Inside Story

Labour’s moral credit crisis

Incumbency provides great electoral and political advantages to governments, but it can also be a fatal burden, writes Frank Bongiorno in London

Frank Bongiorno 4 March 2009 2321 words

Barack Obama and Gordon Brown talk as they stroll from the Oval Office along the Rose Garden last Tuesday: little of the gloss of Obama’s victory has rubbed off on Brown. Ron Edmonds/AP Photo

ONE MATTER seems to have quietly resolved itself in recent months in Britain: we are now living in the “last days” of the Labour government. The shift in the language of public commentators has been subtle, but nonetheless clear. Take Labour-leaning Polly Toynbee in the Guardian. In a recent op-ed piece she remarked, in a most matter-of-fact way: “Perhaps only when looking back and comparing what happens next will history form its definitive view of Labour’s thirteen years.” Although she doesn’t say it in so few words, she does seem to be taking it for granted that the story of New Labour is now one with a beginning, a middle and an end – and that end is nigh.

Yet just last August she decided to buy into Labour’s continuing leadership war by proclaiming foreign secretary David Miliband the man of the moment; or, to quote her directly, “the man with a plan to take the fight to the Tories, the man to free the party from the bondage of disastrous leadership.” While this judgment now looks plainly silly – I reckon it looked silly enough at the time – it’s more significant that Toynbee now appears to be taking it for granted that neither Miliband nor Brown will be leading Labour into the promised land of a fourth term.

But not, apparently, Lord Mandelson, the Business Secretary, recently wheeled back into the government by his old enemy, Gordon Brown, to bolster its fortunes. He came out all guns blazing in the customary manner on the weekend, warning opponents of the government’s latest brainwave – to go where even Margaret Thatcher feared to tread and partially privatise the Royal Mail – that they risked undermining the government’s chances of re-election. He evidently thinks Labour’s still in with a chance; or, at least, is prepared to say so in order to overcome opposition to his policy. And, in the same interview, he condemned as “obscene” the actions of Sir Fred Goodwin, former chief of the debt-ridden Royal Bank of Scotland, in taking with him £693,000 annually.

This is the same Lord Mandelson who – as humble Peter – once proclaimed New Labour “intensely relaxed about people getting filthy rich.” You do have to ask yourself why, in the circumstances, they’re persecuting poor Fred and others like him, such as the head of Royal Bank of Scotland’s United States operations, whose pension will be a startling £1,400,000 each year. Here are wizards who entered fully into the spirit of New Labour, striking the deals that put the “Great” back into Blair’s Britain and the capital C back into the City. You can hardly expect them to walk away with a watch and chain.

And here, perhaps, lies the nub of the problem that faces the Brown Labour government, as it contemplates the most unlikely prospect of re-election: its utter lack of moral standing on the most pressing issue of the times, the global financial crisis. Not so very long ago, Sir Fred was a trusted adviser to the prime minister. Now he’s Public Enemy Number One. Not long ago, the likes of Blair, Brown and Mandelson were celebrating as they extended Britain’s light-touch financial regulation; indeed, they were using it to persuade the world’s investors what a jolly place the United Kingdom was to put their money. It was no business of government to examine a financial institution’s business model, or whether they were handing out credit to people who would need to work until they were 101 to pay it back. Now, the very same politicians are talking regulation. Not so very long ago, New Labour’s political elite were pooh-poohing the idea of restraining executive salaries. Now, they preach restraint to failed bankers, as if their lack of success somehow imposes a set of moral obligations that didn’t exist while they were bringing in the squillions. The gentlemanly capitalists of last year are apparently the cads and bounders of today. The banker has replaced the paedophile in public esteem and – it might be added – in the attentions of those who produce screaming tabloid headlines.

On a generous reading, the new moral responsibilities that apparently attach to being a filthy rich banker might be the extension of the government’s cherished idea of mutual obligation beyond single mothers, the unemployed and the disabled to a new and unaccustomed cohort. It seems only fitting that those whose activities are now being funded by the British taxpayer should be doing something in return, and most would be pretty hopeless at digging holes or serving soup in homeless shelters. After all, we don’t want to promote all that moral flabbiness that used to disfigure this sceptred isle before Mrs Thatcher cleaned it up in the 1980s. Accepting a salary that’s thirty rather than sixty times as large as that received by most of the rest of us is perhaps a form of community service.

But on a less generous and more realistic reading, the politicians’ latest bout of hand-ringing about those evil bankers amounts to old-fashioned chutzpah. And that’s why so little of the gloss on Barack Obama’s victory in the United States has so far rubbed off on Brown. And it’s also why in Australia, the financial crisis has ultimately strengthened the Rudd government and knocked the Coalition off-balance. When these still new regimes talk about market failure, regulation, the evils of greed and the need for restraint and moral responsibility, they do so with a modicum of plausibility, whatever their past beliefs or statements. It’s the difference between having been in government and therefore having “form,” and not being in government and so merely talking about it.

Yet when those still in power, who proclaimed yesterday’s greed the epitome of enterprise, now go on to call today’s greed an obscenity, it’s pretty hard to take them too seriously. And when their strategy for dealing with the financial crisis – however sound or defensible it might be economically – amounts to plunging billions of taxpayer pounds into banks that still seem to be allowed to do pretty much as they like, they’re not likely to win any popularity contest.

