We’re in full-blown crisis, but obsessed with the wrong one
The media, electronic and print, are in one of their periodic feeding frenzies over the hung parliament and the leisurely horse-trading (very much the right word, alas) over who might form a British government one day. The prime minister, in office but no longer in power, has very sensibly gone home to Scotland, where he’s on his way to the kirk (well, it’s Sunday and he’s a son of the manse). While we’re all feverishly subjecting to intensive textual analysis every casual word confided to Andrew Marr by earnest young Mr Gove , and nodding agreement to the pearls of wisdom emanating from Messrs Marr, Rawnsley and Boulton, the casual UK newspaper reader and television viewer could be forgiven for not noticing that Wall Street and the Eurozone are on fire, sterling and the London stock exchange are in free fall, the key leaders of the rest of Europe are in almost permanent crisis session, and we face the real threat of another global slump on the scale of the banking collapse of 2008. The intricacies of our parliamentary arguments and feeble gropings towards forming a proper government are almost wholly irrelevant to the bush fire raging all around us — except that if we carry on much longer with (in effect) no government, no functioning prime minister, no policy for dealing with the new banking and credit crisis, and no prospect of having any of these rather desirable things quite soon, the nervous nellies on the trading floors will write us off as an obviously impossibly bad risk, perhaps starting tomorrow. They will thereupon sell off our currency for whatever they can get for it, and laugh at the idea of buying our sovereign debt unless we pay them an astronomical premium in interest to bribe them to do so, thus adding yet more billions to the bill for borrowing and the need to borrow even more. The only way to placate them will be to follow in every detail their self-serving orders: no increased taxation except taxes that hit the poorest hardest, swingeing cuts in all public services, instant action to pay back to the bankers the massive debts we were forced to incur in order to rescue them from their own greed and folly, thus strangling any hope of slow steady recovery from the recession; and all this at the expense of the jobs and homes of ordinary working (and retired!) people who bear no responsibility whatever for the mess we’re in.
So while our pygmy politicians squabble at a glacial pace over electoral systems and tax credits, Greece is on fire and the fire is lapping at the gates of Portugal and Spain, then Italy: no guesses at who’s next in line. The Footsie 100 has seen its sharpest fall in five months; EU leaders are “struggling to put together a European multibillion-euro emergency facility to protect the eurozone’s most vulnerable countries before financial markets open on Monday“, with Britain reportedly turning down the pressing invitation to contribute to it; “on Thursday, a cascade of automated trades tumbled through equity markets, knocking 650 points – just over 6 per cent of its value – off the Dow Jones Industrial Average stock index in a matter of minutes. It recovered to end the day only 348 points down – but not before striking terror into the hearts of traders. On Friday, the FTSE 100 lost £35bn in value“, also according to the FT; and much, much more of the same.
Unless you buy the Financial Times, you wouldn’t know about any of this from the front pages or from the television Breaking News straplines. All you’ll discover is that 99.9% of the population (or some such figure plucked from empty air) think that Gordon Brown should resign immediately as prime minister, blithely ignoring the reality that if Brown resigns now, the rest of the government resigns too, there’s currently no-one else who meets the requirements for being invited to form a government, and we’d be sailing our leaky ship towards the rocks without even the half-broken rudder that we have at the moment. Meanwhile 5,000 excited people in peculiar hats assemble in Whitehall waving placards and shouting imprecations at young Mr Nick Clegg if he dares to climb into bed with Dave without first securing a new electoral system. I didn’t hear a single demonstrator yelling at poor Nick “Never mind proportional representation, Nick: that can wait — for God’s sake get on with getting us a government before the markets open on Monday morning, or we’re all toast!”
