lost control of his own party - subtly, because the outcome of internecine strife of the Conservatives is still remembered, but he has lost control all the same.
And so we are left with a prime minister who was portrayed as an Iron Chancellor, a man who kept control with a tight grip, a man who would not be swayed, now being perceived as a weak, vacillating leader, who has lost control of his party. What a difference a year makes.
Where do we go from here?
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