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Update 17 January 2008: Mr Brown’s five problems

Harold Wilson (Labour Prime Minister 1964-70 and 1974-6) is reported to have memorably remarked that ‘a week is a long time in politics.’ Had Gordon Brown the opportunity to reflect on political history in his troubled Autumn of 2007 (unlikely given all the problems that have pressed in on him) he would certainly agree. For the first couple of months of the Brown Premiership he seemed able to do nothing wrong; then from October he seemed able to do nothing right. He might, of course, comfort himself with Wilson’s observation: if things can go catastrophically wrong in a short time, swift recovery is equally possible. Mr Brown theoretically had until the spring of 2010 before he had to call an election; he certainly had at least another eighteen months. His problem, however, is that things have been going wrong for reasons that are more deep seated than individual competence, his or those of his ministers. His five big problems tell us something about the difficulty of appearing to be competent and decisive in modern British government.

• 17.1: Problem 1 – indecisiveness and the election date
• 17.2: Problem 2 – the great banking crisis
• 17.3: Problem 3 – the great data disk fiasco
• 17.4: Problem 4 – Labour’s undeclared donations
• 17.5: Problem 5 – extricating the government from Iraq
  

17.1: Problem 1 – indecisiveness and the election date

The wheels started to come off the Brown Premiership in the second half of September. An impressive lead in the opinion polls for the Prime Minister and his party led to widespread calls for a snap election to capitalise on the honeymoon which the Prime Minister was enjoying with the electorate. The Prime Minister undoubtedly did consider going to the country. The immediate event which deterred him was the rabbit pulled out of the hat by the Shadow Chancellor George Osborne at the Conservative Party Conference on 1 October: that the threshold for inheritance tax would rise from £300,000 to £1 million under a Conservative Government. Polling indicated that the proposal immediately struck a chord with ‘middle England.’ Not only did it force the Government into a ‘me too’ policy response, but it spooked the Prime Minister from calling an election. His explanation, that he preferred to set out and realise his vision for the country, was subject to widespread derision. But the critical factor governing this indecisiveness is not primarily temperamental; it lies in the logic of the situation facing any modern Prime Minister. The freedom of the Prime Minister to decide the General Election date is now one of the distinctive features of the Westminster system. (All the devolved systems operate on fixed electoral terms.) Prime Ministers have been able to exploit this in the past. But party loyalties are now so weak, and a substantial part of the electorate so volatile in its views and voting intentions, that a modern Prime Minister finds it almost impossible to gauge opinion a few weeks ahead. The problem is compounded by the sophistication of modern polling; Mr Brown, like other leaders, was bombarded by complex and often contradictory findings about the movement of opinion in key segments of the electorate. Thus, indecisiveness about when to call an election is now engrained in the mind of any Westminster Prime Minister. Mr Brown may well have looked a little enviously at the devolved systems, where at least that problem has been taken away from party leaders.

17.2: Problem 2 – the great banking crisis.

When depositors queued outside Northern Rock to withdraw their money for fear of the bank’s collapse in September, it marked something not seen in Britain since the 19 th century: a public collapse of confidence in a major banking institution. At the time of writing, while the commitment to underwrite the bank’s deposits – to the tune of £28 billion – had removed the politically embarrassing sight of small savers besieging the bank’s branches, nothing had been done to solve the basic conundrum: how to organise the stability of a banking system in the face of global financial markets over which a national government like that of Britain has little control. Arguments about the collapse have pointed fingers at the ‘tri-partite’ British system of regulation, where responsibility is shared between the Bank of England, the Treasury and the Financial Services Authority. The implication is that a more centralised and unitary system would have averted the crisis. Memories are short: the present system was designed in 1997, precisely because a simpler unitary system, in which the Bank of England controlled everything, failed to prevent the collapse of a major bank, Barings, in the middle of the 1990s. Mr Brown’s misfortune has been to encounter early in his term of office the consequences of the engrained instability and volatility of modern financial markets.

