Saturday, January 10, 2009

Jobs crisis threatens Brown's "New Deal"

Today's Journal column is the last to be illustrated n its print version by cartoonist Geoff Laws who is leaving the paper. He provided a great illustration of Gordon Brown injecting the arm of a stricken hospital patient while all the blood drained out of the other side. You'll have to buy the paper to see it, but if you read the column below you'll get the meaning.

Enjoy life outside newspapers Geoff - and don't stop eating the seared scallops.



First this week, some words of thanks. For all of the 12 years of this column’s existence, its words have been brilliantly illuminated by Geoff Laws’ wonderful cartoons.

They say a picture is worth a thousand words, and since that is the average length of the column, the old adage was never more apt than in the case of the long-running Linford – Laws partnership.

Geoff is now leaving the staff of The Journal– although he will still be contributing regular restaurant reviews to the paper – so today’s illustration will be his last.

I’m sure regular readers of the column will join me in thanking him for brightening up our Saturday mornings for so many years, and wishing him all the very best for the future.

And so without further ado to the politics. In my preview of 2009 last week, I ventured the possibility that the next 12 months may be rather difficult ones for Gordon Brown as the state of the economy worsens.

Well, nothing I have seen in the first full week of the New Year has done anything to dissuade me from that view.

Sure, the Prime Minister has come out fighting, as by now we would expect him to, with a whistlestop regional tour and a package of public works designed to create 100,000 new jobs.

But out there in the “real economy,” companies continue to go to the wall and jobs continue to go – not least in this region which on Thursday saw the loss of 1,200 posts at Nissan in Sunderland.

For the North-East, this is about as bad as it gets, short of the closure of the entire Nissan operation in Sunderland as was feared at various points in the late 1990s.

The car plant has long been emblematic of the “rebirth” of the region as a manufacturing centre after the painful demise of its coal and steel industries in the 1980s.

Its current plight illustrates the difficulties Mr Brown is facing not just in trying to mitigate the worst effects of the recession, but also in convincing the public that he is succeeding.

While he is desperately trying to give the economy a shot in the arm with his public sector job plans, the lifeblood continues to drain out of it in the shape of private sector job cuts.

The Prime Minister does, at least, have a clear strategy – to create and preserve British jobs amid predictions that in 12 months’ time one in 10 of us will be unemployed.

“I want to show how we will be able, though public investments and public works, to create probably 100,000 additional jobs over the next period of time in our capital investment programme – schools, hospitals, environmental work, transport,” he said last weekend.

Mr Brown even went so far as to suggest that combating the recession could be combined with the grand purpose of re-equipping Britain for the digital age.

“When we talk about the roads and the bridges and the railways that were built in previous time – and those were anti-recession measures – you could talk about the digital infrastructure at a period when we want to stimulate the economy,” he added.

It’s hardly surprising to hear Mr Brown talk like this. In a sense, he’s now in his political comfort zone.

If people sometimes think Mr Brown seems to be revelling in the economic downturn, it’s perhaps because it has opened the way to the kind of New Deal politics he has always believed in.

He’s been compared in much of the media this week to Franklin D. Roosevelt, who built America out of the Great Depression in the 1930s, although I seem to recall making that comparison myself a while back on these pages.

With President-elect Barack Obama being spoken of in similar terms, he is no doubt hoping that some of those comparisons – and some of that stardust – will rub off.

But while Mr Brown has certainly hit the ground running at the start of the New Year, the other two parties have not let been letting him have things all his own way.

David Cameron has launched a further bid to detoxify the Tory brand by talking about the need for “ethical capitalism,” a fresh twist on the old Blairite saw about economic efficiency and social justice going hand in hand.

It’s a brave, if somewhat belated attempt to tackle the perception of the Tories as the “do nothing” party, content to let laissez-faire economics and the recession run their inevitable course.

Meanwhile Lib Dem leader Nick Clegg decided to have a reshuffle, although it is unclear what, if anything, was achieved by this.

