Wednesday, September 24, 2008

A leadership challenge is the last thing the country needs

It would be a tragedy if the gains of Labour’s three terms of office were wiped out by incompetent stewardship

Labour delegates meet in Manchester in the middle of profound economic turbulence. The crisis engulfing the global financial markets is now moving into the UK's high street building societies and banks. Failures here could trigger a chain of collapses and threaten the wealth of every household in Britain.

The leadership crisis in which Gordon Brown finds himself seems trivial in comparison. Yet the two are intimately intertwined. At the last Labour party conference, the newly appointed Prime Minister, with an 11-point lead in the polls, the job he had always wanted and the confidence of a man sure he could deal with the challenges ahead, faced two important decisions: how to respond to the collapse of a bank, Northern Rock, and whether to seek a mandate for his leadership by going to the country. At conference this year, the same two issues confront him: the economy and leadership, his predicament over each intensified by the choices he made last year.

The economic crisis has proved far more extensive than the problem of a few "sub-prime" mortgages, while Mr Brown's lack of authority in the party is all too apparent.

It is vital to keep in perspective the relative importance of these two crises. Though Mr Brown's short-term future must seem to him, to his cabinet and to his would-be assassins (particularly in the febrile run-up to conference) a matter of life or death, the truth is that, two years hence, no one but political historians will care which disaffected junior ministers resigned, who tried to wield the knife or who loyally defended.

We will all, however, be living with the consequences of how our government negotiated Britain's course through an economic crisis, variously described as the most perilous since the 1890s (which followed rash speculation on precious metals), since 1929 (the so-called Great Crash, which preceded a decade of despair, impoverishment and high unemployment), or since the Oil Shock of the 1970s when the Opec countries raised the price of oil. No one yet knows how extensive and devastating this crisis will prove.

Will working families be under even greater pressures of inflation and increasing unemployment? Are our pensions secure? Can we reduce our dependence on volatile global energy markets? How our government deals with these questions will determine Britain's future for years to come.

So, who takes the reins of government, and what policies they pursue, certainly matter. It would be a tragedy if the gains of Labour's three terms of office (for example, its impact on reducing child poverty, its ambitious schools and hospital building programmes, its steady improvement of pensions for the elderly) were wiped out by incompetent stewardship during this critical period. Yet in the hyperbolic media coverage of Mr Brown's leadership we have seen much vitriol and analysis of the Prime Minister's personality flaws but very little creative policy discussion.

In short, for all the media despair about the leader, there are few new political ideas being discussed, as David Marquand argues on page 32. The ideas coming from groups such as Compass and commentators formerly friendly to Labour are variations on old themes. The wider question of how, following the collapse of the neoliberal model here and in the United States, government should be conducted, with what strategies and to what political end is scarcely debated.

In such a vacuum of new ideas across the political spectrum (the Tories and Lib Dems are virtually policy-free zones), it is hard to see how a Labour leadership contest will achieve anything more than a temporary increase in spite, gossip and factionalising.

The New Statesman has argued here before that the Labour Party should use its energies to force change under Mr Brown rather than try to oust him, for example by introducing strict regulation of the financial sector; by a fairer tax regime and a commitment to fair pay, particularly for public-sector workers (who, while bankers take million-pound bonuses, are asked to curb their claims in order to help control inflation). The worse the economic crisis becomes, the more urgent it is for this government to declare its prime concern to be the protection, not of the banks and City institutions but of the weak, the lower-paid and poor and middle-income families.

This is not only just, it is sensible politics. Alex Brummer suggests on page 18 that the Northern Rock scandal was a decisive turning point in Mr Brown's reputation for competence and, as a result, in new Labour's popularity. It was not, he argues, that Mr Brown ultimately took the wrong decision but that, when he had the chance he failed to act courageously and decisively (as the US political leadership has done since by nationalising Fannie Mae and Freddie Mac and throwing the collapsed bank Lehman Brothers to the wolves). If Mr Brown hopes to convince Labour that he can lead it through the coming uncertain months, he has to heed the lesson that his concern not to upset bankers and business interests loses him support.

One clear impediment to Mr Brown making the kind of policy changes that could begin to turn round his poor poll ratings is that he faces not too many challenges, but too few. Many of the young ministers whose talents he has rightly fostered (such as Ed Balls, Ed Miliband) lack political experience. They do not challenge him. Those who do are on the outside and seen as enemies. The mood emanating from No 10 is of a prime minister under siege. He needs "big beasts" back in cabinet to help counter attacks from the press and to put the arguments for Labour's response to the crisis. In the words he himself used when he took office, the Prime Minister needs "a government of all the talents".

But first Mr Brown has to survive Manchester. Those who think this a suitable moment to switch leaders can fairly be accused of a selfish disregard of reality. A leadership fight is the last thing the party or the country needs at this time of emergency.

source: A leadership challenge is the last thing the country needs New Statesman