{"id":4552,"date":"2008-09-06T22:19:59","date_gmt":"2008-09-06T21:19:59","guid":{"rendered":"http:\/\/rinf.com\/alt-news\/?p=4552"},"modified":"2008-09-06T22:19:59","modified_gmt":"2008-09-06T21:19:59","slug":"alistair-darling-and-the-implosion-of-the-labour-government","status":"publish","type":"post","link":"http:\/\/rinf.com\/alt-news\/latest-news\/alistair-darling-and-the-implosion-of-the-labour-government\/","title":{"rendered":"Alistair Darling and the implosion of the Labour government"},"content":{"rendered":"

By Chris Marsden<\/a> | The August 30 Guardian<\/em> interview with Britain\u2019s Chancellor Alistair Darling was extraordinary in many respects. In the first place there can be few occasions that so dramatically reveal the sense of profound crisis within ruling circles in Britain.<\/p>\n

Darling admitted to Decca Aitkenhead that the economic times we are facing \u201care arguably the worst they\u2019ve been in 60 years… And I think it\u2019s going to be more profound and long-lasting than people thought.\u201d<\/p>\n

Within 24 hours, he was accused of undermining confidence in Britain\u2019s economy to such an extent that the pound hit a record low against the euro and a two-year low against the dollar. The FTSE 100 shares index also fell sharply.<\/p>\n

Darling had committed the cardinal sin of stating openly, if still guardedly, that economically things are really bad and likely to get worse. His choice of 60 years was somewhat arbitrary. He could not mention the 1970s as many have done without raising the spectre of mass movements of workers bringing down governments. And references to the hungry thirties were similarly beyond the pale. But even such a partial acknowledgement as his was considered a serious blunder, even though only last week the Bank of England\u2019s deputy governor, Charles Bean, had warned that the economy is facing a period \u201cat least as challenging\u201d as the 1970s.<\/p>\n

Ian Stannard, a senior currency strategist at BNP Paribas, told the press, \u201cMost people believed that things were probably deteriorating faster in the UK than the government was admitting, but the fact that we\u2019ve seen the chancellor come out and admit that things are far worse have put sterling under pressure.\u201d<\/p>\n

The reaction was swift from both the government and the media. Prime Minister Gordon Brown instructed Darling to make a humiliating explanation of how he had been misinterpreted and was in fact focusing on the \u201cunique problems\u201d facing the \u201cglobal economy.\u201d Brown\u2019s own speech to the Confederation of British Industry delivered Thursday was leaked in advance, in which he again emphasised that the problems facing Britain are international in origin, centering in the credit crunch, and that Britain was in fact well-placed to weather any downturn.<\/p>\n

One senior Labour figure declared baldly to the Guardian<\/em>, \u201cAlistair must be insane. There is no rhyme, nor reason why he would want to talk like that.\u201d The Financial Times<\/em> declared scathingly that his \u201cprognosis\u201d on the economy \u201cis too bleak,\u201d whereas his fretting about the state of the Labour government \u201cis nowhere near bleak enough.\u201d<\/p>\n

The ferocity of the reaction to Darling\u2019s comments itself belies such efforts to belittle his estimation of the gravity of the economic crisis. Even as they were being made, reports were published that the British economy was at a standstill in the second quarter of the year, after a revision of figures wiped out the 0.2 percent growth reported earlier. The number of permanent jobs available had also plunged to its lowest level since 2001, with unemployment rising by about 70,000 this year and predicted to hit two million by Christmas. The manufacturing sector shrank for the fourth month in a row.<\/p>\n

Mortgage approvals fell to 33,000 in July, the lowest since data was first collected in 1993, with the number of new mortgages issued down 71 percent in a year. House prices fell in August for the eleventh consecutive month and are now falling at an annual rate of over 10.5 percent.<\/p>\n

Even as Darling was being decried for his candor by the Telegraph<\/em>, the newspaper published an estimate by one of Britain\u2019s foremost economists and former Bank of England policymaker, Charles Goodhart that \u201cBritain is now facing a severe recession which will last for a year or longer and a worse housing crash than in the early 1990s\u201d. Two days later, the Organisation for Economic Cooperation and Development (OECD) predicted recession for Britain, even while the other G7 countries will see either modest growth or a standstill.<\/p>\n