But to conclude this week, here’s a few further thoughts about Nissan together with a bit of a history lesson.

I alluded earlier to the fact that, in the late 1990s, there was a question mark over the entire future of the Nissan plant, but the issue back then wasn’t the state of the UK car industry – far from it.

No, it was the almost evangelical belief on the part of the plant’s Japanese owners that Britain – and more importantly, their own business - would be better off in the euro-zone where most of its markets were based.

The then Prime Minister, Tony Blair, was known to be worried that contracts to build new models would go to Nissan’s European plants unless ministers made more positive noises about the euro.

Interestingly, it is not an argument that has been made this time around – but let’s just suppose that it were to be.

What would Gordon Brown do if a major British employer were to go to him and threaten to move tens of thousands of jobs to Europe unless Britain joined the single currency?

We saw in 2008 the impact that changes in economic circumstances can have, when the credit crunch turned the once-derided Bennite policy of bank nationalisation into the political flavour of the month.

The baleful prospect of a million UK job losses in the next 12 months could similarly turn the current conventional political wisdom on its head.

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Friday, January 09, 2009

Thursday, January 08, 2009

Credit crunch Britain

Throwaway line spotted in Manchester Evening News report on Ronaldo's car smash earlier today:
It has been estimated Ronaldo has spent around £2m on cars since joining United five years ago.

Sadly, such largesse was not quite enough to save the 1,200 workers at Nissan who have lost their jobs today.

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Wednesday, January 07, 2009

Brown spooked by curse of Clough

Nine times out of ten whenever a Prime Minister pays a flying visit to a provincial city to talk about safeguarding thousands of jobs he would expect to make the front page of its local evening newspaper. Unfortunately for Gordon Brown, his arrival in Derby today coincided with the news that Nigel Clough is to follow in Old Big 'Ead's illustrious footsteps as boss of the Rams. No real contest for the Derby Evening Telegraph's splash in this footie-mad city.

It would never have happened back in the days of Alastair Campbell's famous "Grid" of course. He'd doubtless have been on the phone to the club telling them to delay their announcement of a new manager for 24 hours.

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Monday, January 05, 2009

Clegg in the spotlight

In my Preview of the Year at the previous post I briefly alluded to the fact that Nick Clegg is likely to become the most sought-after man in politics in 2009 as thr two main parties seek to insure themselves against the possibility of a hung Parliament at the next general election.

But Peter Oborne in today's Daily Mail goes much further. He says Brown won't wait until after the election to put together a Lib-Lab coalition, but will actually try to stitch one together this year, with Vince Cable as Chancellor, Lord Pantsdown as Defence Sec and Sir Menzies Campbell eased into the Speakership.

I can't really see the political advantage for Mr Clegg in being seen to prop up what many floating voters still view as a failed and discredited regime despite Mr Brown's recent recovery in the polls, but the prospect of ministerial jags and bums on seats round the Cabinet table no doubt does strange things to some people.

One person who might have a wry smile on his face though is Tony Blair. He planned from the start to bring Lib Dems into the government as part of his grand project to reunite the liberal-left and keep the Tories out of power for 100 years, but was prevented from doing so by an unholy of alliance of Jack Straw, John Prescott and, you've guessed it, Gordon Brown.

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Saturday, January 03, 2009

Will Gordon survive 2009?

Could Gordon Brown yet stand down before the next election? It's possible. Here's my "Preview of the Year" column from today's Journal.



Chelsea will regain the Premiership title, the Man Booker Prize will be won by a book about India, Kate Winslet will win an Oscar, King Kev will not return to St James’ Park, and it will snow in April.

Next to UK politics, sport, award ceremonies and the British weather are relatively easy things to predict these days.

But what will the next 12 months hold for Messrs Brown, Cameron, Clegg and Co after a year in which expecting the unexpected became the only real political certainty?