The elder statesmen gravely admonish their boyish successors to take their time over the negotiations; better to get it right than to get it soon, they say. Other European countries do this all the time, and sometimes take months to reach a conclusion: what’s the hurry? Clegg spends fruitless hours with various permutations of LibDem party leaders and their councils and committees, trying to get their permission to accept something less than 100 per cent of LibDems’ perfect-world demands in order to permit a Cameron government to be formed. Cameron is similarly assailed by the troglodytes of his own party menacingly crying betrayal at any sign of willingness to make a few meaningless concessions to LibDem sensibilities. From time to time Gordon Brown telephones Clegg from his Scottish croft with yet more imaginative bribes dreamt up by Lord Mandelson, and shouts angrily down the line at the hapless LibDem leader when he doesn’t instantly and gratefully swallow the bait. You might think, mightn’t you?, that these great statesmen would be scared out of their wits at the thought of what the almighty markets will do to us if we still haven’t resolved our piddling little problems by Monday morning when the markets wake up and resume their important blackmailing duties. Not a bit of it. Further party meetings are even now being scheduled — for Monday evening. This is indeed the way the UK ends, not with a bang but a LibDem whimper.
While Greek workers riot in the streets in protest at the savage cuts in their living standards and jobs being forced on them by the omnipotent, all-seeing markets and their handmaidens in the Chancelleries of continental Europe, our own middle classes are decorously but equally angrily demonstrating in favour of various forms of proportional representation — a cause which on even the most favourable assumptions is highly unlikely even to be put to a referendum within the next five years, and if it is, might well be rejected by popular vote. Polly Toynbee and Helena Kennedy are nevertheless in a state of uncontainable excitement all over the television screens and the columns of the Guardian at the marginally improved prospect that some time in the parliament after next, we might move to a referendum on an electoral system that would be guaranteed to land us in this kind of chaotic and paralysing mess after every single election, unlike First Past the Post which does it to us approximately once every 20 years.
So we have to pinch ourselves to be reminded that there’s a real, man-sized crisis going on out there in the real world, while we’re all busy examining our constitutional navels. Two centre-right heads of government and/or state, Angela Merkel and Nicolas Sarkozy, our two most powerful EU partners, both of the political right, are vehemently denouncing the irresponsible power of the markets and the credit rating agencies over the policies and actions of sovereign independent countries and their elected governments. Chancellor Merkel calls for the restoration of the primacy of politics over finance. Merkel, Sarkozy, Obama and other leaders in Europe and the US are calling for much more effective international regulation of the banks, to address the present glaringly wide democratic deficit. Here is the overwhelming and most pressing problem of the decade, crying out for remedial measures before the whole structure collapses, and the only response from our doomed, caretaker government is a restatement of its stubborn opposition to any more regulation, speaking from a script composed by a committee of fat cats somewhere in the City. And if ever we finally get around to transferring the tenancy of No. 10 Downing Street to young Mr Cameron, with even younger Mr Clegg trotting obediently along behind him, we may be sure that they will obey the reactionary and regressive commands of the City and the international bankers even more slavishly than New Labour has been doing these last 13 years.
Two postscripts, one exasperated and the other sad:
1. Why do our political and constitutional pundits continue to talk as if the Labour Party would need to elect a new party leader before there could be a new Labour-led alliance of the centre-left parties under a new prime minister such as one of the Milibands or Alan Johnson (or, God help us, Ed Balls)? Gordon Brown could perfectly well continue as leader of the Labour Party but step down as prime minister, provided it was clear before he resigned that Miliband/Johnson/[Balls] was the person demonstrably best placed to form a government that would have the confidence of a majority in the Commons: a feasible but in my view highly improbable scenario. (And why does the Guardian publish a letter from an enthusiastic joker who thinks that Labour plus the LibDems have an overall majority in the House of Commons? Nought out of ten in arithmetic for the joker — and even less for the Guardian letters editor.)
2. The death of Alan Watkins robs us of the best, most elegant, well-informed and wittiest political commentator of our age. He was a delightful and convivial friend and a brilliant writer, whose weekly column in the Independent on Sunday took all the most perceptive people with an interest in politics straight to the IoS website, if not always to the newsagent, every Sunday morning. We should all uncork a bottle of reasonably expensive red this Watkins-less Sunday and drink most of it at a sitting to his memory. (His last column is here.)
