No credible alternative

The Conservatives were supposed to be preparing for power in Birmingham. They were scuppered by even

Smug is the default facial expression for the shadow chancellor. So it was clearly with some difficulty that George Osborne stifled his habitual self-satisfied grin during his conference speech this year. He knew he had another rabbit to pull out of the hat in the form of a two-year freeze on council tax (and what an ingenious piece of populist trickery it was). It didn't quite compare with the inheritance tax coup of last year, but Osborne had good reason to feel pleased with himself.

His aides had instructed him to adopt the most serious face he could muster. "The trouble is that he looked like he was trying not to burp," said one former Tory official now able to speak freely in the bar of the Birmingham Hyatt. The shadow chancellor has created a category of arrogance all his own. It takes an awesome patrician cheek to suggest that only the Tories can be trusted to check the excesses of the masters of the capitalist universe. This is a "sell" to the British people no more credible than Labour's message that only Gordon Brown can be trusted with the economy.

Some analysts have wondered how it can be that the Mayor of London, Boris Johnson, can mount an impassioned defence of bankers and warn against "neo-socialist whingeing" about City bonuses and house prices, when his own party's leadership appears to be adopting just such language. The answer is simple: Boris Johnson has his mandate al- ready and does not need to pretend. George Osborne and David Cameron still need to prove their credentials on the centre ground.

The British public thus finds itself in the most appalling bind: faced with two political prospects that are almost equally unappealing. On the one hand we see a party of government eaten up by its ideological contradictions and sectarian obsessions, which has been thrown back on the financial crisis as its only hope of salvation. On the other, we are faced with an opposition party funded by the very individuals in the City whose amoral speculation brought us to this pretty pass in the first place.

Not since the two general elections of 1974, when the alternatives were a battered and ineffectual Ted Heath and an increasingly tired and paranoid Harold Wilson, has the choice seemed so bleak.

Labour's partial recovery in the polls demonstrates what has long been suspected: that Cameron's Conservatives have yet to "seal the deal" with the British electorate. Yet the wild swings we have witnessed over the past weeks do not suggest a new-found passion for Labour. Rather, the volatility of public opinion suggests a deep uncertainty about the political class as a whole. We simply do not know whom to trust from one week to the next.

In the trench warfare that passes for Labour politics these days, Gordon Brown and his generals have spent the conference season pounding another set of rivals into the dirt. As David Miliband has been forced to beat a retreat, just like Charles Clarke, John Reid and Tony Blair before him, the landscape looks rather like a Paul Nash painting from the Great War. The day is won, but right across the horizon, all that remains is waterlogged craters, twisted barbed wire and mangled tree stumps. It may take years to recover from the victory.

John Prescott's and Alastair Campbell's "Go Fourth" campaign was the one grass-roots success of the Manchester conference, but there is growing concern in the parliamentary party about what a fourth term under Brown might mean, even assuming it is a realistic possibility. David Miliband's campaign for the leadership has stalled for the time being. But Labour activists ought to accept that their future will have to look something like Miliband, even if it does not take the form of the Foreign Secretary himself. Whoever leads the party after Gordon Brown, it will have to be someone who can pull together a new election-winning coalition, or the party will be condemned to perpetual opposition.

The Conservative party conference showed what has been obvious for some time: Cameron has successfully decontaminated his brand and inspired the party faithful with the belief that they could win. This was the first Conservative conference since 1991 where there has been any prospect of a Tory victory at the next election (and even then they half expected to lose to Neil Kinnock's resurgent Labour Party in 1992). Birmingham was noticeably lacking in the braying Tory boys and the blue-rinse bigots that paraded through Blackpool and Bournemouth in days gone by. The urban setting seemed to have a sobering effect, with the high command under strict instructions not to look triumphalist.

As it happened, the conference coincided with further collapses in the international financial markets. In other circumstances, the council tax freeze, designed to give householders at least one fixed point in their budgets, could have been the moment the Tories clinched the next election. (Labour ministers had been urged to consider a similar measure but feared they would be accused, as with the 10p tax fiasco, of hitting the poorest in the society through cutbacks in local services.) But Osborne's thunder was stolen by events in Washington as the House of Representatives surprised everyone by voting down the US treasury's bailout plan. Make no mistake, the events of September 2008 challenge the ideological underpinning of the Thatcherite right just as surely as the events of December 1989 shook the foundations of the socialist left.

Sanity has broken out with talks between the three main parties on the best way to progress through the world econo mic crisis. This is nothing approaching a government of national unity yet, but at least the opposition parties accept that a strategy of hostility to the government's plans for the sake of destabilising Gordon Brown is not in the best interests of the country.

The danger is that, such is the urgency of the crisis, that all other business of government will grind to a halt. Before the summer ministers spoke of a sclerosis at Downing Street which made it impossible to get a decision out of the Prime Minister. Now it is entirely in Brown's political interest to concentrate on shoring up confidence in the banking system. It is also the right thing to do.

There should now be no question of reshuffling his loyal Chancellor. Rather, Alastair Darling should be appointed to head an emergency committee that would include Vince Cable and Ed Balls. He should also consider bringing in an experienced Conservative. It might be wise to avoid David Cameron's mentor Norman Lamont, who presided over the last British economic crisis, but the former chancellor Kenneth Clarke has been prepared to stand on cross-party platforms on Europe and can take some responsibility for digging the country out of a hole last time around.

