Gordon and the fine art of losing friends

On 27 June 2007, when Gordon Brown went to see the Queen, he had not won a general election campaign or seen off his Labour rivals in a leadership contest. Brown was not the leading candidate to become Prime Minister, but the only candidate, the uncontested crown prince, a suitably monarchial figure at the gates of Buckingham Palace.

We forget how dominant he seemed. Uncontaminated by the grubby business of struggling for votes, Brown could stand above party politics as the father of the nation. From the right, Margaret Thatcher came to tea at Downing Street and the editor of the Daily Telegraph became his new best friend. From the left, trade unions welcomed him as a refreshing change after Tony Blair. Editors still confined reports about finance companies with strange debt vehicles to the business pages in those days.

It’s easy to be all things to all men when the economy is booming. When it turns, you learn who your friends are and Brown has found he has precious few. ‘Tories for Labour’ was a short-lived political movement; Baroness Thatcher hasn’t been back and the editor of the Telegraph has drifted right. Meanwhile, the unions are stirring.

I don’t want to exaggerate the revival of militancy. Compared with the mass walkouts of the Seventies, today’s protests are more like a sickie than a strike. A contact at the TUC put it all into perspective when he rolled his eyeballs at last week’s ‘Summer of Discontent’ headlines. ‘That’s the one cliche the Murdoch press has never fired a sub for using,’ he muttered.

Yet the threat that the golden era of low inflation and high employment may soon be over is toughening up workers for the same reasons it is making the government look old and unable to cope with harder times.

Before the economic crisis began, a strike by the National Union of Teachers would have flopped. Not only politicians but also many in the trade union movement had learnt to look on it contemptuously. Their disdain would have been strengthened by the sight of a member of the executive crying at a rally in Bristol on Thursday that Brown was ‘dragging young teachers into poverty’ and Birmingham activists breaking into a chorus of: ‘I’d rather be a picket than a scab.’ These were yet further examples of the union succumbing to its persistent fantasy that tweedy teachers can replace muscle-bound factory workers and become the new vanguard of the proletariat.

Indeed, when the NUT called for a strike, the other teaching unions shrugged their shoulders. Far from forcing impoverished teachers to subsist on bread and dripping, they said, Labour had given them above inflation pay rises for years. Admittedly, the current settlement was low, but independent reviewers had approved it.

NUT members appeared equally unenthusiastic. Only one-third bothered to vote in the ballot. A fiasco seemed inevitable. In the event, thousands of teachers turned out and a happy NUT is certain that they did so because of inflation. According to the government’s measure, it stood at 2.4 per cent at the time of the pay offer and that, said the teachers, was a penny-pinching underestimate.

Journalists are talking great deal of tosh about the government’s inflation figure. They are presenting the consumer price index as a kind of con – when it is used across Europe – and claiming it discriminates against the middle classes because it doesn’t include school fees, when the overwhelming majority of the middle class don’t pay school fees.

If anything, it discriminates against the low paid because it is not adequately reflecting the rising costs of food, fuel, gas and electricity, which no one can do without however hard they scrimp.

Labour has no hard-won experience to help it cope, as it hasn’t confronted inflationary pressures since it came to power. Cheap goods from China kept prices down.

The boys in the City could keep spending their bonuses and the Treasury could pump hundreds of billions into the public sector without fear of a price explosion.

Now demand from China’s growing number of wealthy workers is pushing up food prices while the thirst of Chinese and Indian industry for oil is pushing up the cost of fuel. The rise of China is taking Labour, and us, into a new world and it is not only teachers who don’t like the look of it.

Lower down the social ladder, poorer workers have more reason to be worried. Last week, the GMB held a meeting of shop stewards to judge whether dustmen, hospital porters, ambulance drivers and cleaners were ready to walk out. As always, they were reluctant to strike. Even if the management backed down, they reasoned, the rise they won may not cover the loss of wages.

Despite the lack of enthusiasm for a confrontation, there were ominous growls. Brown’s decision to tax the working poor so he could give a meagre, barely noticed bribe to the middle class was as unpopular as you would expect. Even more so was the rescue of the banks. If there was money for them, why isn’t there money for us? delegates asked. If bankers are relying on welfare payments from the state, will the state insist that bankers’ pay rises are kept as low as ours?

These are good questions, which once again Labour has no experience of resolving. The party’s dominance of modern politics began when the pound crashed out of the ERM in 1992 and the long boom started. Labour became so used to profits from the City providing the money for its vast programmes of public spending and redistribution of wealth that it forgot that when the authorities let financial bubbles grow to bursting point, the public is forced to redistribute its wealth to bankers.

Although political writers have insisted for a decade that Labour had to decide which side it was on, it found it easy to be all things to all men when the economy was growing. Gordon Brown used to be able please the editor of the Telegraph and the general secretary of the TUC. He must now be wondering whether he can please either.

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