Darling in the hall of horrors

Unflattering comparisons to certain predecessors have dogged the Chancellor's week. He is damaged, w

By no stretch of the imagination can Alistair Darling be regarded as a chancellor who has chalked up unalloyed triumphs. The fumbled nationalisation of Northern Rock, the perceived U-turns on capital gains and the taxation of non-doms and the sharp deterioration in the public finances have framed him, in the public mind, as inept.

Indeed, a YouGov poll found that 44 per cent of those surveyed believe that Darling, once regarded as new Labour's "safe pair of hands", should be fired. Only 27 per cent of those polled could bring themselves to support him staying at the Treasury. In the City, where opinion turns on a sixpence, the calls for his head have become shrill. New Labour's traditional enemies have detected weakness and have pounced upon it.

Following Gordon Brown at the Treasury was always going to be a difficult task, even for someone who gave the appearance of being as calm as Darling. But no one could have predicted the opprobrium that has been heaped upon him.

Once Brown, with all his bustling ambition, had gone to No 10, all those critics and commentators who feared to cross the former chancellor saw his successor as an easy target. This has led to some very unfortunate comparisons for the current incumbent at No 11. In recent weeks Darling has variously been described as the worst chancellor since the late Anthony Barber and Norman Lamont. Neither comparison bears much scru tiny. Barber and Lamont were Tories and both held office for several years before shortcomings became apparent.

Barber's "Competition and Credit Control" unleashed the first great inflation and the secondary banking collapse of 1974-75. In that crisis the Bank of England, still in charge of financial supervision, launched a secret rescue of the kind which might have saved Darling the embarrassment of Northern Rock. However, even Darling's most bitter opponents cannot blame him for a Barber-style credit explosion.

As for Lamont, he presided over a huge public sector debt and the UK's chaotic exit from the Exchange Rate Mechanism, when interest rates went up and down like a Yo-yo as the chancellor famously sang in the bath.

Many of Darling's problems stem from next door at No 10. When Brown became Prime Minister he removed some of the Treasury's most skilled operators. On the ministerial front the biggest loss was the economic secretary, Ed Balls, in effect the City minister, who spent much of his time responding to the complaints of the Square Mile. There was also an outflow of senior officials, including John Cunliffe, Tom Scholar (now back), Michael Ellam and the gung-ho special adviser Damian McBride.

Huge anger

Brown rushed next door so quickly that he failed to clear his desk. Among the issues he left behind were two long-standing, delicate tax questions surrounding the super-rich. Huge anger was building in the media and in the Commons over the exploitation of tax loopholes by the private equity princelings - tearing the heart out of Brit ish business - and non-domiciled freeloaders.

The Prime Minister must also take his share of the blame for the Northern Rock fiasco. In the aftermath of the nationalisation decision, Brown in particular sought to depict the implosion at the Newcastle bank as part of a much broader international event. At his regular Downing Street press conference there was much talk of obscure branches of finance - US monolines, for instance, which insure financial instruments such as bonds.

Brown was right to point out that the credit crunch which struck on 9 August was born in America's trailer-trash mortgage market. But it was changes made by Brown to Britain's system of regulation in 1997 that led to months of dith ering, uncertainty, charges of incompetence and eventually, when all other escape routes had been closed, nationalisation.

The "Tripartite" system of regulation was designed by Brown and Balls. The intention was to remove responsibility for banking supervision from the Bank of England, so that it could concentrate on its core function of controlling inflation. Bank supervision was moved lock, stock and barrel to the new super-regulator, the Financial Services Authority at Canary Wharf.

But there was a fundamental flaw in the system. The Bank of England, like all central banks, controlled the liquidity - the ability to provide cash to institutions in difficulty - but it was the ineffectual FSA that determined when they were in trouble. This disconnection meant that no one was directly in charge and when Northern Rock hit the buffers because it ran out of ready cash, no one was willing to organise the kind of rescue by the banking industry that is the norm in almost every other country. This even though there was at least one offer on the table, from Lloyds TSB, the high street bank.

A member of the Bank of England's ruling court told me that as important as the institutional paralysis were the people at the helm. Imagine if (Lord) Eddie George were still governor of the Bank of England, Howard Davies (now at the London School of Economics) were head of the FSA and Brown were still at the Treasury. For sure, the willpower and leadership required for a secret banking rescue, which would have prevented the humiliating run on the Rock, would have been present.

Instead, the Bank, the FSA and the Treasury all seemed intent in mid-September to avoid responsibility and blame for a debacle that would run on until February. Again Brown must take a share of the blame. It was he who insisted that every private-sector route be explored before nationalisation took place, on the grounds that public ownership was too old Labour, a throwback to the dark days of the Wilson government and British Leyland and British Steel in the 1970s. Yet the long delays in taking firm decisions gave the impression of a vacillating administration that found it impos sible to make the tough political choice until all other options had run out.

Darling is also the victim of fundamental Budget failings. Brown, despite his reputation as the "iron chancellor", had taken his eye off fiscal policy, and public borrowing was soaring. The time to cut the Budget deficit is when the economy is growing. Instead, Brown chose to go on a public spending splurge in a vain attempt to deal with the problems of the NHS and education.

His ability to spend freely was heavily dependent on buoyant tax income, much of it from the City. Unfortunately, when the credit crunch set in, tax income from banks and those who work for them plummeted and a chasm opened up in the Budget. At the very moment when the Treasury might have adopted the Keynesian solution of spending or tax-cutting its way out of recession - as the International Monetary Fund now recommends - Darling found his hands tied.

As a consequence, when he delivers his first Budget next month, Darling will have to explain away a budgetary black hole similar to that faced by Norman Lamont when he introduced Britain's biggest ever tax-raising Budget in 1993. Not a comparison that Darling will relish.

Yet it was the unresolved tax issues that have been the real undoing of Darling. The rushed pre-Budget report in October took the decisive steps to tax the super-rich. Capital gains tax was to be simplified and raised from 10 per cent to 18 per cent. And Labour, stealing and wearing Tory clothes, would impose a £30,000 charge on the non-doms.

It is what followed that so damaged Darling's reputation. The City, supported by the CBI, the Financial Times and the Telegraph, launched a vitriolic campaign against both proposals, claiming they would destroy London's leadership as a financial centre and send the private equity princelings and non-doms fleeing to Monaco and Switzerland. Proposals that enjoyed the support of millions of ordinary, hard-working, taxpaying Britons were being attacked by a small clique of vested interests.

Was it avoidable?

In both cases the pressure on the Chancellor became so strong that No 10 orchestrated retreats which left Darling looking weak and indecisive. In the case of non-doms, Darling was specifically undermined by one from Brown's government of all the talents, the excitable former CBI boss Digby Jones - the trade minister.

Could all of this have been avoided? A more robust chancellor could have taken on his critics, rather than allow them to dominate the agenda. The private equity bosses and non-doms have no political constituency in the UK, apart from the disgraced bankers of the City. Yet the reality is that the tax retreats were not humiliating U-turns, as portrayed in lurid headlines, but mid-course adjustments of the kind that happen with all complex tax changes.

The assassination of Darling by a peculiar combination of forces from next door at No 10, the CBI and sections of the media has not been pretty to watch. They sensed weakness and attacked relentlessly. His image will not have been helped by his muddled media appearances after the nationalisation of Northern Rock was announced. As jobs in Newcastle are axed by his chosen company doctor, Ron Sandler, Darling may well come to regret the phrase "business as usual". It is also likely that "temporary" ownership could mean anything up to a decade, given the history of previous bank nationalisations on both sides of the Atlantic.

Darling needs to find the inner reserves to take on his enemies in the Budget on 12 March. Most importantly, he must stake out an aggressive, US-style growth strategy for keeping recession at bay. Otherwise he will find his survival at the Treasury foreshortened and could join the hall of horrors of Britain's worst chancellors.

Alex Brummer is City editor of the Daily Mail

This article first appeared in the 25 February 2008 issue of the New Statesman, Pakistan reborn

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New Statesman readers on Jeremy Corbyn, one year on

We asked you what you thought of Corbyn, and found that New Statesman readers are apparently as divided as the Labour membership.

