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Darling End for New Labour? The British Budget


A Darling End for New Labour? The British Budget

By Binoy Kampmark

When a figure of conservative propriety as Mervyn King, governor of the Bank of England, desires what amounts to government control over banks, one that exceeds mere partial or public ownership, the political fault lines must be changing.

Who could this be, speculates a journalist for the BBC, Joe Pienaar. Karl Marx with dusty theories of capital, revised for modern consumption, or perhaps former Labour leader, Michael Foot, famed walking obituary of his party and author of suicide notes masquerading as party manifestoes?

Well, it’s neither. The same might be said for British Chancellor Alistair Darling, whose measures are far from Marxist. Nor do they necessarily smack of Foot-like inevitability before the fall, as much as conservative commentators would wish that to be the case. This is, after all, a “national emergency,” or so goes the common wisdom of the day. That, in turn, overturns what amounted to previously accepted orthodoxies.

The Darling measures seem, on paper, to be considerable, though even now, they are seen by some to be insufficient to stop the pervasive rot that has set into the system. Massive borrowings to cope with ailing economic decline (debt is good); slashes in the value added tax (VAT) to trigger a spending drive, and, the inevitable, dreaded tax increases on the wealthier to off-set the program. (What counts as wealthy in these financially fluid times? Probably those in the £150,000 bracket.)

The Tories are bewildered, not entirely sure how this propelling towards traditional categories implies. In one sense, they are thrilled by what seems to be historical repetition. Big debts are manna for their political armory, while future tax rises promises them potential electoral gains.

In the words of a delighted Shadow Chancellor, George Osborne, Darling was “giving £20bn in giveaways and taking back £40bn in higher taxes, including a major rise in National Insurance, a tax on the jobs and incomes of middle Britain.” All Labor chancellors, suggests Osborne, eventually return to their tested ground: the domain of profligate spending that is bound to send a country to the “verge of bankruptcy.”

But Osborne is more than a little disingenuous. Does he even know what the “middle class” is? More to the point, for years in opposition, British conservatives have been lamenting how a cunning and merciless Blair appropriated their political ground (without just compensation). They even produced an ersatz Blair, David Cameron, with the dim aura that accompanies those assembly line products of public relations.

Whatever Gordon Brown’s flaws, and he has many, his solidity and stewardship come across as impressive to some voters, and it’s rapidly eating into Conservative party gains in the polls. The Tories were stunned and embittered by the endorsement by many EU countries, and the US Treasury, of Brown’s capital injection formula, something they instinctively opposed.

Do these fiscally expansive moves imply a death of New Labour? Not necessarily. With figures such as Gordo and Peter Mandelson, it’s hard to see how the tag of ‘New’, while withered, will be dropped. The totemic reverence of the financial sector, the key aspect of New Labour’s policies since 1997, may have ceased to be totemic, but it is no less revered. Redistribution in the Brown scrapbook does not necessarily suggest socialist pandering or a return to bruising card-carrying unionists ascendant before vicious capitalists. Besides, such measures are considered temporary. They may work, or they may not. Besides, as one Brown cabinet minister put it to Pienaar, “We’ve always been redistributionist. Look at tax credits.”

Binoy Kampmark was a Commonwealth Scholar at Selwyn College, University of Cambridge.

ENDS

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