Brian
I think you are right. The matter of forming a government is urgent and matters such as electoral reform ought, ideally, to come well down the agenda. The Lib Dems would do well to have their electoral reform demand “noted” but form a deal with the Conservatives NOW. That would show them acting in the interests of the nation. If the Conservatives looked like they were trying to avoid electoral reform then, later this year, it could be raised again as the price for continuing support.
When I look back to the Lib Lab pact of the David Steel/Jim Callaghan period, I cannot see that the Libs got anything out of it and it would be democratically wrong for the Lib Dems to prop up Labour at the present time with or without Gordon Brown as PM.
Having posted the above, I noted that the EU is putting in place a “Stabilisation Mechanism” to deal with the crisis in the Eurozone. This is likely to cost the UK billions – money which, of course, we simply do not have. It would appear that the leading lights in this are France (Sarkozy) and Germany (Merkel) who may well be taking advantage of the political vacuum in the UK.
The UK will be represented by Alistair Darling – who must be a “Dead Chancellor Walking.”
An interesting point is that it is being argued that this deal can be justified under Article 122 of Lisbon. This applies if there are severe difficulties in the supply of certain products, notably in the area of energy. Also, where a member state is in difficulties or seriously threatened with severe difficulties caused by natural disasters or exceptional circumstances beyond its control then fiinancial assistance may be given. It is being argued that this permits them to “bail out” Greece.
Brian writes: Thank you. My understanding, quite possibly erroneous, is that this is primarily a standby facility to be provided by Eurozone governments of which of course Britain is not one, although we are being invited to participate in it as one of the bigger European economies. I can accept that an interim caretaker government is in no position to commit a future and more durable British government to take on a potential commitment like this, especially in the current parlous state of our finances, and maybe even whatever more stable government might emerge from the current shenanigans wouldn’t feel able to accept such a potentially expensive commitment when we have so little money in the kitty — indeed, only a pile of IOUs. But if we could, I have no doubt that as good Europeans we should. The collapse of the Eurozone would be no laughing matter for us or for Europe. However if William Hague is our deeply Eurosceptic foreign & commonwealth secretary some time next week, I doubt if he will spend more than five minutes in deciding to blow a raspberry at the very idea. And incidentally I don’t think that in this serious European and global crisis Chancellor Merkel or President Sarkozy are likely to bother about “taking advantage of the political vacuum in the UK”, as you put it: even if they did, they would both know perfectly well that the vacuum prevents us from accepting the invitation to take part in the new mechanism — the French and Germans can’t use the vacuum to force us into it, so the boot is on the other foot.
Is the UK where even Sky News is talking calmly about coalition talks and telling its viewers that this is a perfectly normal procedure the same place as last week’s pre-election UK, where coalition talks were quite clearly the antechamber to Sodom and Gomorrah? What a change a few days make! Is Britain slowly joining the area of the world where majority rule actually means that one ought to consider having a majority? And the world has actually not yet come to an end? Wonders will never cease!
Kudos to the Tories and the LibDems for keeping their collective mouths shut tightly durng a perfectly normal negotiation process. Sorry Brian, you have not a shred of evidence for your assertion that horse-trading is very much the right word. We are unlikely to have an impartial report the near future in any case, so we shall never know for certain whether the process now taking place is more akin to horse-trading or negotiation. Actually, as I live in a country where a great deal of horse-trading does go on, I can state with some confidence that I see none of the signs of it in the UK at present. None of the statements allowed to slip out “accidentally on purpose” by party minions, whose aim is to sabotage the talks or one’s enemies from one’s own party taking part in them, to apply undue pressure, to position oneself better for the next election and so on. The strict silence tells me that they are negotiating about content, not horse-trading. I don’t like the prospect of a LibDem-Con government, but that is immaterial to that particular point.
As I have watched things progress (if that is right choice of word…) over the weekend, however, I have found myself thinking more and more that, were I a UK resident (and LibDem voter), I would indeed want electoral reform to be prioritised now, more than ever before and over all other considerations.
