It’s strange hearing US pundits solemnly explain that the banking turmoil of the last month was always going to hurt the incumbent government, because it hasn’t hurt Brown. Yet the UK and the US both went through the same reign of error: profligate spending, huge deficits, a housing bubble created by underpriced debt. The Bush-Brown economic policy has led both countries into a painful recession, but leaders do not self-destruct. It takes an Opposition politician to hold them to account. Since Lehman’s collapse, which put the economy at the centre of politics, Obama has succeeded – brilliantly. The Tories have so far failed, abjectly.
Obama had both a critique, and a powerful alternative plan in his “tax cut” message. It became his answer for everything. When McCain wheeled out Joe the Plumber, Obama replied “Joe’s cool. I got no problem with Joe. All I want to do is give Joe a tax cut.” Now before I’m accused of being a tax-cutting punk fundamentalist, my point is that Obama made himself relevant in this economic crisis and offered voters not just warm words but a quantifiable, bankable promise. That’s how to win over undecided voters. As I say in my column for tomorrow’s magazine, Obama brilliantly stole the tax cut issue from the Republicans, just as George W Bush stole education and Clinton stole welfare reform. The Tories should not think this issue has been reserved for their exclusive use. It has been painful, and deeply frustrating, to watch Brown get away with so much as the Tories seemed as lost for words in the financial crisis as McCain was.
Yet a Tory fightback may finally be at hand. Cameron at PMQs today had fresh attack lines whereas Brown’s rebuttals were stale. He snared Brown a few times, persuading him to use the “novice” attack line again – which has lost some of its potency given what’s just happened in USA. He had Brown claim, again utterly implausibly, that Britain is “better prepared” for the slowdown. As it becomes clear that we have the worst banking crisis outside Iceland and the worst recession outside the former Soviet bloc, this will sound more and more absurd.
When Brown trumpeted his achievements, he actually listed low interest rates. Hasn’t he grasped yet that this was what got us into this mess – debt was too cheap for too long, leading to a massively over-leveraged Britain? This is why Brown is so vulnerable. “Ten years of stability,” he said: doesn’t he realise, as Amercians do, this was a debt-fuelled mirage? Cameron asked him to confirm that household debt was the highest in the G7 – this is one of the smoking gun issues. Brown ducked it, and resorted to quoting old IMF figures claiming debt is 38% in Britain (the UK has only one official national debt metric, it’s prepared by the ONS who say 44%). “You’ve got to look at personal and public debt together,” said Brown – again, leaving himself horribly exposed. Because countries like Italy which have higher state debt than Britain have household debt at less than half UK levels. This mixture of high state and high personal debt is what leaves Britain so exposed. Cameron is leading Brown into precisely the territory where he’s most vulnerable.
Cameron didn’t quite nail Brown on any of these points, but he will be able to in future. He should go after Brown like Kenneth Starr went after Clinton. Brown designed the banking regulatory system that failed this county with such catastrophic consequences, but he was Chancellor for ten years bulking up the UK economy with the dynamite of unexploded debt. When he blames America for lighting the fuse, the Tories should blame him for providing the dynamite. There are plenty of attack lines out there, and the Tories have plenty time to link the recession to Brown’s policies.
Cameron’s greatest strength is ability to learn, to change, to wash his hands of old mistakes and adopt new tactics. He and Osborne have been dismal in the last month, and I suspect they are level-headed enough to know it. The questions asked today show they are finally sniffing out the right issues. Obama chose his own metrics and his own language, and was never pulled onto McCain’s territory. The Tories should do the same. They should seize social justice from Labour, defend their tax-cutting flank (in a way McCain failed to) and use their own words. No more talk about “investment” rather than spending. Much more talk about sharking underpriced debt to British households. More talk about Labour, once again, “running out of other people’s money” (as The Lady put it in Oct75). If the Tories learn the right lessons from Obama’s formidable campaign, and get a bit of intellectual self-confidence back, Brown may finally be held to account for his what he did these past 11 years. Both the US and UK economies have been damaged by out-of-control spending, huge deficits and housing bubbles. The Bush-Brown economic policy has have been busted on the other side of the pond. Now it’s Cameron’s turn.
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