Gordon Brown’s response to the dreadful electoral results of last week provides a good opportunity to look back and see where all this has left British politics.

While the 10p tax rate may have left many natural Labour voters at home sullen and resentful, the next General Election will be won or lost on the anxieties and fears of a much larger swathe of the British public.

If things carry on as they are doing, they will go out and vote in a General Election alright – but for the ‘wrong side’.

Headline Issues

The final results of the London and local government elections showed us what Labour grassroots insiders have been privately predicting since late last year, a collapse in the Labour vote, although even they did not expect that it would fall to its lowest level in forty years.

A Tory victory in the next General Election is now regarded as probable rather than possible. Here are some of the headline issues that the results suggest that we should consider:

• One of the first announcements, as Boris Johnson (Tory) was confirmed as the new Mayor, was that Mayor Bloomberg of New York would be meeting him on May 9th. Both are Atlanticist conservatives. The implication of this is that London may shift back from ‘world city’ orientated towards the East (which has been Livingstone’s position, supported by the Government) towards the old Wall Street-City axis, at least insofar as politicians are able to effect this. Livingstone may, of course, have been more in tune with the trend of history than Johnson.
• While Boris Johnson's win should not affect the City’s ambition to become a centre of Islamic Finance, there is an anti-Islamist and strong pro-Zionist tinge to Johnson’s circle. This will proportionately strengthen this tendency within the Tory Party and will create some factional tension between the Tory Right (to which Johnson belongs) and the Tory Left. The coincidental election of a pro-Zionist anti-Islamist Neo-Fascist Mayor of Rome may not seem immediately relevant but it attests to the potential for conservative populism to emerge amongst the European middle classes, as fear and anxiety about the economy start to grow.
• Boris Johnson's win was not a landslide by any means. It might be judged as merely representing the ability of Tories to get suburban votes out on the day while disillusioned Labour voters abstained in the inner city. It was probably decisive that Liberal Democrat voters wanted to punish Livingstone on a second preference vote. In short, the Tories do not own London by any means.
• Gordon Brown is now looking like a ‘loser’. Already, respected grassroots Left figures are openly stating that New Labour is ‘dead’ (meaning not the Labour Party or Movement but the coup plotters in the mid-1990s): Labour may now go through an internal power struggle to recalibrate the Party away from the authoritarian neo-liberal Right.
• There will be no leadership challenge to Brown (see below) in the next few months, but he is likely to be seen as a caretaker rather than as long term Leader even if he is too deluded to see this himself. New Labour strategists (the ones with brains, that is) will now be planning for the probability (though not certainty) of defeat in 2009/2010.
• Contemporaneously, David Pitt-Watson resigned as Secretary-General-designate of the Party (an intention that was probably delayed because of the need not to have the story affect voting intentions): informed rumour suggests that he was dismayed at the financial state of the Party (£20m of debts serviced by a declining membership with no major donations in the pipeline except from a more militant trades union movement), at his personal liabilities if he led its administration and at the prospect of vicious infighting that would have stopped him doing his job. He has made no formal statement on any of these issues.

Labour’s Crisis Period

Add all this together (and see our previous analysis) and you see that the tensions within the Labour coalition are probably reaching a point of no return.

It is on the very edge of one of three outcomes: internal civil war, financial and administrative collapse or an eventual electoral challenge from the libertarian and democratic socialist left.

The process may result in a renewal under new leadership (certainly Labour stalwarts hope so) but it could remove New Labour from power for a generation.

Equally, it could cause a split that creates a serious competitor for a Party that has too long lodged on ground shared with the Tories.

There are historical precedents for renewal, for marginalisation and for splits - and, in the rise of the Labour Party itself, for displacement.

But could the situation be turned around?

It is possible but it would require a) qualities of leadership in the higher political reaches of the New Labour Party that have not been evidenced to date and b) a political strategy from the trades unions that was about much more than capturing the state by the back door.

Neither transformation is likely on the timescale of the next General Election. Part of Labour’s problem is that Cameronism is merely an extension of Blairism. Brown has failed to hold on to Blair’s territory credibly and he has lacked the imagination to seize higher ground elsewhere.

Middle England liked Blairite policies despite their being at the root of the current economic crisis.The suburban middle classes, in particular, find it very difficult to see the connection between current problems and past actions.

For many voters, Blair became very unpopular as a perceived monomaniac but the broadly authoritarian neo-liberal right position that he represented still had its base in the country - at that very point at which New Labour had become trapped through its triangulation strategy.

Brown’s attempts to fill Blair's space have not only not looked credible but his attempts to do so have left him in the valley between two sets of high ground - traditional values and Blairism. Cameron has cleverly and quickly leapt up the hill and captured part of Blair's old fortress.