Why? Because I suspect that at least part of the deflation of the LibDem bubble (no, it did not burst, it just lost some extra air) was due to potential voters ultimately being persuded to return to the same two old sterile folds as in the past, out of sheer fear of the unknown. Nor can I blame them right now: not so much for withdrawing their votes from the LibDems after all, as for experiencing fear as world markets move towards real meltdown (in this I agree with you wholeheartedly, Brian). One does then tend to go for the failures of the past, as the devil one knows may be a devil, but he is more reassuring than the devil one doesn’t know (who may not be a devil after all, but it’s better to be safe than sorry, or so the saying goes). Add in the real fact that the British electoral system is disgracefully and shamefully rigged against real change and we can easily understand why those potential voters retrenched. Ergo, I would move heaven and earth to give them a chance to vote usefully for what they want next time, rather than “have to” hold their noses and vote for whichever they feel to be the lesser of the two evils.
Ah, but, I hear you protest: then the LibDems would be responsible for landing Britain in the greatest financial crisis since 1929. With all due respect, that’s simply not so. Yes, the crisis would be there nd Briatin would be landed in it (and probably will in any case), but it would not be and will not be the LibDems’ fault: they have been in opposition practically since 1929, so it is clear that the fault for the appalling maladministration lies squarely with half a century of LabCon incompetence. However much they may wish to pass the blame to Clegg and the LibDems, it won’t stick (unless Murdoch makes it so… and Murdoch has vested interested in maintaining the Lab-Con duopoly alive and thwarting the LibDems, who must be his worst nightmare).
Yet even if the LibDems end up refusing to support Cameron, all is not lost to “save the Britsh economy”. Indeed, it would not call for an immediate dissolution either. If Labour is so keen on forcing the LibDems, on pain of a hypocritical cry of “treason”, to get into bed with the Tories, it could start practising what it preaches and get into bed with the Tories itself “to save the economy”. After all, it was Labour and the Conservatives who together abolished the necessary regulations and conspired to keep the bankers sitting pretty and above the law, so now they should get together and conspire to solve the mess they got the UK into.
As a result of Realpolitik (plus the amply shared perception that Blair was in any case intentionally more Thatherite than Thatcher herself), there’s been precious little difference between Labour and Tories since about 1990 anyway, so what’s all the bleating about? I suspect that they are both running scared of the very real danger of revealing to their voters that they are all but indistinguishable in practice, so could actually get on very well together. Plus, of course, the fact that if the LibDems were the only major opposition, they would have a field day and romp home with a majority at the next General Election, leaving both Labour and Tories with mud on their faces (and not much else).
The good thing about the deflaton of the LibDem bubble is that Clegg owes no favours to opportunists and can (must) stick to what his 23% of the electorate has wanted all along: to get change moving in the UK, not to sell out by shoring up a bankrupt old system. I hope that he and his advisors will bear that in mind.
Brian writes: Thanks, Pete. As you’ll know, there’s quite a lot in what you say that I agree with, and quite a lot that I don’t. My reasons in both cases have been spelled out at what many will regard as excessive length in recent posts and responses to comments, both here and over at LabourList, so I won’t repeat it all now, except to say that in my view Clegg is in no position to insist on anything in his negotiations/horse-trading with Cameron and his band of thugs: the Tories have got him over a barrel and he has nowhere else to go. He’ll just have to take whatever they’re prepared to give him and gamely vote to keep them in office as long as they periodically need his votes. Once again, as so often in recent grim weeks, I devoutly hope I’m wrong.
Some of us who aren’t committed to any particular political party can’t help wondering if it wouldn’t be in the national interest for the two main parties to agree to some kind of a coalition.
After all, the ideological gap between the Tories and New Labour isn’t much, if at all, greater than that between the Tories and the LibDems.
At least they’d be able to rely on a reasonably decent majority.
And we do actually need some sort of a government.
Obviously difficult compromises would have to be made.
Do they all hate each other too much to try?
The thing that surprised me most about the election was the way the core Labour vote held up – I got that completely wrong.
