The post-conference landscape
Andrew Neil 11:21am
The party conference season is over and we're back to business as usual -- except that in the current financial and economic turmoil, political business is anything but normal.
Last night the US Senate voted for the Bush bailout plan by a large majority, which should keep the markets happy until the House of Representatives considers the matter again. The word from Capitol Hill is that it is likely to go through on a second vote; but nothing is certain in Washington in an election year and if it fails again the global economy will be on the brink of collapse once more.
The French are now proposing a €300 billion rescue fund for Europe's banks and want it considered at a special summit this weekend. This puts some pressure on Gordon Brown, who's not keen on the idea (and never had much time for Europe's finance ministers when he was Chancellor). He's also angry at Ireland's unilateral decision to guarantee ALL its bank deposits, fearing that will put British banks at a competitive disadvantage (though why he doesn't do the same in Britain is a mystery, since in a crisis he'd have to guarantee all deposits anyway).
Westminster will be watching to see if David Cameron won any bounce from his conference speech, which went down pretty well with the Tory-inclined press like the Sun, whose editorial today is headed "He's ready". The Tories are nervous about the Brown bounce after the Labour conference and want their 20-point lead re-established.
The PM's long-trailed cabinet reshuffle is, we're told, likely to happen in the next few days but it's likely to be much ado about nothing, with the big names staying put (bar, of course, resigning transport secretary Ruth Kelly).
But here's the real backdrop to Westminster politics: even if Capitol Hill does back the Bush plan and the financial markets settle down a bit, the real economy is heading for the rocks. This week we learned that manufacturing output declined at the fastest rate since records began; this morning we find that house prices have dropped by over 12% on last year -- and are still plummeting; and now wholesale electricity prices are surging because of supply fears, which will put further pressure on household bills this winter. We look like heading for a far worse downturn than anybody in Westminster is contemplating, especially Mr Brown.
British politics is now going to have to deal with the new austerity: the risk for Mr Brown is that he will be blamed; the risk for Mr Cameron is that people won't think he's up to it; the risk for the Lib Dems Nick Clegg is that he'll be regarded as irrelevant. How all three handle these risks will determine the next election.
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Comments
strapworld
October 2nd, 2008 11:56amBut, Mr Neil, if you believe - in your final paragraph- that the risk is the people won think Cameron is up to it, yet blame Brown and consider Clegg as irrelevant, who the hell do people vote for in your bright new dawn?
I believe that Cameron proved yesterday that he knows what he will be facing and, as you say, the papers generally welcomed it. THAT I belive is the answer. A TORY landslide and the Labour Party obliterated. The real question will be who will be the official opposition?
Mike, Brighton
October 2nd, 2008 12:06pmThe conferences and "bounces" are utterly irrelevant.
The UK and especially the South of England is about to be hit with a severe recession. Lots of articulate, well paid and vocal people are going to lose their jobs, some will lose their homes, house prices are collapsing as everyday bills soar and any remaining job security has disappeared. Willingness to pay high taxes has evaporated.
This will define the political landscape not some ephemeral post-conference polling. The new political landscape will not be convivial for Labour and Mr. Brown who will really struggle to dodge the blame and this struggle will become self-defining.
How many US sub-prime mortgages did Northern Rock hold?
Scott
October 2nd, 2008 12:13pmThe SNP conference is still to come! most recent winner, and most likely winner of Westminster's most recent and up coming by elections
Austin Barry
October 2nd, 2008 1:13pmJust to report that over here in Ireland we're all contorted with anguish and fear, our lunch time Guinnesses trembling, at having incurred Gordon's wrath - an anger which simply masks yet more dithering.
Alex R
October 2nd, 2008 1:32pmGuessing that he doesn't guarantee all deposits at this stage because he needs investors to buy new issuance of UK government debt. As an investor, why would you by UK government debt (yielding 4.5%) rather than put money on deposit at over 6% if the risks were identical?
CS
October 2nd, 2008 1:37pm***The UK and especially the South of England***
Why especially the South, Mike?
CS
October 2nd, 2008 1:39pmAustin, is it the hands holding the Guinnesses that are trembling or is Gordon's wrath so terrible that the drinks themselves are quaking?
Austin Barry
October 2nd, 2008 1:56pmCS, its the drinks themselves. They believe that Gordon's black moods are personal.
TGF UKIP
October 2nd, 2008 10:50pmA couple of points: first of all, Mike and CS, the South is largely irrelevant for the purposes of the discussion because all the polling indicates that outside London in the south there is a massive (mid-upper 30s per cent) lead for the Tories already.
Secondly, and more importantly, though, what the final two paragraphs of this post handed down to us add up to, is that Britain is becoming and will continue to become over the next few years a more impoverished and indebted country which is why it makes no sense for Cameron and Osborne to continue to promise to match Labour overspending right through to 10/11, especially when the polls indicate that voters believe this government is already spending too much.
BTW Mr Neil, if the producer of your Thursday late night extravaganza can't produce for you a proper provincial conservative instead of just two simpering ultra pc liberal metropolitan lefties, I'd get a new producer. You might then get a bigger audience.