Ghost of Callaghan strikes again

With the election drawing ever closer, it is hard to say which of the three stories which have dominated the political agenda this week will have done Labour’s chances of a fourth term the most damage.

In a Budget week that was never going to be an easy one for the government, its cause was hardly helped by the revelations surrounding North Tyneside MP Stephen Byers last weekend.

The former Cabinet minister was forced into the humiliating position of having to refer himself to the parliamentary standards commissioner after describing himself as a “cab for hire” to an undercover reporter probing political lobbying.

As the headline on Monday’s Journal editorial succinctly put it: What a way to finish a political life.

By admitting that his initial claims to have persuaded Transport Secretary Lord Adonis to go easy on National Express after it defaulted on the East Coast rail franchise were fantasy, Mr Byers effectively fell on his own sword.

In one sense, he did the honourable thing. Not to have done so would have triggered a far bigger scandal that would certainly have forced Adonis’s own resignation.

Yet although Mr Byers is a politician who, in the words of the former rail regulator Tom Winsor, has an “ambiguous relationship with the truth,” there remains a nugget of suspicion that his claims may not have been entirely groundless..

The idea that he may have brokered a deal with Adonis over National Express does not seem all that fantastical to those of us who know how government really works.

By contrast with Mr Byers, Chancellor Alistair Darling is certainly not a man given to hyperbole or flights of fantasy – although he has occasionally been known to blow the whistle on his own government.

He did it when he spoke of Number 10 unleashing the “forces of hell” against him following a candid interview about the recession, and he did it again this week with his comments about the ‘Thatcherite’ scale of the cuts that will follow the election.

Given that Prime Minister Gordon Brown has been at pains to underplay the extent of the cutbacks, this stark message from his next-door neighbour was about as off-message as it was possible to get.

It reveals once again the tensions between a Chancellor whose focus is on sorting out the public finances, and a Prime Minister more worried about political positioning.

Pre-election budgets are traditionally a time for giveaways, as Mr Brown demonstrated in 2005 with his announcement of a £200 council tax rebate for pensioners.

Any such rabbits-out-of-the-hat this time round would surely have got a belly laugh from a cynical electorate, and Mr Darling was surely right to resist them.

That said, by playing safe, the Chancellor added to the widespread impression of a government that has run out of ideas and is reduced to nicking them from the Tories, as with the stamp duty holiday for first-time buyers.

It had, in truth, a rather fin de siècle air to it – much as the demise of a man once thought of as a future Labour leader provides an apt metaphor for his party’s decline and fall.

But if there is one thing that has really damaged Labour this week, it is not Byers or the Budget, but the unions.

The strikes by BA cabin crew and now the RMT rail union have revived bitter memories of the dying days of the last Labour government in 1979, and are certain to lose the party votes.

Throughout his career, Gordon Brown has fought shy of the parallel with Jim Callaghan, the long-time Crown Prince forced to wait for No 10 by a more charismatic rival.

Once again, though, it seems Mr Brown’s destiny to follow in his footsteps.

Region's ambitions derailed once more

Among the stories to catch my eye this week was one warning that the £16bn Crossrail scheme to link East and West London may have hit a potentially deadly snag.

An area of the capital destined for tunnelling as part of the scheme may, it turns out, be the site of a missing 16th century burial ground for victims of anthrax.

Since long-dormant anthrax spores can spread through the air and cause fresh infection if disturbed, this doubtless poses something of a dilemma for the engineers working on the project.

Nevertheless, transport secretary Lord Adonis said a compulsory purchase of the affected area, beneath a car park near the old city walls, was still expected to go ahead.

Given recent developments – or rather lack of them – in the North-East transport arena, this episode may well have brought some wry smiles in this part of the world.

While nothing must be allowed to get in the way of Crossrail - be it hell, high water or anthrax - it’s a different story when it comes to the region’s hopes of inclusion in the planned high speed rail network.

Work on the new 250mph line linking London, Birmingham, Manchester and Leeds is due to begin in 2017 – the year Crossrail is due to be completed.

But it won’t be coming to the North-East any time soon, if at all. Under the current plans, the 21st century will be into its fourth decade before there is the remotest chance of that.

You had to feel for poor old North-East minister Nick Brown, who has lobbied hard for the region to be included in the network, reduced last weekend to a lame pledge to do something about the East Coast Main Line.

