The financial crisis: what will be the impact on Labour?

by Stephen Tall on October 13, 2008

Yesterday I looked at the impact of the current financial crisis on the Lib Dems, the one party which correctly anticipated the credit crunch and its impact. Inevitably (if frustratingly) much of this will depend on the extent to which the public blames Labour for the mess the UK currently finds itself in, or the extent to which they credit Labour if the Government’s bail-out package helps rescue the UK from amidst the debris of the current global crisis.

In short, what the Lib Dems have to say is unlikely to have any immediate positive or negative impact on the party’s fortunes. This perhaps is part of the explanation for the Tories deciding to go ‘missing in action’ over the past week, with former Chancellor Ken Clarke wheeled out to field the tricky questions.

There’s no doubt that Labour’s Gordon Brown is trying to recapture his image as ‘Father of the Nation’, an epithet he briefly enjoyed when he first took over from Tony Blair. He is presenting himself as the granite-hard man of experience, a grizzled, tested veteran with vast economic experience. Take for example this grandiloquent extract from his speech today on the global economy:

During the Second World War, far-sighted leaders like Roosevelt and Churchill were already thinking about the framework that would be needed for the future. Whilst in the heat of battle – taking steps to forge the reconstruction and peace that was to come.

GATT, the UN, the World Bank, the IMF – they were all devised by men and women of great vision – institutions profoundly of their time, but designed to help people make the most of the times to come.

With the same courage and foresight of their founders, we must now reform the international financial system around agreed principles of transparency, integrity, responsibility, good housekeeping and co-operation across borders.

Note the comparisons to Other Great Men, with whom, by association, the Prime Minister now seemingly brackets himself. Suddenly, with one bound, Gordon is free, transformed simultaneously and paradoxically into a peace-making war-time leader. As Nick Robinson tonight notes:

The death of the banks (at least as independent institutions) has, it would appear, been accompanied by the rebirth of Gordon Brown. … What can be stated with total confidence is that the prime minister himself feels more confident doing the job that at any time since he got it.

To paraphrase Neil Kinnock, the crisis has proved Gordon has guts, but it’s a pity that others had to spill out their guts on the Square Mile in order to prove it.

As part of last week’s LDV members’ survey, we asked: Do you think the current crisis in the financial markets is most likely to damage the Labour party, with voters viewing the Government as partly responsible, or damage the Conservative party, with voters not trusting David Cameron and George Osborne to run the economy?

Here’s what the 182 respondents told us:

Damage the Labour Government – 40%
Damage the Conservative opposition – 30%
Other – 21%
Don’t know / No opinion – 9%

More of you appear to think that Labour will be the political loser from the last week’s unprecedented turbulence, though almost one-third think the ‘novice’ tag will damagingly stick to Messrs Cameron and Osborne. Of the one-in-five of you who ticked ‘Other’, most argued that both the options were equally likely.

The Labour Party, and Gordon Brown personally, are enjoying a mini-resurgence in the polls (albeit from an extraordinarily low base of mid-20%s). But what will it all look like in three or six months time, as the effects of a recession – job losses, bankruptcies, repossessions – begin to bite, and Alastair Darling examines the wreckage of his budget balance sheet. Will the electorate be looking still to Mr Brown as the ‘Father of the Nation’, or will they take a distinctly more Philip Larkin-esque view of the Prime Minister’s parenting abilities?