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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In the race to be France's next president, keep an eye on Arnaud Montebourg

Today's Morning Call. 

Good morning. As far as the Brexit talks are concerned, the least important voters are here in Britain. Whether UK plc gets a decent Brexit deal depends a lot more on who occupies the big jobs across Europe, and how stable they feel in doing so.

The far-right Freedom Party in Austria may have been repudiated at the presidential level but they still retain an interest in the legislative elections (due to be held by 2018). Both Lega Nord and Five Star in Italy will hope to emerge as the governing party at the next Italian election.

Some Conservative MPs are hoping for a clean sweep for the Eurosceptic right, the better to bring the whole EU down, while others believe that the more vulnerable the EU is, the better a deal Britain will get. The reality is that a European Union fearing it is in an advanced state of decay will be less inclined, not more, to give Britain a good deal. The stronger the EU is, the better for Brexit Britain, because the less attractive the exit door looks, the less of an incentive to make an example of the UK among the EU27.

That’s one of the many forces at work in next year’s French presidential election, which yesterday saw the entry of Manuel Valls, the French Prime Minister, into the race to be the Socialist Party’s candidate.

Though his star has fallen somewhat among the general public from the days when his opposition to halal supermarkets as mayor of Evry, and his anti-Roma statements as interior minister made him one of the most popular politicians in France, a Valls candidacy, while unlikely to translate to a finish in the top two for the Socialists could peel votes away from Marine Le Pen, potentially allowing Emanuel Macron to sneak into second place.

But it’s an open question whether he will get that far. The name to remember is Arnaud Montebourg, the former minister who quit Francois Hollande’s government over its right turn in 2014. Although as  Anne-Sylvaine Chassany reports, analysts believe the Socialist party rank-and-file has moved right since Valls finished fifth out of sixth in the last primary, Montebourg’s appeal to the party’s left flank gives him a strong chance.

Does that mean it’s time to pop the champagne on the French right? Monteburg may be able to take some votes from the leftist independent, Jean-Luc Mélenchon, and might do some indirect damage to the French Thatcherite Francois Fillon. His supporters will hope that his leftist economics will peel away supporters of Le Pen, too.

One thing is certain, however: while the chances of a final run-off between Le Pen and Fillon are still high,  Hollande’s resignation means that it is no longer certain that the centre and the left will not make it to that final round.

THE SOUND OF SILENCE

The government began its case at the Supreme Court yesterday, telling justices that the creation of the European Communities Act, which incorporates the European treaties into British law automatically, was designed not to create rights but to expedite the implementation of treaties, created through prerogative power. The government is arguing that Parliament, through silence, has accepted that all areas not defined as within its scope as prerogative powers. David Allen Green gives his verdict over at the FT.

MO’MENTUM, MO’PROBLEMS

The continuing acrimony in Momentum has once again burst out into the open after a fractious meeting to set the organisation’s rules and procedures, Jim Waterson reports over at BuzzFeed.  Jon Lansman, the organisation’s founder, still owns the data and has the ability to shut down the entire group, should he chose to do so, something he is being urged to do by allies. I explain the origins of the crisis here.

STOP ME IF YOU’VE HEARD THIS ONE  BEFORE

Italy’s oldest bank, Monte Paschi, may need a state bailout after its recapitalisation plan was thrown into doubt following Matteo Renzi’s resignation. Italy’s nervous bankers will wait to see if  €1bn of funds from a Qatari investment grouping will be forthcoming now that Renzi has left the scene.

BOOM BOOM

Strong growth in the services sector puts Britain on course to be the highest growing economy in the G7. But Mark Carney has warned that the “lost decade” of wage growth and the unease from the losers from globalisation must be tackled to head off the growing tide of “isolation and detachment”.

THE REPLACEMENTS

David Lidington will stand in for Theresa May, who is abroad, this week at Prime Ministers’ Questions. Emily Thornberry will stand in for Jeremy Corbyn.

QUIT PICKING ON ME!

Boris Johnson has asked Theresa May to get her speechwriters and other ministers to stop making jokes at his expense, Sam Coates reports in the Times. The gags are hurting Britain’s diplomatic standing, the Foreign Secretary argues.

AND NOW FOR SOMETHING COMPLETELY DIFFERENT

It’s beginning to feel a bit like Christmas! And to help you on your way, here’s Anna’s top 10 recommendations for Christmassy soundtracks.

MUST READS

Ian Hislop on the age of outrage

The lesson of 2016: identity matters, even for white people, says Helen

Why I’m concerned about people’s “very real concerns” on migration

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Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.