Events | 2008.11.25
Jonathan Freedland: In this topsy-turvy political terrain, Dr Brown needs a long-term patient
All is confusion. The political landscape of a world roiled by recession is all but unrecognisable. Voters stagger around like the cast of the now-revived TV drama Survivors, bewildered figures trying to make sense of a political geography where nothing stands where it used to be and nothing is as it was.
In this new topsy-turvy land, Labour earns Conservative disapproval for wanting to cut taxes, probably in next week\'s pre-budget report. For those who grew up understanding tax as perhaps the clearest dividing line between our two main parties - tax-and-spend Labour v tax-slashing Tories - this is truly baffling. What on earth is going on?
Gordon Brown says he is doing no more than following the basic Keynesian principle that the most useful tool for digging your way out of a recession is a chequebook: spending keeps up demand, which keeps the economic blood flowing even if it takes borrowing to do it. But there is as much politics here as economics. Brown knows that this crisis has brought him back from the dead. Yesterday\'s Mori survey showed Labour on 37%, just three points behind the Tories - and enough to make Labour the largest single party at the next election.
Part of it is the cling-to-mother impulse that sees voters sticking with leaders they know during an economic battering. But it\'s also a function of how the prime minister has presented himself since the collapse started in September. Whether knocking HBOS and Lloyds TSB heads together or coming up with a £37bn masterplan to save the banks, Brown has been busy. What\'s more, his plans have been hailed and aped in Europe and the US. The Nobel laureate Paul Krugman calls Brown the man who might just have "saved the world financial system".
But what happens when the immediate mood of crisis passes, and voters ask whether Brown\'s frenetic activity actually made any difference? If the answer is not much, he\'ll be finished. Yet success might not help, either. Voters could decide that Brown had served his purpose and was no longer needed. Think 1945: it was because Winston Churchill had won the war that Britons felt free to boot him out.
So Brown needs it to be 1943 for as long as possible. He needs voters to believe the crisis is ongoing, that we are still in the emergency phase. Ideally, he would go into the next election as Dr Brown, still wearing his white coat, still administering medicine to the patient on life support. He doesn\'t want the patient sitting up, asking if all that treatment did any good. Not yet anyway.
It\'s for this reason that cabinet ministers are once again weighing up the merits of an early general election. They do it hesitantly, knowing the mess they all got into last time. But they can\'t help themselves: there\'s a Brown bounce in the polls that most thought they\'d never live to see and they don\'t want to waste it.
So they dust off their precedents. Some look to the Thatcher landslide of 1983. "The global downturn might be our Falklands," one minister mused to me this week. But the parlour game of choice is 1992, the year a long-serving government under a newish PM defied the polls and won a fourth term, in the teeth of a bad recession. In that period, say Brown allies, the moment of maximum economic and political danger was the autumn of 1990, when Thatcher was toppled. After that, it was all "green shoots of recovery" and the climb back upward.
The optimists believe 2009 could work like that for Labour. Yes, there will be unemployment and repossessions. But the current anxiety will give way to relief among most people that they have, in fact, kept their job and their home. Inflation, interest rates and taxes will all be relatively low. Besides, they will be coming out of a recession that won\'t compare to the horrors of 1990-91, when inflation was in double digits and interest rates in the high teens.
Such are the musings in the Labour high command. They are full of contradictions - if it\'s not as bad as 1992, then maybe voters won\'t feel the need to cling to Brown as they did to Major - and fraught with risk. Chief among these is the abandonment of the very principle that distinguished New Labour: fiscal rectitude. This, after all, was what Brown and Blair were about. They promised to shake off forever the reputation for financial profligacy that had hobbled Labour. There would be no more wild spending. Brown wore a hairshirt as shadow chancellor and stuck to eye-watering Tory spending limits for his first two years in office simply to prove his probity. Now, at a stroke, all that has been discarded.
The Tories yesterday made the same move, in reverse. David Cameron had distinguished himself from his Tory predecessors by promising to stick to Labour\'s spending plans, hoping to demonstrate that the new compassionate Conservatives cared no less than Labour about the public services. He ditched that pledge yesterday, so that both New Labour and the new Conservatism have now lost their defining principles. In this respect, we have returned to the 1980s battelines: big spending Labour v low spending Tories.
The Tory calculus is just as complicated and risky as Labour\'s. Despite the closing poll gap, they have to cling to the belief that when the economy sours, voters - eventually - sour on governments. Similarly, they have clearly concluded that there is no mileage in acting as loyal partner in a spirit of national unity, as Cameron promised during his party conference. Instead, the opposition need to get back to opposing. Hence the stance against next week\'s tax cuts.
That certainly provides clarity after weeks in which the Tories have been all over the place. And it\'s a historic fit for the Tories to present themselves as the party of fiscal responsibility against Labour\'s "reckless borrowing".
But the risks are clear. First, they look like naysayers, shaking their heads and doing nothing while Brown zips from summit to summit saving the world. They do not have a detailed, costed and expert-backed recovery plan of their own. They are just saying no.
Second, they are at odds with not only Labour but most western governments and the IMF, all of whom believe a stimulus, even through unfunded tax cuts, is vital to get the economy working again.
Third, they have pushed Gordon Brown right back into his comfort zone, the place where he most likes fighting elections. Now he can cast the newly prudent Tories as stingy Thatcherites bent on choking schools and hospitals with vicious spending cuts. We\'ll hear Brown\'s greatest hits all over again: investment v cuts, investment v cuts, repeat to fade.
Still, both parties are entering terrain that is almost entirely unfamiliar. The Tories are betting that Brown\'s package won\'t work or, if it does, it will only soften a still-painful blow. Labour are wagering that any cost their borrowing plan incurs will come years from now - and outside the electoral cycle. Labour are working on the assumption that the current crisis is so severe the usual rules don\'t apply. The Tories are hoping that the crisis has been overblown and that things will soon right themselves.
The truth is, neither side knows how this will play out. For right now our politicians are confused - just like the rest of us.
For more information, please visit
http://www.guardian.co.uk/commentisfree/[...]-cameron-taxes-budget-election
