Cicero Policy Briefer

Issue 19, December 2007

And it started so well…

By Terry Paul

And it started so well for Labour: King Tony abdicated and went on long-term sabbatical to the Holy Land, then the pretender Gordon mounted the throne!

As one reviews the Brown Government’s performance in 2007, one is torn between writing that its recent woes are merely the early birth pangs of a new government—or that we have reached a tipping point in its electoral credibility.

Over the past few weeks many such ‘tipping point’ articles have been written. A large quantity of these have been what I term sloppy political commentary, simply throwing hands up in the air and shouting, “That’s it, it’s all over.” But then, what is one to think when we have Donorgate, the missing HMRC discs, Northern Rock et al?

The Prime Minister has spent many years preparing for Government, honing his political ideas and installing a coterie of trusted advisors to think strategically about economic stability and social justice. But what has changed the sure-footed performance of the Brown Government over flooding, foot and mouth, bird flu and terrorism to the situation we have today?

The first problem with the Government was the ‘General Election that never was’. Don’t believe the hype that it was the media that fanned the flames: that election train had certainly left the station and the Labour Party machine was cranking into life, cancelling staff leave and working through the detail of election logistics.

But the opinion polls spooked Brown into cancelling the election and undermined his attempt to harness the ‘Brown bounce’ for a clear electoral mandate. The actual tipping points that forced the Brown hand could possibly have been twofold: Cameron’s “Speech Without Notes” at the Tory conference and Osborne’s tax proposals on stamp duty and inheritance tax, which appeared to capture the sentiment of Middle England—the very voter that Brown has courted so assiduously.

So why was Labour wrong-footed? Why did the polling come as such a shock, and why didn’t the Brown lieutenants detect the mood music? Did the Government fail to feel the pulse of the country and its ambitions, and if not, then why did Conservative tax proposals emerge later as “Labour policies” under Chancellor Alistair Darling?

The Capital Gains Tax changes, designed to curb the excesses of private equity, have ended up becoming a very bad piece of policy. Overnight, owners of second homes (including many MPs) became beneficiaries while SME entrepreneurs were put in a worse position, with the Government stating on the airwaves that was a good thing due to tax simplification. The CGT measures, rather than encouraging investment into small business and creating jobs in the economy, especially when we have a large numbers on Incapacity Benefit wanting to work, instead sent a signal via the tax system that encourages the purchase of second properties and a potential fuelling of the buy-to-let market.

But how did we get here? How did the Government manage to literally overnight destroy the business consensus so well built up by the Labour opposition’s Prawn Cocktail offensive of the 1990s, losing—however temporarily—the trust of the British public? My own view is that somewhere between the good intentions of the Prime Minister, the mills that are Government departments, the delivery/execution of policy and the cadre of Labour apparatchiks, something has gone amiss; the cold winds of opposition have been well forgotten.

Many will be writing prescriptions for Mr Brown and his government, so perhaps I’ll take this opportunity to offer my own: simply to remind Labour that their route out of the mire could be based on a past party mantra, “Leadership, not drift.”

Terry Paul can be contacted on +44 (0)20 7665 9533 or click here to email.

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