If all that Darling\u2019s interview confirmed was the dire state of the economy it would be interesting enough. But the chancellor\u2019s comments provided a revealing glimpse into the deep sense of crisis gripping a Labour government that is on the verge of implosion. His interview reads like a cry of despair by someone who does not want to carry the can for Labour\u2019s failure, but apart from this sees no way out.<\/p>\n

\u00a0<\/p>\n

Labour\u2019s worship of the market<\/strong>\u00a0<\/p>\n

The government\u2019s mantra, echoed here by Darling, that it is merely the victim of an unfavourable international situation should be opposed on many fronts. New Labour earned its place in power by breaking with reformism and embracing Thatcherite economic nostrums. It was the political vehicle through which big business set out to impose a discredited economic and political agenda on a hostile population.<\/p>\n

With the Conservatives hated and unelectable after 18 years in power, it was Labour under Tony Blair and Gordon Brown that came in to continue where Margaret Thatcher and John Major had left off. Labour insisted that capitalism was not only triumphant, but that there was also no alternative to it. It was the best of all possible worlds, provided only that government abandon all attempts at national regulation and recognise the economic and political imperatives of globalised capitalist production and the need to be internationally competitive.<\/p>\n

To this end old-style reformism must give way to government in partnership with corporate management, wholesale privatization of state assets and public services and unbridled speculation by the City of London presided over by a Bank of England set free from governmental control. Above all workers should heed the message from the government and their allies in the trade union leadership\u2013that the class struggle was a thing of the past and participation in creating a globally efficient economy would raise all boats.<\/p>\n

For ten years, this provided the ideological justification for Labour facilitating by every possible means a historically unprecedented transfer of societal wealth to the super-rich. With the actual wages and purchasing power of working people in constant decline, and vital social services being gutted, Labour became ever more alienated from its former working class supporters. But it was able to maintain power to the extent that a speculative boom in house prices and a flood of credit allowed people to live well beyond their actual means.<\/p>\n

Once this speculative boom burst internationally, it was inevitable that it would hit the British economy hardest of all and would signal the end of the Labour government.<\/p>\n

The biographical material on Darling contained in Aitkenhead\u2019s interview is sketchy, but revealing in painting a portrait of someone who was an ideal New Labour apparatchik.<\/p>\n

She notes that while \u201cA blaze of glitzier New Labour stars have since fallen… Darling survived, accumulating five ministerial posts on a stainless ascent to the exchequer last year. His career had been distinguished by an almost freakish absence of failure. He has never lost an election, he joined the front bench after just 12 months in parliament, and 20 years later he has never left. Only two other members of that first cabinet, Gordon Brown and Jack Straw, are still in government with Darling today.\u201d<\/p>\n

This rise to prominence is incredible because Darling\u2019s own statements make clear that he is a political zero\u2013someone with no connection to the Labour Party, old-style reformist socialism or the working class. Both his grandfathers were Liberals, his great-uncle a Tory MP in Edinburgh, and his father, a civil engineer, voted Conservative. He was educated at a private boarding school before studying law at Aberdeen where he stood for election in the student union, \u201cbut not for a party.\u201d<\/p>\n

He only joined the Labour Party 1977. This was a year during which Labour was in coalition with the Liberals and imposing IMF-dictated austerity measures that met with fierce resistance from the working class and ended with the 1979 \u201cWinter of Discontent\u201d and the election of the Conservatives. Darling\u2019s response? \u201cThe Labour government in 1977 was in a terrible mess, and I was getting fed up looking at all these things on the television, and thinking, God, surely we can do better than that. I wanted to do things. But I was never really interested in the theory of achieving things, just the practicality of doing things.\u201d<\/p>\n

Later he tells Aitkenhead, \u201cHe doesn\u2019t call himself a socialist\u2013\u2018There\u2019s nothing wrong with the term, it\u2019s just not one I use\u2019\u2013and feels uncomfortable with political labels. Class envy is a mystery to him; he sees no point in raising taxes for the super rich, because, he says, it wouldn\u2019t raise much revenue. \u2018I\u2019m not offended if someone earns large sums of money. Is it fair or not? It\u2019s just a fact of life.\u2019 Asked to define his politics, he offers, \u2018Pragmatic\u2019.\u201d<\/p>\n