Will 2009 be equally unpredictable – or will we see politics start to return to something approaching “normality?” Well, here are four consequential predictions for how I think the political year could pan out.

Firstly, the recession will deepen in the first half of the year, with soaring levels of unemployment, house repossessions and the number of firms going bust.

Secondly, the political standing of Gordon Brown and Labour, having recovered over the course of 2008, will again start to deteriorate.

Thirdly, the soul-searching will begin again as to whether Mr Brown should lead Labour into the next General Election and whether it would not be better if he stood down with dignity before then.

Fourthly, the outcome of this renewed bout of internal Labour navel-gazing will depend utterly on whether there is any evidence of recovery by the end of the year which could give the party a fighting chance in a 2010 election.

Of these four assertions, the most contentious is probably the second one.

That the recession is going to get worse is something which almost all economists agree upon. However not all political commentators agree that this will necessarily lead to a deterioration in the government’s political position

To suggest that it will do represents a departure from the 2008 “media narrative” of Gordon Brown as the “comeback kid,” defying the normal laws of political gravity by appearing to thrive on economic bad news.

But a new year often heralds a reappraisal, and to my mind, the sheer glut of economic bad news on the way suggests it will be hard for Labour’s recovery to be maintained.

No doubt some readers will already be wondering why I think the economy will cause the political tide to turn against Mr Brown in 2009 when it manifestly failed to do so in 2008.

Well, I think what it boils down to is the impact of what some have termed “the real economy” on voting intentions.

The 2008 crisis was effectively about banks refusing to lend to eachother and credit drying up, and Mr Brown was generally applauded for the way in which he tried to tackle this.

This year, though, the outworkings of the downturn will be much more immediately and keenly felt in peoples’ lives, and the level of anger directed at the government will increase as a result.

There is also the point that support for Mr Brown to tackle the economic crisis may still not translate into real votes for Labour when it comes to placing crosses on ballot papers.

As I wrote last year, the prevailing public mood towards him may very well be a case of: “We want you to stay to sort out this mess – and then we want you to go.”

It follows from my predictions that I don’t think Mr Brown is going to give the voters the chance to kick him out any time in 2009.

Indeed, if Mr Brown had been considering a 2009 election as an option, I think the decision will be very soon taken out of his hands by the wave of redundancies and bankruptcies in the offing.

There are, at least, some European elections coming up in June, and these are likely to be dire for the Prime Minister.

A combination of protest voting over the economy coupled with residual anger among some voters over the refusal to allow a referendum on the European constitution could prove a lethal cocktail for Labour.

It will add fuel to the new media narrative that Mr Brown and Labour are on the way down again and that the “Second Brown Bounce” has finally come to an end.

It is likely to herald a second successive summer of Labour leadership plotting, although whether South Shields MP David Miliband will dip his toes into the water again after last year’s abortive coup remains to be seen.

To retain the confidence of his party Mr Brown will need some economic good news as he goes into the autumn conference season – some demonstrable sign that he has started to turn things around again.

But what if the light at the end of the tunnel fails to appear? What if by that stage it has become clear that Labour is heading for a defeat as cataclysmic as 1997 was for the Tories?

Well, I have felt in my bones for some time that if Mr Brown reaches the point where he concludes Labour cannot win with him as leader, he will stand aside.

Everything in his character points to it – most notably his intense risk-aversion in relation to his own career coupled with his intense loyalty to the party.

The other two main party leaders seem safe for the time being. David Cameron may have failed to establish himself as a Prime Minister in waiting, but the polls are still running in his favour and his party will give him at least one shot at glory.

And Lib Dem leader Nick Clegg will become an increasingly significant figure as the two big parties court his support in the event of a hung Parliament.

But as for Mr Brown….I think it is at least possible that by this time next year he will have announced he is not contesting the election, and that Labour will fight under a new leader to be elected early in 2010.

As ever, it will all come down to “the economy, stupid.”

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