Simon Nixon writes a weekly column, City View, for MoneyWeek magazine. If you are not already a subscriber, click here to sign up for a free three-week trial.
My biggest mistake over the summer was not to follow the example of the rest of the country and leave my copy of Alasdair Campbell’s diaries in my hotel bedroom. Instead I ploughed through all 750 pages of this deeply unreliably account of the Blair years. I can’t say I learned much from the ordeal, but what struck me throughout was Blair’s obsession with “strategy”. The word turns up throughout the book and what it turns out to mean is not so much setting policy goals and then devising a method of implementing them, but carefully framing your response on every policy dilemma in terms of what would be likely to cause maximum difficulty to your opponents.
Gordon Brown was supposed to be the master of this kind of strategy – what you and I would more accurately call tactics. Certainly, he played his hand well in his first 90 days, when he so successfully positioned himself as the resolute leader of the nation in troubled times that he built a 10-point lead in the polls. But then, inexplicably, he forgot the whole point of the exercise: he failed to press home his advantage. He was like a poker player who dithers too long before making a bet. Opponents can sense the fear and know that all they have to do is raise the stakes and he will fold.
Brown’s decision to fold over whether to call an autumn general election changes the political landscape almost as much as if he had decided to go ahead – and in ways that could have huge ramifications for the country. For a start, Brown’s reputation has taken a hammering. In the City, where everyone is a poker player of sorts, his failure to make the most of such a strong hand raises big questions over his credibility. That’s particularly worrying at a time of financial instability. In a crisis, confidence in the people taking decisions is vital. The government – wrongly in my view – managed to escape lightly from the Northern Rock debacle. But that verdict may now be reassessed in the light of the last two weeks. If there is a recurrence of this summer’s financial volatility, will people still feel confident in Brown’s judgment?
On the other hand, business and the City will certainly welcome the return of competitive politics. For much of the last decade, Labour took business for granted, knowing it faced no credible opposition. But that has changed. Earlier this week, George Osborne, the shadow Chancellor, acknowledged in an interview with the Financial Times what I wrote here last week: that the Tories had a lot of work to do to rebuild their relationship with the City. His pledge to make tax cuts for business a priority shows the Tories are at last serious about showing they can be trusted to run the economy. That is bound to produce a response from Labour, which won’t want to give up their lead on economic competence. For business and the City, that means there is now a real opportunity to advance their agenda, not just on tax, but on other key issues such deregulation and the woeful state of our infrastructure.
Still, the biggest impact of Brown’s election wimp-out could be felt for years to come not just in Britain but across Europe. Brown’s true attitude to the European Union has never been entirely clear, since it has inevitably been bound up in “strategy”. One manifestation of that has been that Brown has yet to meet Commission president Jose Manuel Barosso, three months after taking office, unlike the German and French leaders who met him in their first week. Now in the next two weeks, he must take the huge strategic decision of whether to sign the new EU constitution – and whether to try to ratify it without a referendum, knowing that this is likely to prove hugely unpopular. That’s a decision he can’t escape.
The danger is that Brown will now attempt to shore up his weak political position by cranking up his hostility towards the EU. Privately, EU officials have admitted to me that Brown’s apparent indifference to the EU is already undermining their efforts to drive forward the development of the single market, threatened anyway by resurgent French nationalism. The current EU Commission has made huge efforts to stand up to the protectionist impulses of other national governments and push ahead with liberalisation. But the intellectual and political drive behind this effort has come from the UK. Without that, the EU will lose that impetus – and with it, any ostensible purpose. The consequences for the EU – and British business – could be huge.
The challenge for the Tories now is to resist the temptation to grab headlines with populist political stunts and show they can be trusted to run the country. Brown’s own tactical failures have made their very much job easier. Now that he has exposed the cheap political trickery and philosophical vacuity at the heart of new Labour, he has made it safe to advance a coherent Conservative agenda once again. That has become abundantly clear over the last two weeks. One former member of Margaret Thatcher’s cabinet told me the recently key to her government’s success was that every member of it could finish each other’s sentences. That wasn’t possible among the shadow cabinet two weeks ago. Now it might be. That’s the difference between tactics and strategy.
Simon Nixon writes a weekly column, City View, for MoneyWeek magazine. If you are not already a subscriber, click here to sign up for a free three-week trial.