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David Cameron must avoid the trap set by Gordon Brown’s pre-Budget report

When Ernest Bevin was appointed to run Britain’s wartime economy, he saw his chance to fix policy for decades.

30 November 2006

9:06 AM

30 November 2006

9:06 AM

When Ernest Bevin was appointed to run Britain’s wartime economy, he saw his chance to fix policy for decades.

When Ernest Bevin was appointed to run Britain’s wartime economy, he saw his chance to fix policy for decades. ‘They say Gladstone was at the Treasury from 1860 to 1930’, he declared. ‘Well, I will be at the Ministry of Labour from 1940 to 1990.’ Bevin was out in five years, and dead in another six. But Gordon Brown is made of sterner stuff. The Chancellor firmly intends to be at the Treasury — spiritually, if not physically — from 1997 until 2017, and he started legislating with that goal in mind nine years ago.

To commemorate the tenth anniversary of his occupation of the Treasury next year, Mr Brown is planning a spending review which will look at the next ten years. To help him complete his projected 20-year reign at the Treasury he has commissioned various businessmen to produce futuristic reports into what Britain needs. Starting from the pre-Budget report next Wednesday, the Chancellor wants us to think about politics as he does: a seriously long-term game.

On Monday he published a vacuous 140-page guide to government priorities over the next ten years. ‘When you have finished with it, please recycle it,’ pleaded the text on the inside cover: not even the Treasury thought the document would stay on anyone’s shelf. But it is a small sample of much more to come. On the day of the pre-Budget report, Mr Brown intends to publish the Leitch review, looking towards the year 2020 and the skills which the British workforce will have.

Lord Leitch’s interim report, published a year ago, tells us what to expect. He sees a Britain where ‘almost half of adults are not functionally numerate’ and warns that by 2020 ‘at least four million adults will still lack the literacy skills of an 11-year-old’. Aided by a team of Treasury officials, his predictions are stated with the confidence of a Soviet central planner. If £9 billion is spent on a vast adult education programme, the employment level would rise by between 0.75 per cent and 0.95 per cent by 2020. And so it continues.

Next will come Sir Rod Eddington, an Australian who used to run British Airways, who has been asked by the Chancellor ‘to look at transport policy in 2015 and beyond’. His is also a wonderfully ambitious date, calling to mind electronic cars running on underground networks. But Sir Rod’s main task is to make the case for road charging, or ‘demand management’ as he calls it. Like the Leitch review on skills (and the 2004 Wanless review on health), it will give Mr Brown another reason to raise taxes.


But the purpose of these dubious exercises in futurology runs far beyond the need to raise more revenue. First, long-term plans fit comfortably with Mr Brown’s psyche — this is a man whose own career was planned over several decades. Next, like Bevin, he has a weakness for the notion of the planned economy. His instinct is to bring order to what he regards as the chaos of the free market. A theme in his speeches of late has been that the economy, or ‘globalisation’ as he now refers to it, needs to be managed.

But most of all he wishes to persuade us that he is a better manager than David Cameron. The Chancellor is not naive about the coming election — if the public wants charisma and showmanship, he will lose. So to defeat the Conservatives he needs the public to think of the election as a colossal interview for the post of chief executive of UK plc. He must convince us of the problem: an uncertain world economy, with Britain facing many threats. And the solution: an economic heavyweight to guide us through such storms.

He has started talking up the danger. For months now the Chancellor has been describing Chinese graduates as Churchill once spoke from the backbenches about German military production in the 1930s. Listening to the Chancellor, it sounds as if the emerging economies are preparing for an economic war.

‘China and India are turning out four million graduates a year, and Britain just 250,000,’ he told the CBI this week. And ‘let’s face it,’ he added, Britain’s annual output of computer science graduates may have quadrupled to 37,000 but China and India now produce 370,000. Mr Brown talks as if their next step will be to jump in a boat, sail to Dover and invade the British jobs market.

Instead, Chinese and Indian graduates stay at home and generate the kind of wealth which last month led Rolls-Royce to take on another 200 staff at its West Sussex factory to satisfy luxury-car orders from Beijing millionaires. Meanwhile British shop prices fall as low-cost clothes and electronics from India and China come on the market. Frustratingly for the Chancellor’s political narrative — British prosperity is at risk, vote for me — the risks are not as apparent as might suit him at present.

The obvious Conservative response to Mr Brown is that Britain is doing very well out of globalisation, without any political intervention. There is no need for medium-range China–UK export targets or ponderous reviews working out what companies should be doing in 2020. To help Britain prosper from globalisation, the government should stay out of the way. Much as it may pain Mr Brown to admit it, the Tories can and should say that an ingenious, entrepreneurial country like Britain has no need for a Dear Leader.

Implicit in the Chancellor’s long-term reviews is the idea that political change moves at a glacial pace — so, to improve Britain, a 20-year time frame is needed. The same assumption will underpin next week’s pre-Budget report. The added attraction of this analysis is that it is a means of explaining why so little has been achieved in the last ten years: New Labour, Mr Brown claims, has always needed two decades to enact its agenda. To say the least, this provocative premise, which will be the basis of Mr Brown’s political positioning between now and the next election, invites attack.

It is true, as Mr Cameron regularly reminds us, that Mrs Thatcher did not begin implementing her more radical proposals until the mid-1980s. But she did not wait for ever. Her revolution was largely accomplished within six tumultuous years. In 1980 Ronald Reagan inherited a demoralised and inward-looking America: he had fundamentally changed this by the end of his first four-year term. Reform, when properly managed, need not take decades.

Whoever sets the terms of a political debate normally wins it. This is an old rule of American politics which the Chancellor has taken very much to heart. Already the Tories have accepted his basic analysis: that public spending must rise and, more recently, that tackling income inequality, or ‘relative poverty’ as he terms it, should be a goal of the state.

In next week’s pre-Budget report and thereafter, he wants the Conservatives to accept that globalisation is a threat and that ten-year plans are needed to solve it. Then, at the election, he will ask, ‘Which candidate has the best experience to tackle these long-term problems?’ Fought on these terms, the contest would become a battle of the CVs. It is a clever trap which the Chancellor has been planning for a long time. He must now wait to see if the Tories fall into it.


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