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

By Martin Bright

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.

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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.

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