Earlier in the summer, we asked readers for their views on Jeremy Corbyn as he prepared for another leadership contest. Below is a selection of responses. To avoid accusations of bias, I divided the submissions into broadly pro- and anti-Corbyn positions (usually based on whether the writer thought Corbyn should continue as leader) and the proportion of each that the NS received is reflected here. It seems our readers are as divided as the membership over a leader who has turned Labour into a mass-membership social movement.

 

Labour had been drifting

I voted for Jeremy Corbyn because he held distinctly socialist ideas and because he had a long record of standing up for these. I felt the Labour Party had been drifting and it was no longer clear where it stood on some of the big issues. Under Jeremy, Labour has shifted – and clearly Owen Smith, like him, is also on the left of the party. Jeremy has conducted himself with dignity under enormous duress. Locally, we have seen many new members join the party, attracted by Jeremy’s focus on serious political issues and by his clear views.

John Boaler, Calne, Wiltshire

 

The party might split

I remember Jeremy Corbyn from the 1980s onwards, so I wasn’t surprised that he refused to “play the game”. I saw this as unhelpful but not necessarily harmful. He inspired many to get involved in politics, especially younger people, which was and is good. However, I thought he would realise sooner or later that he wasn’t up to the job. My views changed when he didn’t stand aside after the MPs’ vote of no confidence. My impression of him then was as someone obstructive – destructive, even – not charmingly rebellious. If he wins decisively, I think the party may have to think about splitting.

James Chater, London

 

A divided party cannot rule

While most Labour MPs oppose Corbyn because they see him as unelectable, they fail to see that a divided party is causing much more damage to Labour’s prospects than his leadership. Perhaps Labour MPs would serve their party better by presenting to the public a united front, even if it isn’t one they fully support.

Oliver Callaghan, Lancashire

 

We need a snap election

I cried when Corbyn won the leadership election last year, as I felt that it would be the end of the Labour Party. There was nothing about his campaign which inspired me and I found his lack of ability to think on his feet very worrying. Recently, I have been perplexed at how even the unfairness displayed in the nepotistic employment of his son Seb [who works for the shadow chancellor, John McDonnell] has failed to puncture the aura of sanctity. The only solution seems to be a snap election to prove that he is absolutely unelectable, so that Labour can rebuild.

Caroline Dorber, Lichfield, West Midlands

 

I’ll be voting for Smith

I voted for Corbyn as a refreshing change from politicians repeating patronising soundbites. However, the turning point for me was during the Paris attacks [in November 2015]. He was asked to confirm that he would use lethal force against terrorists if a similar incident happened here and he hesitated, as if considering an interesting philosophical point. I will be voting for Owen Smith (but wish I could vote for Owen Jones).

Philippa Barton, London

 

We are poised for change

I resigned from the Lib Dems to join Labour because of Jeremy Corbyn. His task is to re-create the Labour Party as a socialist, not a Blairite centre-left, party. He is right to persevere. “Labour” MPs should support him or resign. My view is that he has the right principles and is very courageous, but is still receiving unfair and corrupted coverage by the British media. This country is poised for great change.

George Macpherson, Dulverton, Somerset

 

We need a Labour government

I voted for Jeremy Corbyn first time round, believing a new standard of politics could be achieved, and to some extent it has. He is undoubtedly a decent, principled man whose politics I share and actively advocate. His staunch defence of the NHS, his solidarity with striking teachers and junior doctors and his sustained attack on austerity are admirable. Yet it is clear that to overturn six years (and counting) of austerity, we need a Labour government. With Corbyn as our leader, we won’t achieve that aim any time soon.

Josh Wilmer, Leeds

 

Corbyn has been underestimated

Undeniably the biggest surprise for many about Corbyn’s term of leadership has been the way they underestimated the man himself. Those who sought to remove him simply didn’t understand the nature of their prey. His resilience, courage and respectful loyalty to his supporters are qualities that perhaps should not define a person as being unfit to lead or incapable of winning an election. With his experience and involvement with the needs of the disabled, to take just one example, he has a social and political CV more relevant to the needs of many in Britain today than a business or public relations background.

