Sunday 28 September 2008

Labour have learned from Northern Rock

Labour have learned from the Northern Rock crisis: just witness the relative alacrity with which the government are taking Bradford & Bingley into public ownership, compared to the protracted and tortuous scramble for a private buyer for the Rock last year. Perhaps they have been imbued with some of the curious interventionist confidence of Hank Paulson and the Bush administration. It's a dire situation, of course, but it's good to see that no longer does a fear of "back-to-the-70s" jibes from the right stop Labour from taking necessary steps to stabilise the economy.

And though it's hopelessly naive to see the post-conference "bounce" as indicating any certain trend back to Labour, rather than predictable voter capriciousness, the party should be heartened by the fact that voters now prefer (albeit very marginally) Brown and Darling on the economy over Cameron and Osborne. The Conservatives start their conference today planning to convince voters they can manage the economy - but look increasingly out of step with these strange new economic times. Vince Cable - that wellspring of economic literacy and common sense - said Osborne was "not living in the real world" in trying to keep B&B in the private sector. Osborne's concentration on "reckless" public debt looks particularly peculiar given that, at 43% of GDP, UK public debt is a lot less than many comparable countries, and will surely have to rise in this situation, as Yvetter Cooper argued yesterday.

So there is some clear blue water between Labour and the Conservatives. And between Labour and the Lib Dems, too - Vince Cable notwithstanding. "Move to the right" was always a crude way of saying what the Lib Dems are doing, but in a sense it is correct. Cutting tax for low earners is good, as is restoring the parity between capital gains and income tax. But their tax cuts do aim at shrinking the amount the state takes in taxes, and that is a move to the right. Moreover, and more subtly, the Lib Dems are being pulled along by this Cameron-Conservative narrative which says that Brown's "top-down" "centralised" "bureaucratic" (etc., etc...) method has juddered to a halt, and that further attempts down this route would just be an exercise in idly "throwing money" at things which are inevitably more complex than crude, simple money can get a hold on. (See Vince's speech to conference, and Norman Lamb's, for some good old-fashioned public bureaucracy bashing.)

Labour should see that they have something worth defending, and worth advancing, in the face of the other parties. On the face of it, Labour look like the right party for the job. Now is no time to worry about the political costs of, say, nationalising a bank - the political costs of being perceived as "ditherering" are far dearer. Voters will reward those who act with conviction and certainty.

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