THE request from a journalist for a “soft profile interview” can be dangerous for any politician. When that politician is one who has had a bad personal press recently, the risk becomes deadly. Alistair Darling’s conversation with his houseguest from The Guardian was, from a political communications perspective, calamitous. And judging from the plummeting pound, it was not very smart in economic terms either.
Thoughtless chatter is the last thing we need. We are living in perilous times. Shock waves that started in suburban America have been coursing through the world this past year. Unfettered markets and neo-liberal economic policies have failed and the consequences are so severe that Darling described the looming recession as the worst economic downturn for 60 years. We shall have to wait to see if the Government’s measures to protect the low paid and those at most risk reflect the seriousness of his dire warnings. I am prepared to be surprised, although so far the familiar refrain on keeping public sector wages low in order not to fuel inflation doesn’t fill me with confidence. As everyone should know, inflation is not being fuelled by wage demands and wages should not be held down because of inflation.
In the meantime, the Prime Minister needs to do three things. First, his economic package for recovery needs to be clear, comprehensible and communicable. And it should include a windfall tax on the energy firms which are making huge profits while ordinary people struggle to pay their fuel bills. Embracing the campaign for a windfall tax need not be a sign of weakness. Rather, it would be a sign of strength for Labour to stand up to big business, whose representatives would undoubtedly squeal and try to hold us to ransom by threatening to shift their money abroad and stop investment in this country. However, the oil companies’ profits are estimated at a staggering £11 billion. Big business and the super rich are taxed lightly in this country. And they have been exploiting tax exemptions and loopholes for years. It’s time to call their bluff.
The case for doing this is self-evident. Domestic customers have been hammered with increases in energy prices – an average of £400 since the beginning of the year – while oil companies are making enormous profits. BP alone is currently making £37 million a day. Provided that people understand the money is to be used to alleviate fuel poverty and kick-start investment in alternative and renewable forms of energy, the majority will accept a windfall tax.
Brown’s economic package should also include measures to control the price rises introduced by the private companies running public utilities, since it seems as though unaccountable regulators have been asleep on the job. The Prime Minister also needs to give help to mortgage payers. Recently, there has been the amazing spectacle of bankers being given the benefit of socialist-style handouts, while mortgage payers are left to the mercy of the markets.
Brown is going to have to come up with a barnstorming speech at the Labour Party conference if he is going to keep his job. He could use this is as an opportunity to remind people what the Labour Party was created to do and what the alternatives are. He should also reshuffle his Government and dispense with the services of the ultra-Blairites who would seek to prevent him achieving these goals.
But if the economic crisis has sent financial shock waves through the capitalist world, then recent events in the Caucasus have caused tremors that have shaken it to its very foundations. The rank hypocrisy of British and American politicians demanding that the Russians respect international law is sickening. The moral high ground has been squandered with the invasion of Iraq.
While political capital can be made on a windfall tax, sanity must prevail with regard to Russia and Georgia and we must resist the temptation to believe that sabre-rattling will reap dividends. Rather, our relationship with the United States would benefit from a bit of distance instead of blind supplication.
Generals seem to have a better understanding of history. At least Sir Mike Jackson does. In a thoughtful article in the August 17 issue of the Sunday Telegraph, he argued persuasively that strategic military hostility and confrontation must remain a thing of the past. The West, he said, “needs a better understanding of Russia’s behaviour and concerns”.
Sadly, Foreign Secretary David Miliband, in particular, appears to have gone on some sort of neo-conservative rampage. If there is to be a leadership challenge to Gordon Brown – and I don’t think there should be – Miliband would do well to remember that in last year’s election for Labour’s deputy leadership, the victor, Harriet Harman, apologised for the war in Iraq. The Foreign Secretary’s belligerent attitude may yet lead to his leadership ambitions being buried in the Caucasus.