Ian Flintoff, Oxford

 

Labour has become a cult

I used to think of myself as on the left of the Labour Party. No longer. The way Corbyn and his supporters have behaved over the past year – the immaturity and ineptitude – has contaminated my view of the whole socialist project. They are not interested in winning. Fine if you’re well fed and middle class (like most Labour members): you’ll be OK whoever is in power. Not so good if you’re poor or working class (like most Labour voters) and you’re relying on a Labour government to improve your life chances. That’s Corbyn’s unforgivable crime, turning a practical, pragmatic party into an irrelevant cult.

Another year of this will finish Labour off – possibly for good.

Adam Patrick, via email

 

Lone voice in wilderness

Three people have struck me with their steadfast principles and quiet resolution in the past year: Ken Loach, Michelle Obama and Jeremy Corbyn. Though consistently demonised by the MSM [mainstream media], JC has maintained the principled stance he has always had. What mighty hypocrisy he would be accused of if he now abandoned it for short-term gain. His is a lone voice in UK politics speaking out for the ordinary citizen.

The New Labour rump should reflect on the fact that it was their policies that lost the last two general elections, largely because they were indistinguishable from the Tories. It is my hope that among the newer Labour intake of MPs there will be those who are not tainted by connection with global business interests or petty personal ambition. Most politicians say they entered politics to “make a difference”. JC and a principled team could do that.

Vivien Jones, Powfoot, Dumfriesshire

 

Metropolitan figure

Jeremy Corbyn’s “overwhelming” mandate was 60 per cent of the votes of a group comprising 0.05 per cent of the UK electorate. What about the other  99.95 per cent? What does Corbyn have to say to the bloke in Sunderland who reads the Daily Mail, used to vote Labour but is now Ukip, wants immigrants to go home, thinks Corbyn is as remote a metropolitan figure as David Cameron, and doesn’t think much of a bloke who won’t sing the national anthem? One year on, Corbyn and his cohorts do not seem to have recognised that or, worse, don’t care.

Iain Macniven, Highlands, Scotland

 

No to a Tory clone

New Labour won elections because it behaved like the Conservatives, turning a blind eye to tax avoidance/evasion, big bonuses and big-business bribery and corruption. David Cameron was pleased to call himself the “heir to Blair” but one who would do better because he had the willing support of his party. We don’t need a clone of the Conservative Party; we want an effective opposition that can shame the Conservatives into doing the right thing. Corbyn has done rather well in that respect.

Alice Edwards, Wokingham, Berkshire

 

The Micawbers dithered

I expected nothing from Corbyn and he hasn’t surprised me. He is not and never will be competent. Currently, the party is unelectable, but not indestructible. Scotland is the ominous warning. However, Corbyn and the people who manipulate him (John McDonnell, Seumas Milne, Momentum/Militant) are not wholly to blame for our dire state. I wrote in the NS in January what the PLP needed to do. But the Micawbers dithered and delayed. The Parliamentary Labour Party should at last go its own way, or face electoral oblivion.

Joe Haines, Tunbridge Wells, Kent

 

A purge of neoliberals could be his legacy

Any assessment of the Corbyn leadership has to be considered on two levels: how has he performed as a “traditional” leader of the opposition, and how has his leadership impacted on the political debate in the broader community? On the first question, certainly by the usual measures (unifying the parliamentary party, point-scoring against the government, etc) he has not been what the majority in the PLP want or expect. However, purging the Labour Party of the neoliberalist ideology that has compromised its capacity to confront the challenges of globalisation could well be his lasting achievement.

Paul Pearce, New South Wales, Australia

 

Greens against Corbyn

You may assume that, as a Green Party supporter, I am thrilled to have a lefty like Corbyn as Labour leader. Last year I was thankful for him having put such issues as Trident and austerity properly on the agenda. However, a year later, I’m calling for him to stand down. As long as we have first-past-the-post, Labour must be centre-left, and must be a broad church. Corbyn will not win a general election, and shouldn’t punish those who need help most by proving this in 2020, and extending Tory rule by another five years.

Freya Pigott, via email

 

Remarkable courage

I cannot tell if Corbyn has been a good leader of the Labour Party. From the moment he was elected 11 months ago a senior group of Labour MPs has plotted unceasingly to remove him when they should have been attacking a socially divisive Conservative government.

Corbyn wants to create a Nordic-style social-democratic party that recognises the important role of the public sector. They remain wedded to austerity and New Labour’s policy of privatisation.

