Politics

22 November 2008

Fraser Nelson reviews the week in politics

Three economic tsunamis are speeding their way towards our shores. The first is unemployment. The seasonal bump in hiring unwinds in the new year, and employers will start layoffs they don’t have the heart to announce before Christmas. Next the quarterly heating bills, up 50 per cent on last year, will land on doorsteps. And perhaps most ominously, a secondary banking crisis may be brewing as nationalised British banks are still unable to raise private money. Serious economists are talking about London being ‘Reykjavik on Thames’. This would destroy Mr Brown’s claim to have solved the banking crisis.

With the political pavement strewn with such potential landmines, why would Mr Brown keep walking? Why wait for the bills to land, the banks to implode or the pound to reach parity with the euro? Or, most of all, why wait for the Conservatives to learn how to fight effectively on the economy? George Osborne’s bold decision to warn that Mr Brown’s policies risked a run on the pound stung so badly because the sterling crisis is a powerful metaphor for Britain’s unique weaknesses. One cannot quite blame this on the Americans.

While Mr Brown’s war room at Number 12 is working perfectly, the Tory equivalent is in disarray. Mr Cameron unwisely allowed his chief strategist, Steve Hilton, to work from California for six months, where he still is, firing off nocturnal emails in between fortnightly trips back to a country whose politics are changing almost by the day. Mr Osborne is still in the doghouse, blamed by most Tory MPs for letting Mr Brown get away with economic murder. While no plausible replacement is yet in the frame, the question of his future is widely discussed.

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alastair harris

November 21st, 2008 1:35pm Report this comment

but surely a january 2009 election would be the biggest hypocracy of all? I thought he was supposed to be getting on with saving the planet? How does he square an election with that?

Paul

November 21st, 2008 1:42pm Report this comment

I think Fraser suggested it ; "needing 5 years to fix the problem" (para.). Reality is, of course, anything to cling onto power.

God help us all if this incompetent buffoon gets in again. Can you imagine the wreck he will make of the economy when all his short term kludges come due ?

Dave B

November 21st, 2008 2:13pm Report this comment

Labour can call an election whenever they like, they'll still lose it.

Daniel

November 21st, 2008 5:56pm Report this comment

Osborne's real problem is that he has lost the support of the City, which recognises that the current downturn is much more severe than previous recessions which have generally occurred in a context where the markets have lost confidence in a Government's ability to manage the public finances and control inflation. In these circumstances, orthodox (Thatcherite) economic policy works. But that's not the situation we face here. There are well grounded fears in the markets that some of the world's largest capitalist institutions, such as Citicorp, Ford and General Motors may not survive. It is a crisis of capitalism, not socialism. Against this background, the Tories' insistence that spending cuts are the answer borders on the lunatic. Yes, public finances do need to be saved, but first of all we need to save the economy. The Tories'ideological rejection of Keynesianism in the current crisis shows that their "brand" has, in fact, become contaminated again. Unfortunately Labour seem to be grasping the opportunities this provides in an entirely predictable manner.

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