Archive for September, 2022

Labour conference 2022: The Mersey wind of change

28/09/2022, 11:08:56 PM

by Jonathan Todd

The turbulence around Labour conference was much more than the Mersey wind. Sterling hitting an all-time low versus the dollar. 900 mortgage deals pulled by banks and building societies. Criticism of last Friday’s “mini budget” from the IMF.

The collapse in sterling means rising inflation, higher interest rates, and more pain for already suffering households. Government capacity to ameliorate this is limited by higher borrowing costs than Greece and Italy.

Dramatic changes in the UK’s economic fortunes are often driven by global events. It was OPEC and the oil price in the 1970s. American subprime mortgages and collateralised debt obligations in the 2000s. It takes a special kind of budget to crash the economy outside of global events – such as Nigel Lawson’s tax cuts in 1988 that overheated the economy and precipitated the 1990s recession.

The Tories will try to blame our economic problems on global events (Covid-19 and Putin’s war in Ukraine). “Global financial markets,” said the Treasury’s statement in response to new purchases of government debt by the Bank of England, “have seen significant volatility in recent days.” That the Bank of England acted after the “mini budget” reveals blame much closer to home.

“Panics do not destroy capital,” according to John Stuart Mill, “they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works.”

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In all this chaos, Labour’s chance is now, at this conference. And we are still perfectly capable of making a pig’s ear of it

20/09/2022, 10:45:13 PM

by Rob Marchant

As every political journalist will tell you, this by-election or this conference is always the decisive one, the one which changes everything. Of course, it is a journalist’s job to make a story more interesting and engaging than it actually is. But in this case, that argument might just have a point.

Labour, under a leader nearly two-and-a-half years into the job, is in a decent place. Largely thanks to Boris Johnson’s long-overdue implosion and his replacement by a less-than-inspiring alternative PM, Labour is riding high in the polls. In normal times, he would be looking like a shoo-in for an election in two years’ time.

But these are not normal times, if anything has been remotely normal in Britain these last few years.

After Brexit, Covid and now a worsening economic crisis, we end up in the bizarre position of having changed both prime minister and head of state in the same week. The normally phlegmatic British public is now in an emotional place, with some perhaps even subconsciously reassessing this country, its place in the world, and what kind of a place we would like it to be.

In the midst of all this confusion, like an object randomly falling from the air, plops the 2022 conference season. No doubt, Liz Truss will be aiming to come out of it looking like a powerful, well-supported primus inter pares of an A-list team. This will be a challenge: as the Conservatives’ fourth leader during the last six years, the look is more like the dismal fag-end of a long period of one-party government. But it is up to Labour to make it so.

Turning to Starmer, we can see a creditable progress which has been made since the Corbyn nadir. The sixty-four million dollar question is, though, has Labour changed enough to be ready for government?

We might first look at history: last time Labour was out of power, it took twelve years to reinvent itself from its turning point, which we could reasonably claim to be Kinnock’s 1985 conference speech. Starmer has had just over two. So, if he has really managed the necessary turnaround, he has done it in double-quick time. Or rather, six times as quickly.

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