How successful would I have been as leader if I had been surrounded by people whose sole aim was to remove me? I think that Corbyn has shown remarkable courage in fighting for what he believes in.

Barry Bennett, Kingston-upon-Thames

 

The experiment flopped

You can’t sit at the back in a grump with your arms folded then expect loyalty when you become leader. It needed an astute approach by someone who cared enough about Labour to work out how to unite everyone, and go on to become a radical, reforming, electable party.

It could have been magnificent, a spectacular achievement – but it flopped. I know this is a rant, and I am ashamed it’s personal, but I am furious.

Audrey Laughlin, Sandwich, Kent

 

An end to Blairism

Blairism doesn’t work; it is based on false premises, especially that the private sector is always superior to the public sector. Corbyn is not perfect, but he remains the only leader who consistently rejects these false premises. Until this changes, he’ll get my vote.

Peter Nicklin, Newcastle-upon-Tyne

 

Man of great integrity

Corbyn stepped up as Labour leader promising straight talking and honest, kinder politics; in his first year, he has delivered just that. He has conducted himself with great integrity at Prime Minister’s Questions. He has, however, taken a while to hone his style, and his determination to keep things civil has, on occasion, proved costly. This was demonstrated most clearly with his failure to capitalise on Iain Duncan Smith’s acrimonious departure from the cabinet. If Corbyn wins again, he should maintain the energy of his leadership campaign by making frequent public appearances and stating his case in the communities with which Labour must reconnect to ensure victory in 2020.

Samuel Peers, via email

 

It’s all over

I didn’t vote for Corbyn. A leadership candidate needs to be electable, not just selectable by members. I liked the way he contrasted with Cameron at the despatch box. But despite airing the emailed concerns of everyday Britons, he failed to speak clearly to Labour voters on the EU; a third opted for “Leave”. Moreover, he has failed to present a compelling policy offer to support his “new kind of politics”. With only feeble support from his parliamentary colleagues, the question is: if Corbyn wins again, will the last Labour MP to leave the party turn out the lights?

James Young, London

 

Should he play the game?

Corbyn has not been a complete disaster for Labour. He has navigated electoral tests – performing adequately in some, such as the local elections, and exceptionally in others, as in recent mayoral votes and by-elections. His finest achievement has been his influence on politics as a whole, gradually pulling the political and economic consensus over to the left and hugely expanding the party’s grass-roots potential by inflating the membership. As a supporter, I by no means wish him to become a professional politician, but he may now have to start playing the game to recover.

Tim Bliss, Kent

 

Don’t blame the media

Expected little, got even less. Intellectually feeble, organisationally incompetent, ideologically Neanderthal and copes poorly in adversarial situations, Corbyn lives in a neo-Marxist bubble surrounded by unpleasantly hard-nosed ideologues. He is incapable of convincing anyone beyond the faithful, who are as depressingly unrealistic as he is. His continuation as leader will make me review over 50 years’ support for the party. The attempt to blame his negative image on a hostile media is disingenuous and patronising. I and other critics are perfectly capable of making a judgement on what we see and hear.

Mike Penny, Northampton

 

Stop the selfies!

He appears well mannered, principled, different, refreshing, tough, genuine – and you have to admire the man for sticking with it. He shares initials with another great rabble-rouser and you can feel this is starting to become a cult – especially when he requests cuddles with his admirers. Some of us are starting to shudder. He appears to be unable to lead a team with credibility. Or is he just being blocked by the press, the cynics, the Blairites? How on Earth are we supposed to know the answers to such questions when the mainly right-wing press vilifies him and his party have never all rallied behind him?

If there is a credible alternative, bring it on. I don’t see one.

Lyn Poole, Tameside, Greater Manchester

 

I’ve lost my excitement

As a long-standing active Labour member, I was excited, if tentative, about the idea of Corbyn as leader. Sadly, his election has caused division from the bottom to the top of Labour and created an atmosphere of disrespect. A good leader should not let that happen.

Veronica Ward, south-east London

 

Who’s the alternative?

