By-election will settle Brown's fate

Will Gordon Brown's determined fightback over the course of the past week be enough to save Labour in Crewe and Nantwich? And why is the contest beginning to resmeble another by-election battle in an old railway town some 25 years ago? Here's today's column in the Newcastle Journal.

***

The Queen’s Speech and the Budget are the pivotal moments of the parliamentary year, the points at which the government sets out its law-making programme on the one hand and its spending priorities on the other.

Traditionally, they have been held at opposite ends of the year – the Budget in early spring, the Queen’s Speech in late autumn.

This week, however, we had the almost certainly unique spectacle of a Budget and a Queen’s Speech effectively being unveiled within 24 hours of eachother.

It was perhaps a reflection of the strangeness of the political times we are living in, and the fact that, for Gordon Brown’s government, desperate times require desperate measures.

There are two ways of looking at Alistair Darling’s announcement on Tuesday of a
rise in tax thresholds to compensate most of those who lost out through the abolition of the 10p starting rate.

One is that for a Chancellor to have to come back to the Commons with what amounted to an emergency Budget within ten weeks of the original one is a fair old humiliation.

Furthermore, if the government now accepts that scrapping the 10p was a mistake, it has to go down as one of the most expensive mistakes in recent political history.

Raising the threshold by £600 for all taxpayers is costing the Treasury £2.7bn, all of which will have to be funded out of increased borrowing.

That said, there is a sense in which the government may have accidentally arrived at the right decision even if it was probably for the wrong reasons.

Pumping more money back into the economy via tax cuts is a fairly classical policy response to the sort of slowdown in economic growth which we are now experiencing.

From the point of view of family finances, the additional £120 a year for all those earning up to £40,835 a year will certainly help weather the rise in food and fuel costs.

Of course, the more sensible thing to have done would have been to put 1p on the top rate of tax to pay for all this, but that’s forbidden territory for New Labour.

So much for the emergency Budget – what, then, of the draft legislative programme – a Queen’s Speech by any other name?

Well, again, this may just be a case of serendipity - of a government almost accidentally rediscovering its sense of purpose in its desperation to avoid a shattering by-election loss.

The most damning accusation made against Mr Brown during the course of the 10p tax row was that it seemed emblematic of a government which had lost touch with people’s everyday concerns.

But ideas such as the new savings scheme for eight million low earners, more flexible working rights for parents and action to tackle underperforming schools seem to suggest the government has started listening again.

Meanwhile the plans to allow local communities to elect police chiefs and enable parents’ councils to help run schools show New Labour at last breaking free of control-freakery.

Both are nods in the direction of the local decentralising agenda which Darlington MP Alan Milburn has again hailed this week as the new “big idea” of 21st century politics.

Okay, so some of these ideas have previously been proposed by the Conservatives, but that's politics.

Given that the Conservatives have ditched most of the policies they fought the 1997, 2001 and 2005 elections on in order to be more like New Labour, it’s not an accusation that can be easily sustained.

So where now for Mr Brown? Well, his dream scenario would be that this week’s “relaunch” will be followed by victory in Crewe and Nantwich, enabling Labour to claim that the worst is now behind them.

It will give Mr Brown the vital breathing space he needs to get through the summer and into the conference season without facing endless speculation about his leadership.

But the problems will come if, in spite of the fact that he thrown virtually the kitchen sink at it this week, next Thursday’s by-election is still lost.

Having fired off the two biggest shots in his armoury in the shape of this week’s announcements, it is unclear what ammunition Mr Brown would have left to turn the situation round.

The Crewe and Nantwich excuses are already lined up. If Labour loses, the government will seek to pass it off as part and parcel of the local election debacle rather than as a separate crisis.

That, however, will only work if Labour’s share of the vote remains broadly in line with what happened on May 1.

If the result suggests that the crisis has actually worsened since Mr Brown launched his “fightback,” then the pressure will really be on the Prime Minister.

In those circumstances, it is entirely possible that he may shortly be receiving a visit from the men in grey suits – or whatever Labour’s equivalent of them may be.

Indeed, Thursday’s by-election is rapidly assuming the same degree of importance as the one that took place a quarter of a century ago in another old railway town, Darlington.

On that occasion, Labour went into the contest beset by internal divisions and with serious question marks over the leadership of Michael Foot.

Had Labour lost, it is likely Foot would have been replaced by Denis Healey, but university lecturer Ossie O’Brien pulled off a shock win and saved his leadership, albeit only temporarily.

Can Tamsin Dunwoody pull off the same trick for Brown? This time next week, we’ll know the answer.