Brown has proved himself a poor tactician and a worse strategist, ending up in a weak and indefensible position and fighting, in effect, on two fronts.

Meanwhile, the attempt to hold the old Blairite ground rather than cross the valley and build a new fortress on the centre left have finally alienated those who are on the more libertarian and left sides of the political equation.

Years of sullen compliance with a strategy that had brought power but was fundamentally politically a-moral had dammed up massive resentments. There is no incentive to suppress this anger if the leadership cannot even deliver the surety of power.

Problems Mount

Problems continue to mount for Gordon Brown. There is continued Parliamentary pressure on clarification of his proposals to mitigate the effects of the 10p tax rate.

The illiberal 42 days proposals are rapidly becoming a symbol of resistance to the Party’s ‘triangulation’ towards the authoritarian neo-liberal Right - and an issue on which the Tories have managed to out-flank the clumsy Mr. Brown to his Left! 

Boris Johnson in London has come in slugging with a traditional Tory position on crime and expenditure that has created what can only be described as inarticulate and impotent rage amongst Leftists in the City … whatever Ken says, they blame Brown for their loss.

But Brown’s response this past weekend still misses much of the point of the defeat.

It is still cast in terms of an egoism of the centre – he will be resilient (a pale shadow of Thatcher’s style) and his sympathy for the public is still a psychological centering of politics on him and not an empathy with the fear and anxiety (and anger) ‘out there’.

The public doesn’t really give a damn now for his determination and sympathy – they want results.

Our sources in the financial community are adamant that, despite the media’s recent trend towards moderating its earlier gloom on the economy, the credit problems in the ‘real’ economy will be hitting us hard in the Autumn - that is, if Government, banks and regulators cannot avert what looks like the inevitable.

A more optimistic Press is merely encouraging a lot of small businesses and investors to go 'into denial' (as one commercial banker put it to us).

Some even continue to try to borrow to expand when market conditions say determinedly that now is the time to re-order one’s affairs for a small storm at best and a hurricane at worst.

Meanwhile, the next test is a by-election on 22 May in Crewe and Nantwich which had been held by the late Gwyneth Dunwoody, an MP of the old Labour Right whose integrity and independence of mind was much respected.

If Dunwoody’s daughter is defeated (though a personal brand can mean some significant votes in some traditional Northern seats), it will mean that a Labour heartland will not stop at one ‘punishment vote’ for the Government but really is prepared to push ‘its own’ Party from power.

The Leadership Challengers

You can ignore the prospect of a leadership challenge for a while yet. This is not how Labour does things. 

A challenger would need 71 members openly to challenge Brown in September. Certainly John McDonnell could never deliver this number of the PLP despite his Leftist support in the country.

The prospects for a successful challenge that does not continue Blair's policy of triangulation to the Right look fairly bleak. Yet many Leftists are living in cloud-cuckoo land in believing that they can overturn the system from within.

John McDonnell operates in the Livingstone territory of mass action urban Leftism and Livingstone himself has been strengthened rather than weakened within the Party by his creditable performance in London, despite his defeat.

But McDonnell not only has insufficient support amongst the PLP and the unions, electorally he is unlikely to appeal to many outside the inner cities – he is a gadfly rather than a credible future Leader.

Ken Livingstone himself is unable to contend and can only endorse or withdraw his endorsement of other candidates.

He might get significant grassroots and even union support but the PLP would be highly resistant to him and he would face serious image problems in Middle England.

There is the Left-insider Jon Cruddas but, while he may win over many (though not all) trades unions, he has insufficient base in the PLP.

It would also require a massive effort to introduce him to the public as someone distinct from the current New Labour elite. Most importantly, his place in Parliament would probably disappear if we saw the levels of anti-Labour vote that we saw on Thursday at a General Election.

Compass (the leftish group) places its trust in Cruddas (with some reason in view of his undoubted talent), but he needs a far more secure base in the Party and as a politician. Their strategy (the ‘long game’) may soon be overtaken by events.

Cruddas is intellectually and even politically credible under certain conditions but those conditions might be those of such meltdown, even he was still in Parliament to take advantage of the crisis, that he would be in no better position than the leadership of the shattered Party that emerged out of the fiasco of Ramsey Macdonald's National Government.

The Left, whether radical or ‘sensible’, has no credible candidate who is not deeply ‘tainted’ by engagement with Blairism and with the policies of the last decade, let alone the last year, or who, to win, requires a devastating meltdown of the Party in the polls - and a whole lot of luck.

The Right Wing Candidates

All the remaining candidates, with Alan Johnson and David Miliband at the head of the queue are, by any analysis, continuations of the previous regime.

They are only able to sell more confidence and more competence in pursuing the same general strategy at a time when decisive radical reverses may be required in the face of a determined Tory challenge with a cogent 'social capital' theory underpinning it.