One consolation: there’s every reason to hope footsie’ll drop even further tomorrow.
I’m in a buying mood.
Brian writes: John, you ask about the Labour and Tory leaderships: “Do they all hate each other too much to try?”
Yes. (And since both parties have reasonably coherent but almost wholly incompatible policies for dealing with the recession and the debt problem, not to mention totally incompatible policies on a host of other matters, it’s hard to see how they could usefully work together. Politics should be about choices, not dodging them.)
(And please let us all know when the bear market is just on the point of turning bullish — if it ever does!)
A Con/Lab arrangement? Possible but extremely unlikely!
Also, interesting to see how the money markets are actually reacting. They appear to have reacted well to the EU deal and do not (YET) seem particularly pannicked by the negotiations over who may be the next government.
I think that you were proved right when you said that Sarkozy and Merkel were not (would not) take advantage of the current political vacuum in the UK. Our potential exposure under this deal seems to be £15bn.
It was also interesting to note that a number of Ministers in the Labour government lost their seats in the Commons but are, for now, continuing with their Ministerial roles. I do not know of any LEGAL objection to that though the normal constitutional convention has to be that a Minister must have a seat in one or other of the Houses of Parliament. As an interim arrangement, I suspect that it is acceptable for them to remain prior to collecting their £65K severance cheques.
A hypothetical question – suppose that it had been Gordon Brown who had lost his seat? Could he then have remained as PM. By the same logic he possibly could!
Our unwritten constitution certainly throws up some interesting questions but I think it would be virtually impossible to write a constitution which covered absolutely every possibility.
Brian writes: There is no constitutional requirement for a minister, even the prime minister, to be a member of either House of parliament, although in normal times — which these are certainly not — there’s a convention that a minister outside parliament should either take urgent steps to secure a seat in the Commons or the Lords, or else resign as soon as a replacement can be arranged. In 1963 the Earl of Home was appointed prime minister (never of course having fought an election as party leader) while a hereditary member of the house of lords. Home realised that it was politically (although not constitutionally) intolerable for a prime minister to head a government from the house of lords, so using the Peerage Act 1963, passed earlier in the same year in response to Tony Benn’s campaign to renounce his peerage, Home disclaimed his Earldom and other peerages on 23 October 1963. For the next two weeks he belonged to neither House of Parliament, while remaining prime minister. At the end of that fortnight “Sir Alec Douglas-Home” won a by-election in the safe Tory seat of Kinross & West Perthshire. In 1964 Patrick Gordon-Walker lost his seat at the general election but nevertheless was appointed Foreign Secretary by Harold Wilson and served as foreign secretary while not a member of either House of parliament until he stood for the apparently safe Labour constituency of Leyton in the Leyton by-election in January 1965– and lost again. He was at that point forced to resign as Foreign Secretary. He finally won Leyton in the 1966 general election. Following this election, he was a member of the Cabinet in 1967-8, as Minister without Portfolio and later as Education Secretary.
Yes, it’d never happen, though I don’t go along with everything you say.
Wouldn’t it just spoil Mr Clegg’s little game?
The bear market became bullish a year or so ago, just after I started to take an interest. There’s been the odd hiccough, but the market’s climbed pretty steadily ever since.
My hopes that Footsie’d drop today were frustrated by its meteoric rise of over 5%.
In the event I bought a minuscule morsel of Royal Dutch Shell.
Dividend yield 6.5%.
Tax-free of course – thanks to good old Gordon and New Labour.
Brian, many thanks. Yes, both Alec Douglas-Home and Patrick Gordon-Walker both stand as precedents for what is undoubtedly the law that neither a Minister nor a PM need be a member of either House of Parliament. Nevertheless, as you indicated, the situation is not tenable for very long in a democracy. Interestingly, there is a research paper which begins by stating the same view and goes on to discuss how Ministers (e.g. Lord Mandelson) who sit in the House of Lords might be made more accountable to the elected House.
http://www.parliament.uk/documents/commons/lib/research/briefings/snpc-05226.pdf