The Daily Novel

While Gordon Brown was uncomfortably putting on fancy dress to receive an honary degree in India, his future was being decided back home. His plan for getting out of the Northern Rock debacle was being put to the House of Commons by his Chancellor, Alastair Darling. And not at an auspicious moment. The stock market was crashing on fears of a deep recession in America, fuelled by the monumental over-borrowing in the US housing market.

Darling was saying that Northern Rock’s portfolio was sound. No need for the Government to nationalise it. The private sector would take care of it. No mention of the fact that Northern Rock got into trouble, because along with most British building societies and banks they fuelled a boom based on people being allowed to borrow as much as nine times earnings. Fine, so long as property prices continued to rise. But bound to run into trouble if the boom did not last for ever. Which it has not.

The British economy is not yet is such dire straits as that of the US. But it is pretty bad. And it is not only Northern Rock which has issued mortgages to people who are going to have difficulty in meeting the payments. Unless the Government bails them out.

Brown says he will not nationalise British Rock. Because he is New Labour, and nationalisation is Old Labour policy, which Brown and Blair were united in overthrowing. But the private sector solution is only possibly because Brown has sent out signals that the Government will pour in billions to stop not only Northern Rock, but all those banks and building societies who have lent extravagantly from the commercial consequences of their own actions.

In the House of Commons today, it was Vince Cable, the former acting leader of the Liberal Democrats, who nailed this one. What Brown is doing is nationalisation by the back door, dressed in the clothing of the modern jargon of private finance initiatives.

Most of the media pundits have been concentrating over the last few days on the US election, where change is the catchword of the hour. The outcome is probably more unpredictable than any US election since the second world war. But one thing is certain. The next US government is going to be radically different than the regime of George W Bush, which has ruled America, and much of the world, for more than seven years.

Gordon Brown does not have to worry about this, he thinks. Because he does not have to have an election until after the new President is installed in the White House. Or does he?

Because most of the commentators think that the best he can hope for is a hung parliament. And since the British do not have a Presidential system, he has to face Labour MPs in Parliament and his own party in leadership contests. Which will not be easy to win the way he is running things at present.

Because he, like his erstwhile pal, Tony Blair, likes to act like a President, thinking things out for himself and then telling his colleagues what to do. But the world is bigger than the British electorate. And New Labour is not exactly top of the pops in international circles. The left in Europe have noticed that Blair is now on the payroll of the arch US capitalists, J P Morgan. They have also noticed that he is letting it be known that he would quite like to be President of Europe.

How would that play with the Labour Party? What would Gordon Brown do if it happens?

In the House of Commons today, Wiliam Hague,  a former Tory leader, demolished him effectively. But the present Tory leader, David Cameron, has to be more circumspect, given his problems with his own party, which thinks he is too left wing, and is still split down the middle on matters European.

The person who is best placed to make political capital of this situation is the new leader of the Liberal Democrats, Nick Clegg. He has not had a easy press, partly because he is easily targeted as a slim version of David Cameron. Because he is of similar age, and is equally eloquent in wooing voters. He needs to learn from Cable and add some gravitas to his speeches. And also some of Cable’s courage.

Cable has argued that the only sensible solution for Northern Rock is straightforword old fashioned nationalisation. He has done this without attracting any negative comment. Because the Lib Dems are a coalition of the old very liberal party and those Labour members, who left the Labour Party, led by Roy Jenkins and Shirley Williams, because they did not agree with doctrinaire nationalisation.

Such is the present state of British politics that the Liberals can argue for the nationalisation of British Rock more easily than Labour.