How the Prawn Cocktail Offensive skewered New Labour

What with global economic meltdown and the ongoing crisis over Gordon Brown's leadership, poor Nick Clegg found himself struggling for attention this week. Here's today's column from the Newcastle Journal.

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There is an old and venerable tradition in this column, going back a decade or more, that each September the Liberal Democrats get an annual opportunity to bask in the Linford, er, spotlight.

It’s only fair, after all, that a party that is invariably subjected to the third-party squeeze should have at least once chance each year to get its message across.

They certainly need it, with one poll this week showing the party’s share of the vote down to 12pc – its lowest standing since the early days of Paddy Ashdown’s leadership.

Two changes of leader since 2005 have not altered the party’s fundamental problem: that the Tory revival under David Cameron looks set to deprive it of most of its MPs in the South and West, with few corresponding gains from Labour in the North.

New-ish leader Nick Clegg did at least demonstrate this week that, like Mr Cameron, he too can make a speech without notes, even if he needed the help of a set of giant autocues all around the conference hall in Bournemouth.

And he did demonstrate a determination to reach out to voters on both right and left, in a tactically clever speech that managed to be both redistributionist and tax-cutting.

But sorry chaps, it is impossible, for this year at least, for me to devote to your conference the level of attention to which you have become accustomed in previous years.

In a week which saw both continuing global economic meltdown and the beginnings of a concrete challenge to Gordon Brown’s leadership, the events in Bournemouth were no more than a sideshow.

It was a desperate, desperate week for the Prime Minister. As he battles to save his premiership, the one thing he needed above all was a trouble-free run-in to his party’s conference.

But his hopes of presiding over a moreorless united gathering in Manchester were shot to pieces last Friday evening when junior whip Siobhain McDonough went public with her call for a leadership challenge.

Ms McDonough was followed out of the door by party vice-chair Joan Ryan and special envoy Barry Gardiner, while another 12 MPs put their name to a barely-coded call for leadership change.

Finally, on Tuesday, came the resignation of David Cairns, Minister of State at the Scotland Office and the most senior figure so far to put his head above the parapet.

The rebels are as yet small in number. But it’s not about numbers so much as momentum, and the momentum is with the rebels.
Thus far, the revolt has spread from a couple of obscure backbenchers to former cabinet ministers to the whips office to the parliamentary private secretaries and finally to a minister of state.

It is surely now only a matter of time before it spreads to the Cabinet, with Barrow MP and Business Secretary John Hutton the overwhelming favourite to wield the knife.

The fact that Mr Hutton could not bring himself to condemn those MPs who have called for a leadership challenge this week was surely significant.

I myself have thought it likely for some time that Mr Brown would face a challenge this autumn, and before the recess, I argued on these pages that he probably should face one.

That said, it would have made a certain amount of sense for the rebels to hear what Mr Brown had to say in his conference speech before rushing to judgement about his prospects.

What the rebels are effectively saying is that there is nothing he can possibly say in his speech on Monday that can make any difference to his public standing – which is a somewhat crass position to adopt.

They may well be right – but if so, why not wait until after the speech before speaking out? It would, after all, only serve to make their argument that much stronger.

The one thing, it seems, that might rescue Mr Brown, is the continuing economic turmoil resulting from the collapse of Lehman Brothers and the near-collapse of HBOS.

It certainly seems to have removed the immediate threat. As Harriet Harman said on Question Time, holding a leadership contest while people are worried about their jobs and savings would make little sense to the public.

It is a seductively persuasive argument, but the events of the past week have not removed the Prime Minister’s underlying political weakness. Indeed, if anything, they have intensified it.

What we are actually seeing is the old argument about Mr Brown being the “best person” to deal with economic turmoil being turned on its head. Increasingly, people are in fact blaming him for the mess.

The Prime Minister’s announcement on Thursday about “cleaning up the city” is a case in point. If it needs “cleaning up” now, what on earth was Mr Brown doing as Chancellor for 10 years to allow it get in such a state?

The truth is, New Labour made a strategic decision a decade and a half ago that it needed to win the support of big business in order to demonstrate its credibility as a party of government.

It was once known as the Prawn Cocktail offensive - in the days when City executives still ate the stuff. Nowadays it would probably be called the Seared Scallops offensive instead.

Either way, the upshot was that when Labour came to power, it proceeded to apply a light-touch regulatory framework that was never likely to prevent a credit-fuelled boom getting out of hand.

To my mind, Mr Brown will now forever be haunted by the phrase which, during the early years of his Chancellorship, he made his own: “No return to Tory boom and bust.”

Back in the days when “Prudence” ruled the roost at No 11, he was as good as his word – but eventually, he allowed his vanity – or was it just ambition? – to get the better of him.

Like Anthony Barber and Nigel Lawson before him, Mr Brown found the temptation to bask in the reflected glory of economic good times too hard to resist.

Now, as Prime Minister, he is reaping the whirlwind – and how.