Due to his preference for angrily ranting at rallies to sensible debate with his colleagues, and allowing his praetorian guard to cut off contact from MPs and members alike, I have, regrettably, come to support replacing Jeremy as leader. My problem now is that those whom I trust to lead Labour to electoral success are not stepping forward, leaving us first with Angela Eagle, who is as wet as a bank holiday Monday, and now Owen Smith, who looks like a poor impression of John Oliver. However, I haven’t given up hope that one day, sooner or later, our talents (Dan Jarvis, Tristram Hunt, Chuka Umunna) will step forward from the back benches to lead our party.

Neal Rubow, via email

 

Smith is a weasel

When I heard that Jeremy Corbyn had been selected as leader, my heart soared. Here was a leader who was truly socialist in his values. If the party would stand behind him, ignore the little weasel that is Owen Smith, and save the energy that it uses trying to destroy him to rally round him and the causes he champions, we would have a leader par excellence and a party that can win the next election.

Kate Colgrave, Milton Keynes

 

Labour must reach out

The point of the Labour Party is to seek representation at all levels of government and through such representation to implement the policies agreed by its members. The most important role of the leader is to be a face of the party who can inspire. It is not sufficient to enthuse party members. Our message has to reach out to the majority, to people who in the past may have voted for other parties. Corbyn has signally failed to achieve this.

Michael Jefferys (former PPC, West Suffolk)

 

Politics should not be a business

The events and commentary surrounding Jeremy Corbyn’s tenure as Labour leader have brought some disturbing truths about our political system and society to the surface. Arguing whether he is electable is essentially turning politics into a business, with a politician’s agenda transformed into a service, to be bartered and shaped to best fit the market. A more pertinent question than “whether Corbyn is electable” would be: “Should Corbyn be electable?” If the answer to that is yes, we should fall behind him.

Erik Edman, Brussels, Belgium

 

Talk to the north

Labour voters in the north of England and elsewhere who look like abandoning us do want to hear about jobs, good pay, a better social life for them and their families. But Corbyn just seems to feel this is secondary to the central message of socialism. If he can’t put the economic well-being of the people and the country at the centre of the party’s message, then he will have failed the British people. Sadly, I believe he has.

Guthrie McKie (Labour councillor, Harrow)

 

“Yes” to the EU . . . with caveats

One thing Jeremy didn’t get wrong was his contribution to the referendum debate: a critical “yes” was far more in tune with most Labour voters than the last-minute pandering to racist attitudes, which did nothing but muddy the waters.

Jon Bounds, Abingdon, Oxfordshire

 

Support, not sniping

Corbyn has the right party but the wrong MPs. He should lose many at the next election; he should enter an electoral pact with the Liberal Democrats and the Greens on proportional representation and he should control better who gets on candidate shortlists. He deserves support, not sniping.

Roger Steer, via email

 

Missed open goals

I did not vote for Jeremy but I tried to support him as I have done every other leader. Yet I soon became disillusioned by his continual missing of open goals and the lack of any clear policy definition. Worse, on the doorstep, it was clear he did not resonate with voters.

We invited him to speak at a fundraising dinner but, despite many reminders, we could not get a reply. Ian Murray MP stepped in at short notice and we raised over £500. Many new members joined after Jeremy became leader but not one has supported any of our campaigning activities. This is not the new party of activists we were promised.

Peter Young, Strachan, Scotland

 

We need a realignment

I voted for Corbyn. I’m a Labour-voting union member – not the Daily Mail’s Trotskyite version, but a hard worker who could be made redundant at any moment. For me and my family, Corbyn talks sense: about social justice, about Trident, about the kind of society that Britain could be. But one thing has dismayed me – his failure to engage with the Remain campaign. And without election wins, nothing is possible.

I’ll be voting Corbyn again. But I suspect the best hope for change now is the implosion of both main parties, with a broad, socially minded, Europe-aspiring coalition taking on the ruling hard-right orthodoxy in a brutal, post-Brexit,
post-Scotland “rump UK”. Ken Clarke for leader, anyone?

Simon Procter, Ilford, Essex

 

From nice to stubborn

I thought he was a “nice” and principled man (though I didn’t vote for him as leader). Now I think he’s stubborn, rigid and more interested in his own principles than changing the UK for the better.

Georgina Webster, Keighley, West Yorkshire

This article first appeared in the 18 August 2016 issue of the New Statesman, Corbyn’s revenge