17.3: Problem 3 – the great data disk fiasco.

On 20 November the Chancellor of the Exchequer, already struggling with the Northern Rock crisis, was obliged to apologise in the House of Commons for the loss of two computer disks which contained the bank and personal details of seven million families (25 million people) which were sent by an unrecorded mail delivery from his department to the National Audit Office. The disks have never been recovered and open up huge possibilities for criminals to practice bank and identity fraud. Initial attempts to blame everything on the incompetence of a single junior official have since unravelled, and no wonder. The data disk fiasco is only the latest in a long lines of fiascos involving IT and the British state. To any reader of the work of Patrick Dunleavy and his colleagues at the London School of Economics the fiasco would have been no surprise. They have documented the fiascos, and explained why they occur (and recur): in essence, the system is so stripped of expert resource, and so reliant on private sector outsourcing, that it simply cannot achieve the level of technical competence needed to manage complex IT schemes. (See Patrick Dunleavy, Helen Margetts, Simon Bastow and Jane Tinkler. Digital Era Governance: IT corporations, the state and e-government. Oxford University Press, 2006.) Mr Brown’s problems here go beyond the probably temporary embarrassment of the loss of the disks: he can have no confidence in the ability of his administrative machine to manage IT competently. For a Prime Minister still committed to a national Identity Card scheme which can only work with sophisticated IT, that realisation is scary.

17.4: Problem 4 – Labour’s undeclared donations.

On 26 November Peter Watt resigned as General Secretary of the Labour Party in the wake of revelations that the Party had accepted donations amounting to £600,000 from Mr David Abrahams, a north east businessman, channeled through intermediaries to protect his identity. All concerned with the affair now admit that this was in breach of the law; only a thorough investigation, which has yet to be attempted, will tell us more about the full circumstances. But the long term importance of this affair goes well beyond temporary embarrassment, and beyond any immediate legislation which the government will now feel obliged to introduce. The long term importance is linked to an important theme examined in Politics and Governance in the UK: the decay of the major political parties as institutions. The Abrahams affair is only the latest in a set of such scandals, and it will not be the last. The root cause is that the parties have lost the mass membership which a generation ago raised substantial sums of money and provided the free labour ‘on the doorstep’ to fight elections. Now, parties fight elections via expensive professionally run national campaigns, and no longer have the membership to raise money. They are forced to numerous desperate stratagems – legal, quasi-legal and sometimes downright illegal – to raise the cash. Mr Brown’s problems here go well beyond Mr Abrahams: they go to the heart of the very functioning of political parties in Britain. His only consolation can be that the Conservatives and the Liberal Democrats have as discredited a history in their dealings with donors.

17.5: Problem 5 – extricating the government from Iraq.

While there remain some defenders of the original decision to go to war with Iraq in 2003, it is unlikely that many of them can be found in the present Cabinet. Mr Brown’s problem here is to extricate Britain without seeming to be engaged in a humiliating withdrawal. The strategy is clear: to declare the mission a success, and to bring the troops home. Some of the difficulties with that strategy are revealed by the hand over of responsibility for security in Basra province – one of the most British responsibilities - to local Iraqi forces in December 2007. In one of the understatements of the year the Foreign Secretary, David Miliband, acknowledged at the handover ceremony that the British were not handing over ‘a land of milk and honey.’ What is being left behind is large scale killing of women for ‘immorality’ – ie breach of traditionalist rules about such matters as wearing the veil. What is also left behind is a well armed Shia militia – probably better armed than the Iraqi forces nominally in charge. Iraq is undoubtedly the biggest of Mr Brown’s problems viewed in terms of its human impact; but viewed solely in the cold language of electoral calculation it is probably the most manageable. His critical task will be to get troops home, and above all to get troop casualties off the news headlines, well before he has to fight an election. What happens to the people of Iraq following troop withdrawals will probably not then not be a major influence on the British electorate.

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