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26 June 2008

Don’t write off Mr Bean

Brown has made blunders and suffered bad luck. But if he can show clarity and conviction, the next e

By Vincent Cable

It isn’t breathtakingly original to note that Gordon Brown has had a terrible first year in office. The interesting issue is why. I don’t believe it is necessary to invoke, as David Cameron has done, amateur psychiatry or bitchy gossip. It is obvious that the Prime Minister doesn’t have Tony Blair’s (or Cameron’s) easy charm or thespian skills. But that is not necessarily a criticism. The real failings have been of political judgement and strategy – and perhaps philosophy – combined with unusual bad luck.

The failure to call a general election last autumn was an awful mistake. Brown was left looking weak and indecisive, but also without political legitimacy as an appointed, not elected, head of government.

That misjudgement was perhaps shaped by over-confidence about the likely durability of his achievements in economic management and an ill-founded assumption that nothing could go wrong with the British economy. He has milked the credit for ten years of steady growth, low unemployment and low inflation, built in part on good policy like the independence of the Bank of England and a liberal approach to immigration, trade and foreign investment. But rhetoric about “no more boom and bust” and the best economic performance since the Hanoverians’ has fed complacency. Brown’s government is not to blame for inflationary trends in commodity prices or the rupture in financial intermediation – the credit crunch – but it is to blame for exaggerating earlier achievements caused by disinflationary global price trends. And it has been totally negligent in failing to see the damage caused by rapid credit expansion in fuelling unsustainable personal debt and a dangerous bubble in the housing market. Despite direct warnings, from myself and others, there was no glimmer of understanding of the hazards of asset inflation and deflation. Like the Titanic‘s owners, he ordered “full speed ahead” through a sea of economic icebergs. It remains to be seen if that particular misjudgement is equally fatal.

The other strategic blunder has been not to recognise the limitations of the clever, media-savvy, manipulative politics perfected but overused by Bill Clinton and Tony Blair. Any political professional knows that there is a role for “spin”, “expectations management” and “triangulation”, but the public has become cynical and anyway, Brown is not very good at this kind of politics. Those personally well-disposed to him (which, perhaps surprisingly, includes me) were genuinely surprised that he didn’t manifest the intellectual clarity and moral certainty we know he has. Instead, we were treated to gimmicks like tea with Lady Thatcher; disreputable populism such as “British jobs for British workers” – this, from a champion of an open door to eastern European immigrant workers; and opportunistic, regressive tax policies, as with inheritance tax and CGT, rounded off by the 10p rate.

My dig about Brown’s transformation from Stalin to Mr Bean would not have hit home if he hadn’t spent the months prior to his autumn of banana skins implausibly presenting himself as an ultra-competent, square-jawed hero of the battle against pestilence and flood.

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There is also a deeper problem. While he and my party both aspire to be part of a progressive consensus, there is a growing gulf in communication and belief between its liberal and socialist wings. He clearly believes that a powerful, activist state is a force for good. Liberals are sceptical. We warn against the risks in seeking to create massive centralised databases – harshly revealed in the case of the lost CDs and the growing technical problems with the NHS IT system. We worry about over-complexity and system failure – as with failings in the tax credit and benefit system and the Kafkaesque processes of the Immigration and Nationality Directorate. We do not share, either, Gordon Brown’s faith that equipping Robocops with numerous additional powers of arrest, detention without charge, freedom to collect DNA samples and powers to demand possession and display of compulsory ID cards will do anything other than undermine traditional liberties. On these, the issue is not one of competence or presentation, but of fundamental difference of outlook. One of Gordon Brown’s current problems is that efforts to appear tough and in control of crime and terrorism are opening up a big fault line with natural allies who are progressive but also liberal and sceptical about over-centralisation and state power.

Uncertain outcomes

Politics is an unpredictable business and it is too early to write off Gordon Brown. Those of us who have been around for a while remember that, after an almost comical collapse of authority, the Tories almost crept back in 1964. And following the economic and political disaster of the Wilson years after 1966, he almost won in 1970 (and was forgiven by the electorate four years later). For now, the Tory alternative of nice, sweet, young men without belief or substance may well be judged by the electorate to be ill-equipped to handle a crisis. Another uncertainty is my own party. It is a major, sometimes dominant force in the 63 seats we hold, but with several dozen others within striking range, where the outcomes for the other parties are uncertain.

If Gordon Brown can manufacture better luck and better political judgement; if he can demonstrate unambiguously that he is on the side of the poor and the ordinary middle-income family rather than the “fat cats”; if he can understand and respond to those who worry about over-centralisation and illiberalism; and if he can demonstrate more conviction, and courage, in the face of the next wave of challenges – Afghanistan? A grisly terrorist attack? – the next general election may prove to be much more competitive than currently seems likely.

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