THE IRONY of Labour’s dilemma is that its own lack of moral standing is at the heart of its problems. It’s apparently taken some key sections of Britain’s commentariat some time to twig to this subtle but overwhelming point. Toynbee’s August 2008 analysis of the prospects for Labour of a Miliband leadership is a case in point. Journalists, in Britain no less than in Australia, seem mesmerised by the idea that a change of leadership holds the key to a shift in the fortunes of political parties. Sometimes, it’s undoubtedly true. But it’s less likely to be true when a government’s been in office for well over a decade and acquired as much baggage along the way as the Labour government of Great Britain.

After all, if Labour is indeed defeated next year, it will have had a pretty good innings: it will have been in power for as long as the Tory governments of the 1950s and early 1960s, for instance. In modern British politics, only the Conservative governments of the 1980s and 1990s have been more electorally successful.

When I arrived in Britain in 2007, I was initially intrigued by the parallels between the last days of the long-serving Howard government in Australia and the quagmire into which the Brown government seemed to have wandered. Superficially, the differences between the two situations were clear enough. In Australia, the long-standing rivalry between prime minister and treasurer had been resolved in favour of prime minister. I recall Tony Blair – only half-jokingly – expressing admiration for the way in which John Howard had managed to perform this piece of fancy footwork. In Britain, of course, Blair had been forced to stand aside for Brown, and for a time it seemed as though something which, at a stretch, might pass for fresh leadership could help revive the fortunes of a government that seemed at their nadir.

But there were also some striking similarities between the emerging Brown prime ministership and Howard’s last days. Quite apart from the obvious point that they both came to trail badly in the polls, no one appeared to be listening to what either leader had to say any more. Their mouths were moving and sounds were coming out, but that’s all. Political judgement, moreover, seemed to have deserted both men at critical junctures; for Howard over WorkChoices, for Brown over the abolition of the 10p tax-rate. Indeed, every initiative designed to show that there was life in the old boy yet, every cunning plan for re-election, every attempt to re-capture the moral authority of happier and more prosperous times, seemed to backfire. Luck which had once run all in the direction of each government, leaving the Opposition floundering and embarrassed, now deserted it. Brown could hardly have been personally responsible late in 2007 when a junior civil servant downloaded the complete child benefit database from the computer and sent it through the post, resulting in the embarrassing loss of computer discs containing the personal details of over seven million families. Yet the incident made his government look sloppy, plunging it into another round of damage control. Such is the fate of a government on the skids.

But most of all, these governments each carried a great deal of weight in the saddle-bag after so long in office, even before the political sea-change created by the credit crunch. For Howard, the misdeeds of times past seemed to catch up with him. The AWB scandal and Haneef affair revived memories of Children Overboard and other instances of meanness and trickery too numerous to mention. For Labour in Britain, there is the running sore of the Iraq War and associated matters such as the “sexing up” of intelligence and the death of the scientist David Kelly – all of which continues to hang like a London fog over this government. Even when the British general, John Cooper, proclaims – as he did this week – that British troops would be leaving Iraq a better place, having laid the basis for democracy there, critics of the government continue to wonder about the effect of the war on democracy (and civil liberties and human rights) here, in Britain.

The matter of whether the British Labour government colluded with the United States administration in the extraordinary rendition and torture of its citizens remains a running sore. Two government ministers, David Miliband and Jacqui Smith, have refused to appear before the British parliament’s human rights committee in connection with allegations of torture, and they have avoided answering all questions about them. In one case, that of Rangzieb Ahmed, three fingernails were missing from his left hand when he was finally deported to Britain, having been left for over a year to the tender mercies of Pakistan’s Inter-Services Intelligence Directorate. His lawyers are currently appealing a ruling that these were not removed during his interrogation. Another man, Binyam Mohammed, just transferred to Britain from Guantánamo, also alleges torture and accuses the British government of involvement. The government’s response has characteristically been less than straightforward. Miliband apparently prevented a British court from publishing details removed by civil servants from a particular document relating to the treatment of this man on the well-tried grounds of national security.

It is this kind of behaviour that has led to the persistent allegation that the British government remains a standing threat to civil liberties. Just last week, 1500 people attended a Convention on Modern Liberty held in central London and linked by video with parallel events elsewhere in the country. The concern animating participants was the erosion of civil liberties and a sense that the government had exploited a climate of fear in order to undermine traditional freedoms. Jack Straw, the Justice Secretary, made a spirited defence of his government’s record in the Guardian, calling talk of a police state “daft”, and contrasting the achievements of his government in this field such as the Human Rights Act with the abuses of times past.

And he has a point; it’s easy to imagine a worse balance between collective security and individual rights than that achieved by this government in the age of terror. Similarly, when we contemplate the current financial crisis and the Labour government’s contribution to it, it’s well also to recall the government’s substantial achievements in the social policy. One recent report found that on fifty-nine measures of social inclusion, forty had improved under Labour and only seven were worse than when it came to office in 1997. It’s doubtful whether a Conservative government would have done better.

Yet no amount of finger-pointing at the Opposition, and the Tories’ own lack of credentials on financial regulation, social policy and human rights, can alter the overwhelming burden of responsibility that incumbency imposes. Incumbency provides great electoral and political advantages to governments in so many circumstances – and for a while it did seem that Brown might be able to persuade voters that serious times did indeed demand serious people and that there was no one more serious than Gordon.

But not so today. Incumbency now imposes an inescapable and probably fatal burden on the Brown Labour government. •