Some Leftists (ironically those further to the Left) believe that a full centre-left programme could capture a candidate from the New Labour centre-right. They are deluded.

The rhetoric might change but the programme of centralised executive authority, international liberalism, market economics and market solutions to social problems would remain core to New Labour.

The only addition might be the odd populist crumb thrown to the seething masses to keep them placid until the good times returned.

Such a strategy might well, of course, be sufficient to restore the Labour's fortunes but the fact is that New Labour and the Tories are now fighting over the same terrain on level terms for the first time in over a decade.

Of course, Johnson would bring the trades union bloc as moderate partner in a truly ‘Labour Party’, while Miliband would bring the progressive model that is attractive to the internationalist Left. But neither is innovative or radical.

The Weakness of Gordon Brown

The bottom line is that New Labour is going through a major crisis that is not only electoral but ideological.

It is a crisis that will probably develop to become a major internal struggle immediately after rather than before the next Election, unless the Prime Minister has the wisdom to allow it to be fought out quickly and decisively in advance.

But Brown failed to have the courage to put himself up to a challenge from McDonnell in the summer of 2007 (which he would easily have won).

He then failed to endorse his position in a snap election which he might well have won, especially in the early stages of the credit crisis when electors would have sought security in the devil they knew.

The accusations of dithering since those failures of nerve seem to confirm a picture of a politician without the risk-taking and decisive characteristics necessary in party politics.

He waited a decade to get the top job and now it looks as if he is hanging on to it regardless of the interests of either Party or nation.

The Brown Government will probably muddle through to defeat, to a minority Government or to a Government in which a small left-wing rump has disproportionate and electorally disruptive influence.

What New Labour (under Brown) cannot realistically expect is the same level of authority that it has had in the recent past unless international conditions and skilled political management remove current fears and uncertainties.

Conclusion

The neo-liberal authoritarian right remains the political core of Britain much as it does in most of those Western countries with irrational aspirations to international status and a middle class hungry for property and profit - but there are two caveats.

The first is that concentration of power on the centre-right is accentuated by the electoral system so that electoral reform must return to centre-stage in Left analyses.

In fact, even now, New Labour and Liberal Democrat votes still exceed Tory votes nationally. It is only the vagaries of the First Past The Post System [FPTP] that stop the creation of a permanent and dominant real centre-left coalition emerging.

FPTP has played a central role in driving New Labour towards the Right and then trapping it there as, in all but name, a European conservative party rather than democratic socialist party, one often operating against the majority libertarian instincts of the public.

The second is a corollary of this - the British are more socially liberal than other European nation and certainly more so than the US (which is a factor picked up on by Cameron and may yet propel him to power).

The paradox of a basically liberal country with its politics permanently lodged in a battle for ground more appropriate to the authoritarian right suggests a serious tension that is in-built into British constitutional arrangements.

As we have noted before, New Labour as it was and the Tory Party as it claims to be are operating broadly within the same policy parameters, adopting a libertarian social and economic policy but avoiding democratic reform and using authoritarian rhetoric when required.

If the Tories get to power, all that will change will be a bias towards the South rather than the North and towards middle class prejudices rather than working class needs.

Otherwise, it will be a further moderation of a settlement made during the Thatcher Revolution. The social democracy that emerged between 1940 and its collapse in the 1970s will look more and more like a historical 'blip'.

This past will be inspiring to some perhaps but only in the sense that the political revolution of 1640 to 1660 is inspiring - so that a legacy of a welfare state built on market solutions will be our social equivalent to the democracy of propertied interests that emerged after 1688.

Better but not really good enough. In short, the Labour Left may be in the position of Puritan Republicans in the Age of Queen Anne - on the verge of extinction, living in the past but not yet realising that their time had passed.

The massive correction under way in the global market will now face the current and next Government with some very serious problems that may disproportionately affect the middle classes of the South.

This alone suggests a lurch to market populism and against ‘prudence’ if a Government is to survive – Northern Rock may only be the beginning.

That same correction may also demonstrate a national inability to sustain Great Power status overseas. This will shame an incumbent more than a incomer who can claim that failures overseas are due to previous policies and not to the intrinsic weaknesses of the State.

None of the political class has yet fully come to terms with these changes or, perhaps more accurately, found a way to give the bad news to electors.

Sectoral demands, populist policies and failures overseas will create their own crises (albeit not terminal) for the current political system in the first half of the next decade.

The longer that New Labour remains in power, then the higher the chance that it may become unelectable in future because, like Herbert Hoover's administration in 1929, it lacks the ability to move outside its recent history. It is, in summary, played out.

On the other hand, the longer that the British Left loses itself in the New Labour project without developing a transformative alternative, then the more likely that it will not exist in the century ahead as anything that would have been recognisable to a twentieth century Leftist, perhaps as anything at all.

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