Thursday, April 23, 2009

Reading the Last Rites for New Labour

In a way it is tempting to discount the significance of the British Budget. The fantasy economic forecasts and unconvincing explanations that were offered yesterday are just not going to be relevant. Deep in our bones we know that the situation is not a shallow recession followed by an early recovery. The collapse of the financial system has taken away entirely a significant percentage of UK wealth creating capacity. Everything afterwards is set to be slower and smaller.

Perhaps it is appropriate that the rather sepulchral figure of Alistair Darling should have read the last rites over the coffin of new Labour- there is no doubt now that the Labour Party has comprehensively fallen into a massive trap. Abandoning any pretence to support middle class aspiration by imposing an absurd 50% marginal rate will not raise the money the Chancellor has said it will. It will, however, mark the beginning of an exodus of investment capital from London. The various funds that congregate in Mayfair and St James will now leave. Small numbers of institutions, but controlling a lot of money. In the face of the most serious economic crisis we have seen in a generation, the Chancellor has chosen to make one of the most political budgets. He response to the economic situation is to close his eyes, block his ears and simply deny what is actually happening. Instead of accepting the real position, the Chancellor is hiding behind absurd economic forecasts and the return of a policy of class antagonism.

It is, I think, not merely the end of New Labour, but the end of Labour.

Meanwhile what must we make of the Opposition?

I am extremely concerned about what David Cameron was signalling in his own, rather flimsy, contribution to the debate. Mr. Darling left him with an open goal, but Mr. Cameron did not have the political courage to offer us more than mere flim-flam. Where is the leadership in such cowardice? There is now every chance that he can lead a government, whether alone or on coalition, but he gives no sign of offering even the framework of ideas that would drive future Conservative policy. This is not the leadership of Margaret Thatcher, but the trimming of Edward Heath- a return to nuance perhaps, but a failure to articulate core values and principles would quickly drive an inexperienced government onto the rocks. Civil servants will fail to deliver "joined-up government" if they do not understand even the guiding principles that the administration should be following.

As Vince Cable and Nick Clegg articulate a clear economic policy framework, I don't think it is too much to ask the Conservatives to do the same. On the other hand in any future Conservative-Liberal Democrat coalition it would mean that the Liberal Democrats would be taking the lead, so perhaps Mr. Cameron is merely preparing for a coalition, though I suspect not. It is a massive failure of the Conservative political imagination not to be pressing home what the practical differences between a Cameron and a Brown vision actually are.

Meanwhile the Liberal Democrats are slowly emerging as a credible force in the polls. As the curtain comes down on the last twelve years of New Labour, we face a whole new political world. If Clegg and Cable can continue to articulate their coherent Liberal vision, it may even be that they, rather than the ineffectual Conservatives can end up as the prime beneficiaries.

In the next twelve months there is more to play for in the British political world than at any time since the early 1980s. That -in the end- could be the true significance of this disastrous budget.


Newmania said...

Yes and no ..I do think the Labour Party are facing a much larger problem than is yet apparent ,on the other hand the clarity of the Lib dems is not something I recognise myself

13th Spitfire said...

"It is, I think, not merely the end of New Labour, but the end of Labour."

But surely this was said about the Tories when Thatcher left as well and even more so when they got raped in 1997. "It is the end of Conservatism" - as much as we would like a thoroughly reformed main party it never seems to happen. Very annoying.

Cicero said...

Yes, 13th Spitfire, but the fundamental idea of the Labour Party- its core values- were out of date and abandoned by the New Labour Project in their drive for power. Socialism is intellectually stone dead. It will be so much harder for Labour to recover.

In the end the Conservatives were able to make a fightback based on "traditional Tory toffs", who never left the party.

As bad as the 1997 election appeared, especially in certain parts of the country, the core vote remained and the shires were a sufficient cushion to ensure survival.

The destruction of Socialism as a coherrent force left a vacuum- and one that even the New Labour project struggled to fill.

Now the Labour Party faces an existential crisis.