\u00a0<\/p>\n

The party\u2019s over<\/strong>\u00a0<\/p>\n

Like his colleagues, it was precisely Darling\u2019s \u201cpragmatism,\u201d his hostility to socialism, absence of \u201cclass envy\u201d and relaxed approach to fabulous private wealth that made him so successful for so long. He was ideal material for government as far as the Labour Party and its backers were concerned because was ready to do whatever he was told, unencumbered by any extraneous ideological baggage.<\/p>\n

He was in effect a true and unalloyed believer in capitalism.<\/p>\n

That is why, as he states, \u201cFor 10 years as a minister, by and large I had a charmed life.\u201d<\/p>\n

And that is also why all this changed by the time of that fateful day in June last year when he was appointed chancellor by Brown, as Labour was attempting to distance itself from the Iraq war and the sordid record of Blair\u2019s premiership. Instead, as his wife states, his life has been \u201ca crisis a week.\u201d<\/p>\n

In an extraordinary passage, he states that although \u201cwe knew the economy was going to slow down\u201d: \u201che hadn\u2019t the faintest inkling of the financial crisis about to unfold before him. \u2018No, no one did. No one had any idea\u2019.\u201d<\/p>\n

\u201cHe can clearly recall the day last summer when alarm bells first began to sound. The chancellor was on holiday with his wife and their two teenage children in Majorca. \u2018I remember I picked up the FT<\/em> in the supermarket, as you do, and it had the European central bank starting to put money into the economy. I phoned the office to ask why they were doing quite so much. It didn\u2019t surprise me that money was going in\u2013there was concern going around\u2013but it was the sheer scale of it. I said, what about our institutions? This was when Northern Rock started to figure.\u201d<\/p>\n

\u201cEven then,\u201d Aitkenhead continues, \u201cthe gravity of the credit crunch was still not fully clear. \u2018No one knew how serious it was yet\u2019,\u201d she quotes Darling saying.<\/p>\n

What then is the future for a party that was so enamoured of capitalism that the man it appointed as chancellor was apparently so blissfully unaware of an unfolding financial disaster sweeping the world economy?<\/p>\n

Aitkenhead states that today, \u201cthe mood is so febrile, it\u2019s even possible he won\u2019t be chancellor by the time this interview appears.\u201d<\/p>\n

As for Darling, he doesn\u2019t want a cabinet reshuffle that may see him replaced\u2013\u201cFrankly, if you had a reshuffle just now, I think the public would say, Who are they anyway? You name me a reshuffle that ever made a difference to a government, actually.\u201d Nor does he want a leadership challenge against Brown, even though he makes clear he has little hope of winning the next election.<\/p>\n

\u201cThis coming 12 months,\u201d he declares, \u201cwill be the most difficult 12 months the Labour party has had in a generation, quite frankly. Both the general economic situation, and in terms of the politics. In the space of 10 months we\u2019ve gone from a position where people generally felt we were doing OK to where we\u2019re certainly not doing OK. We\u2019ve got to rediscover that zeal which won three elections, and that is a huge problem for us at the moment. People are pissed off with us.\u201d<\/p>\n

Whatever Darling might wish for, there is little chance that Brown will survive the next months unscathed, less chance still that Labour will win an election under any leader whatsoever, and a distinct possibility of the party imploding. As if to underline such political realities, even as the government was attempting to recover from the damage inflicted by Darling the former home secretary Charles Clarke was busy telling the BBC that Labour is facing \u201cutter destruction\u201d at the polls and insisting that Brown must either improve the standing of Labour within a few months or resign as prime minister.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Chris Marsden | The August 30 Guardian interview with Britain\u2019s Chancellor Alistair Darling was extraordinary in many respects. In the first place there can be few occasions that so dramatically reveal the sense of profound crisis within ruling circles in Britain. Darling admitted to Decca Aitkenhead that the economic times we are facing \u201care […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18,1615],"tags":[55],"class_list":{"0":"post-4552","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-latest-news","7":"category-uk-news","8":"tag-uk-news"},"_links":{"self":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/4552","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/comments?post=4552"}],"version-history":[{"count":0,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/4552\/revisions"}],"wp:attachment":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/media?parent=4552"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/categories?post=4552"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/tags?post=4552"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}