The same Lord Adonis has refused to give any commitment to extending the high speed link to Newcastle, saying it was important to concentrate on a “deliverable” project.

This is despite a consultants’ study which found that extending it would create 95,000 jobs by 2040, and the government’s own HS2 team advising that including the North-East in the network made the “best business case.”

Neither should we supposed things would be any better with the Tories, who want a cheaper link from London to Leeds that would leave out the East Midlands as well as this region.

For those of us who have followed the debate about regional spending over a number of years, it’s a depressingly familiar picture.

It has long been clear that the North-East’s relative lack of good transport links are the biggest single obstacle to its competitiveness, and the biggest single reason for the endurance of the North-South divide.

Sadly, the die was cast on this years ago when the government declared, around the same time as it gave the original go-ahead to Crossrail, that there was no relationship between regional spending and regional economic prosperity.

It was, of course, a lie, but it was a lie that enabled ministers to claim that spending £16bn improving London’s transport system would have absolutely no adverse impact on poorer regions.

That, of course, is a nonsense. Between them, Crossrail and the new high speed link will dramatically widen the prosperity gap between those regions that already have good transport connections and those that have never had them.

Of all the many reactions to the high speed decision, perhaps the quaintest came from the chief executive of One North East, Alan Clarke.

“The phasing of the development of a high speed network is important and must not lead to areas of economic disadvantage,” he said.

“Lead to?” Wake up and smell the coffee Alan. Economic disadvantage has been here for decades – and it’s about to get worse.

Blame, or Gratitude?

Ever since it first surfaced during the 1992 US presidential campaign, the claim that all elections are essentially about “the economy, stupid” has become something of a political cliché.

Like most clichés though, this one contains more than a grain of truth.

MPs expenses, the Iraq Inquiry, antisocial behaviour, the personalities of the party leaders – all will doubtless play a part in helping to shape the forthcoming election battle.

But when all is said and done, it is the state of the British economy which will be uppermost in most peoples’ minds when, as now seems certain, they come to cast their votes on 6 May.

One of the many reasons for this is that there is an unusual degree of unanimity between the two main parties that it should be so.

It is more often the case in politics that the two parties will seek to push different issues to the fore – for instance the health service in Labour’s case, law and order and defence in the case of the Tories.

In this election, though, both the two main parties are convinced that focusing on the economy is in their electoral interests, even though they can’t both be right about this.

It is hardly surprising that, in the wake of the worst recession since the 1930s, the Tories see Labour’s economic management as its weakest spot. What is more so is that Prime Minister Gordon Brown still believes it is his strongest suit.

That much was clear from the speech Mr Brown delivered on Thursday in which he appeared to invoke Churchillian rhetoric to describe his battle to keep the economy afloat over the past couple of years.

Mr Brown said the worst was now over, but the recovery remained fragile and that withdrawing the support he put in place in 2008 would drive the economy back into recession.

He was once again driving home what will be his central campaign message, that the recovery is not safe in the Tories’ hands.

And once again he declared “I will not let you down” – just as he did on the steps of Number 10 the day he took over as Prime Minister, in what already seems the faraway summer of 2007.

Of course, Mr Brown is enough of an historian to know that the British electorate does not usually see general elections as an opportunity to say “thank you.”

Having saved Britain from its biggest external threat since 1066, Churchill famously lost the 1945 election, largely because the public was motivated more by a desire for change than by a desire to express its gratitude.

The Tories’ response to the Prime Minister’s speech was predictable. “The biggest threat to the recovery is five more years of him,” said Shadow Chancellor George Osborne.

Five more years of Gordon Brown. We heard that at the Conservatives’ Spring conference the weekend before last, and we’ll be hearing it a lot more from Tory lips over the coming weeks.

The problem facing Mr Brown, as ever, is that the economy is a double-edged sword for him.

There is a broad consensus that he has been at his best in tackling the economic crisis over the past two years. But there is also a consensus that, during his time as Chancellor, he helped create the conditions which allowed the recession to occur.

So what it boils down to is this. Will the voters give Mr Brown the credit for leading Britain out of the recession, or will they punish him for failing to prevent it in the first place?

On the answer to that question, more than anything else, the result of the 2010 general election will rest.