While the Prime Minister is so focused on the economy, the time is right to appoint a deputy prime minister to oversee the rest of domestic policy. As elected deputy party leader, this should probably be Harriet Harman, but it could equally be Alan Johnson, who is a more popular figure among his colleagues, or John Denham, the respected Universities Secretary.

In the spirit of co-operation, here is a series of proposals that could be seized on by a radical deputy prime minister, a bold opposition party, or both.

First, a moratorium on legislation. The process of government is locked up. A genuinely radical government would simply say that it would now pass only the annual Finance Bill (the Budget) and emergency legislation - no more action for the sake of appearing to act. The moratorium would run in parallel with the abolition of Whitehall's consultancy culture, forcing a reform of the civil service.

Second, an introduction of consultative local democracy on the model of experiments in Canada and Brazil would move towards reviving our moribund political structures.

Third, electoral reform. Brown could and should have renewed the political process with a promise of reform of the first-past-the-post system. The Conservative Party will not be able to claim that it has truly modernised itself until it makes a similar leap of imagination.

It may seem odd to talk about the normal business of government during an international crisis. But as Winston Chur chill's deputy Clement Attlee demonstrated when he took charge of domestic policy in the coalition government of 1940, ordinary life goes on, even in times of war.

This article first appeared in the 06 October 2008 issue of the New Statesman, Perils of power

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After Article 50 is triggered, what happens next?

The UK must prepare for years, if not decades, of negotiating. 

Back in June, when Europe woke to the news of Brexit, the response was muted. “When I first emerged from my haze to go to the European Parliament there was a big sign saying ‘We will miss you’, which was sweet,” Labour MEP Seb Dance remembered at a European Commission event. “The German car industry said we don’t want any disruption of trade.”

But according to Dance – best known for holding up a “He’s Lying” sign behind Nigel Farage’s head – the mood has hardened with the passing months.

The UK is seen as demanding. The Prime Minister’s repeated refusal to guarantee EU citizens’ rights is viewed as toxic. The German car manufacturers now say the EU is more important than British trade. “I am afraid that bonhomie has evaporated,” Dance said. 

On 31 March the UK will trigger Article 50. Doing so will end our period of national soul-searching and begin the formal process of divorce. So what next?

The European Parliament will have its say

In the EU, just as in the UK, the European Parliament will not be the lead negotiator. But it is nevertheless very powerful, because MEPs can vote on the final Brexit deal, and wield, in effect, a veto.

The Parliament’s chief negotiator is Guy Verhofstadt, a committed European who has previously given Remoaners hope with a plan to offer them EU passports. Expect them to tune in en masse to watch when this idea is revived in April (it’s unlikely to succeed, but MEPs want to discuss the principle). 

After Article 50 is triggered, Dance expects MEPs to draw up a resolution setting out its red lines in the Brexit negotiations, and present this to the European Commission.

The European Commission will spearhead negotiations

Although the Parliament may provide the most drama, it is the European Commission, which manages the day-to-day business of the EU, which will lead negotiations. The EU’s chief negotiator is Michel Barnier. 

Barnier is a member of the pan-EU European People’s Party, like Jean-Claude Juncker and German Chancellor Angela Merkel. He has said of the negotiations: “We are ready. Keep calm and negotiate.”

This will be a “deal” of two halves

The Brexit divorce is expected to take 16 to 18 months from March (although this is simply guesswork), which could mean Britain officially Brexits at the start of 2019.

But here’s the thing. The divorce is likely to focus on settling up bills and – hopefully – agreeing a transitional arrangement. This is because the real deal that will shape Britain’s future outside the EU is the trade deal. And there’s no deadline on that. 

As Dance put it: “The duration of that trade agreement will exceed the life of the current Parliament, and might exceed the life of the next as well.”

The trade agreement may look a bit like Ceta

The European Parliament has just approved the Comprehensive Economic and Trade Agreement (Ceta) with Canada, a mammoth trade deal which has taken eight years to negotiate. 

One of the main stumbling points in trade deals is agreeing on similar regulatory standards. The UK currently shares regulations with the rest of the UK, so this should speed up the process.

But another obstacle is that national or regional parliaments can vote against a trade deal. In October, the rebellious Belgian region of Wallonia nearly destroyed Ceta. An EU-UK deal would be far more politically sensitive. 

The only way is forward

Lawyers working for the campaign group The People’s Challenge have argued that it will legally be possible for the UK Parliament to revoke Article 50 if the choice is between a terrible deal and no deal at all. 

But other constitutional experts think this is highly unlikely to work – unless a penitent Britain can persuade the rest of the EU to agree to turn back the clock. 

Davor Jancic, who lectures on EU law at Queen Mary University of London, believes Article 50 is irrevocable. 

Jeff King, a professor of law at University College London, is also doubtful, but has this kernel of hope for all the Remainers out there:

“No EU law scholar has suggested that with the agreement of the other 27 member states you cannot allow a member state to withdraw its notice.”

Good luck chanting that at a march. 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.