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Politics

Fraser Nelson

Wednesday, 3rd September 2008

Fraser Nelson reviews the week in politics

There is something wonderfully Scottish about the way in which Alistair Darling made his move against Gordon Brown. Rather than stage a dramatic ambush in the Commons, as Geoffrey Howe did to Margaret Thatcher, the Chancellor invited a newspaper interviewer to spend two days with him at his family home in the Outer Hebrides. From the safety of his croft, he went on to deliver a series of extraordinary observations which not only reverberated around Westminster, but moved financial markets and changed the political game.

For the record, the Chancellor revealed that he regards the economic conditions facing Britain as ‘arguably the worst they’ve been in 60 years’. (He later corrected himself: he meant 70 years.) The Treasury, he disclosed, was caught utterly unawares by the credit crunch and he learnt about it only from a newspaper he bought in Majorca. He is also being intrigued against. ‘There’s lots of people who’d like to do my job,’ he said. ‘And are no doubt actively trying to do it.’ His job as Chancellor had been ‘a crisis a week’.

The explosive reaction from 10 Downing Street could probably be heard from the Isle of Lewis. Mr Brown’s line that the British economy is ‘resilient’ had been flatly and convincingly contradicted by his Chancellor. Yet what is most intriguing is that this is no personality clash, but an institutional rift. The Treasury is fed up with being ordered to rewrite tax policy by Number 10 every few months. Through Mr Darling, it is fighting back by laying out a few simple but devastating truths.

This week’s chaotic stamp duty move — lifting the starting rate to £175,000 — perfectly encapsulates the rift between Number 10 and the Treasury. ‘If you’re going to announce anything in the housing market, you don’t do it in the middle of August,’ Mr Darling said in his croft. ‘It’s just a silly time to do it.’ So we can imagine how delighted he was to be made to announce the move on 2 September. But at least we know this is not his idea: it is the First Lord of the Treasury ordering yet another tax change in time for Labour party conference rather than waiting, as he should, for the Pre-Budget Report.

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A child of our time

From the economic and psychological bedlam of the global downturn has emerged a particularly dangerous false dichotomy: namely, that there is somehow a choice for ministers over the next few years between economic reconstruction and the repair of Britain’s broken society, and that the government (whether Labour or Conservative) must prioritise the former at the expense of the latter.

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Politics

Fraser Nelson

Fraser Nelson reviews the week in politics

The Spectator's Notes

Charles Moore

‘A money-financed tax cut is essentially equivalent to Milton Friedman’s famous “helicopter drop” of money.’ So said Ben Bernanke, now the chairman of the Fed, in a speech about how to ward off the ‘extremely small’ chance of deflation, which he delivered in 2002.