Not enough fire in the belly

Labour's younger ministers are competent and assiduous, but none has yet emerged as inspirational. W

So why has no one moved against Gordon Brown? Where are the bold spirits in the cabinet prepared to resign over 42 days detention without charge, as Robin Cook did over the decision to go to war in Iraq? Why has no single figure emerged as a potential rival to the Prime Minister?

These are not mere rhetorical flourishes, but questions now being expressed on a daily basis by Labour backbenchers and even some ministers. The obvious response is that any challenge to Brown would be a suicidal act of disloyalty. It would rip a still remarkably unified party asunder and trumpet the fact that Labour no longer believes it can win the next election. But that is not the whole story.

Imagine if, for instance, James Purnell or David Miliband resigned from the cabinet and returned to the back benches saying that the drift had gone far enough. They could announce that the position of the government was no longer sustainable and a new approach was needed. This individual could even have the luxury of resigning on a matter of principle: over the government's increasingly authoritarian anti-terror legislation, or the failure to stay on track with poverty targets. In all likelihood, the earth would swallow them up and they would be consigned to a life of obscurity for such an act of treachery.

But what a prize if they pulled it off. Even if the next election is already lost, the man or woman who was able to prevent a Conservative landslide would be well placed to lead the party through a short period of opposition before returning in triumph to Downing Street. In such extraordinary times, with public opinion so volatile, isn't it surprising that no one is prepared to take the risk?

The answer lies with the character of the younger generation of cabinet ministers, who came to political maturity under new Labour. With each potential candidate, it is possible to explain away their reticence. Ed Balls, Ed Miliband and Douglas Alexander are loyal servants of the Prime Minister, who owe their political careers to his patronage. They will never turn against him. Andy Burnham is too new to the cabinet and not an obvious coup leader. James Purnell lacks the necessary depth of support within the Parliamentary Labour Party. David Miliband had his chance last year and blew it. The only women senior enough, Ruth Kelly and Jacqui Smith, are not thought worthy of consideration.

It would have been a tragedy if this talented group of younger Labour politicians had never been given the chance to run a large government department. They have been, for the most part, competent and assiduous in their jobs. But none has yet shown him- or herself to be the kind of bold or inspirational figure that makes for leadership material.

In 2006, I dubbed this group of fortysomething politicians the "Adrian Mole generation", as they are the same age as Sue Townsend's eponymous hero and shared some of his capacity for tortured self-reflection. Along with their Conservative and Liberal Democrat counterparts, I suggested that they were likely to dominate the British political scene for the next decade. With David Cameron as Tory leader and Nick Clegg at the helm of the Lib Dems, that is now beyond doubt.

This group grew to adulthood between the miners' strike of 1984 and the collapse of the Berlin Wall in 1989, so their ideology is not defined by the traditional left-right divisions. But the other defining event of their lives was the global economic recession of the late 1980s, which struck just as they were leaving university into an uncertain world. No surprise, perhaps, that many of them found refuge in the cosy, secure world of party politics. What this means, however, is that they are collectively defined by their instinct for caution. These are people psychologically programmed against taking risks.

One young minister told me recently that there is a great deal of frustration at the inability of new Labour's second generation to produce a politician with fire in the belly. "Where is the figure who will change the way we do politics? Where is our Barack Obama?" These are good questions. When David Cameron starts to offer himself up as the nearest thing Britain has to a candidate who represents "change we can believe in", then you know we are in trouble.

In its official guise, new Labour is more than ten years old. It is two decades old if you count the Kinnock years. Everybody knows it needs recasting. But it looks as if we will need to skip a generation before someone arrives with the guts to carry out the necessary revolution. We may not yet have even heard the name of the next great leader of the Labour Party.

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Leader: The unresolved Eurozone crisis

The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving.

The eurozone crisis was never resolved. It was merely conveniently forgotten. The vote for Brexit, the terrible war in Syria and Donald Trump’s election as US president all distracted from the single currency’s woes. Yet its contradictions endure, a permanent threat to continental European stability and the future cohesion of the European Union.

The resignation of the Italian prime minister Matteo Renzi, following defeat in a constitutional referendum on 4 December, was the moment at which some believed that Europe would be overwhelmed. Among the champions of the No campaign were the anti-euro Five Star Movement (which has led in some recent opinion polls) and the separatist Lega Nord. Opponents of the EU, such as Nigel Farage, hailed the result as a rejection of the single currency.

An Italian exit, if not unthinkable, is far from inevitable, however. The No campaign comprised not only Eurosceptics but pro-Europeans such as the former prime minister Mario Monti and members of Mr Renzi’s liberal-centrist Democratic Party. Few voters treated the referendum as a judgement on the monetary union.

To achieve withdrawal from the euro, the populist Five Star Movement would need first to form a government (no easy task under Italy’s complex multiparty system), then amend the constitution to allow a public vote on Italy’s membership of the currency. Opinion polls continue to show a majority opposed to the return of the lira.

But Europe faces far more immediate dangers. Italy’s fragile banking system has been imperilled by the referendum result and the accompanying fall in investor confidence. In the absence of state aid, the Banca Monte dei Paschi di Siena, the world’s oldest bank, could soon face ruin. Italy’s national debt stands at 132 per cent of GDP, severely limiting its firepower, and its financial sector has amassed $360bn of bad loans. The risk is of a new financial crisis that spreads across the eurozone.

EU leaders’ record to date does not encourage optimism. Seven years after the Greek crisis began, the German government is continuing to advocate the failed path of austerity. On 4 December, Germany’s finance minister, Wolfgang Schäuble, declared that Greece must choose between unpopular “structural reforms” (a euphemism for austerity) or withdrawal from the euro. He insisted that debt relief “would not help” the immiserated country.

Yet the argument that austerity is unsustainable is now heard far beyond the Syriza government. The International Monetary Fund is among those that have demanded “unconditional” debt relief. Under the current bailout terms, Greece’s interest payments on its debt (roughly €330bn) will continually rise, consuming 60 per cent of its budget by 2060. The IMF has rightly proposed an extended repayment period and a fixed interest rate of 1.5 per cent. Faced with German intransigence, it is refusing to provide further funding.

Ever since the European Central Bank president, Mario Draghi, declared in 2012 that he was prepared to do “whatever it takes” to preserve the single currency, EU member states have relied on monetary policy to contain the crisis. This complacent approach could unravel. From the euro’s inception, economists have warned of the dangers of a monetary union that is unmatched by fiscal and political union. The UK, partly for these reasons, wisely rejected membership, but other states have been condemned to stagnation. As Felix Martin writes on page 15, “Italy today is worse off than it was not just in 2007, but in 1997. National output per head has stagnated for 20 years – an astonishing . . . statistic.”

Germany’s refusal to support demand (having benefited from a fixed exchange rate) undermined the principles of European solidarity and shared prosperity. German unemployment has fallen to 4.1 per cent, the lowest level since 1981, but joblessness is at 23.4 per cent in Greece, 19 per cent in Spain and 11.6 per cent in Italy. The youngest have suffered most. Youth unemployment is 46.5 per cent in Greece, 42.6 per cent in Spain and 36.4 per cent in Italy. No social model should tolerate such waste.

“If the euro fails, then Europe fails,” the German chancellor, Angela Merkel, has often asserted. Yet it does not follow that Europe will succeed if the euro survives. The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving. In these circumstances, the surprise has been not voters’ intemperance, but their patience.

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump