Can Cameron Lose?

The Weekly Standard, March 22, 2010

For a country to have its currency marked down against the Zimbabwean dollar is not generally a good sign. But that is what has been happening to Britain this year. And it got worse in the immediate aftermath of an early March opinion poll showing that the governing Labour party had pulled to within 2 percentage points of the Conservatives. For quite a while now, there’s been a widespread assumption—backed by opinion polls, local election results, the 2009 vote for the EU parliament, and the feeling that enough was enough—that the Tories after 13 years out of power would win a decent majority in the general election due no later than June.

That wasn’t unreasonable. The U.K. has been wrecked by Labour. For Britons to give Gordon Brown a new term would be about as sensible as Pharaoh inviting the locusts back for another snack. The Conservatives meanwhile had been given a fresh lick of paint by David Cameron, the young (43), loudly modernizing politician who took over the Tory leadership in 2005. They were revived. They were ready. What could go wrong?

Well, Cameron suddenly has a shot at being Britain’s Thomas Dewey. That March poll was just the most dramatic of a series showing that the robust Tory lead of last year—usually well into double digits—had dwindled to a toss-up. Thanks to the peculiarities of the U.K.’s electoral system, the Conservatives need to be around 10 points ahead of Labour to achieve the sort of parliamentary majority that they will need if they are to form a workable government. Not only would a 2-point lead not do the trick, it would actually result in Labour being the largest party in the House of Commons and, almost certainly, holding onto power.

The most common expectation of the chattering classes is now of a “hung parliament” in which the Conservatives would win the most seats, but fall short of an absolute majority. They still might be able to form a minority government, but it would be a weak, fragile thing, and in no position to do what needs to be done to restore Britain’s battered finances. The uncertainty that this would bring may spook the markets even more than a clear Labour win. A reelected Labour government ought at least to have the authority needed to tackle a budget deficit that threatens to set the bailiffs on Blighty. It might even use it.

But if international investors were alarmed by the turn in the polls, they were equally bewildered. To outsiders, not least in the United States, the thought that Gordon Brown could be allowed to continue in office beggars belief. That he might highlights just how much the reality of British politics differs from the fond Atlanticist myth. That reality is the reason David Cameron, new Tory, has done what he has done. It’s the reason he may yet fail.

The roots of America’s attachment to the free market and to individual liberty may be traced back to the sceptr’d isle, but the Old Country is today a nation of the center-left and has been for over six decades. Class resentment, greater respect for authority, the all too visible failures of British capitalism, and intellectual and physical proximity to the continent, have all helped push the U.K. in a direction very far from Adam Smith’s ideal, a process buttressed by the institutions, habits, and ways of thinking put in place by Labour after its landslide victory in 1945.

Browbeaten by memories of the scale of that defeat, postwar Tory governments preferred to focus their efforts on the more efficient management of the social democratic state rather than its replacement. That began to change with the election of Margaret Thatcher in 1979, but it’s telling how close that happy day came to never dawning.

Bought and paid for by the trade unions and blinkered by ancient leftist ideology, the Labour government of the 1970s presided over soaring inflation, penal taxation, rising unemployment, and endemic industrial disorder. Its crowning humiliation (there are many choices) was the moment it was compelled to go cap-in-hand to the IMF for a bailout in 1976. Despite all this, it might have won reelection had it gone to the polls in 1978—a fact that should make David Cameron shudder. Mercifully, Prime Minister James Callaghan blinked, and the strikebound “winter of discontent” was enough to hand Mrs. Thatcher a solid, if unspectacular win the next year. Her later majorities were far more substantial but, thanks to splits on the left side of the political fence, they were exaggerated by similar electoral dynamics to those that now operate against the Tories. She never won more than the 44 percent of the popular vote she received in 1979 (her narrowest victory in terms of parliamentary seats, incidentally), a showing that may explain why her reforms were more cautious and incremental than hagiographers now like to claim.

Her successor, John Major, had a less-successful encounter with the realities of a center-left nation. While his government made more than the usual number of blunders, the extent of its 1997 defeat by Tony Blair’s “New Labour” revealed a more profound phenomenon. It was almost as if the Tories had no legitimate role within the British body politic, a sensation magnified by extraordinarily antagonistic media coverage and the wholesale rejection of the Conservatives by the cultural elite, either highbrow or low. The journalist and novelist Robert Harris, a Blair supporter, reported with evident satisfaction in 1998 how he couldn’t think of one single “important” British writer, film director, theater director, composer, actor, or painter (“apart from Lord Lloyd Webber”) who was a Conservative.

Under the circumstances, it’s no great surprise that the Tories have struggled ever since. Britain’s natural center-left majority reasserted itself—bolstered by the favorable economy bequeathed to Labour by the Conservatives, basking in the approval of its amen corner in the media  and benefiting from the assumption running through popular culture that there was something not quite acceptable about the Tories. Blair was also hugely helped by Britain’s electoral arithmetic. In the 2005 election, for instance, Labour won some 35 percent of the vote, but took 55 percent of the seats. This was the period in which the candidacies of the three Conservative leaders to follow John Major were destroyed almost as soon as they began.

Basking in the memory of the Ronnie and Maggie show, and reassured by the continuing (if fraying) willingness of the U.K. to stand alongside the United States in battle overseas (Britain’s still living martial tradition is one of the key respects in which it differs from its social democratic neighbors), many on the American right either don’t know or prefer to downplay just how different things are across the pond. That makes it difficult for them to appreciate what Cameron has been trying to do.

To get a feel for the challenge he faced in 2005, imagine what it would be like to be a Republican politician in an America where the mainstream media dictated a largely unchallenged liberal political agenda but where there was no Fox News, no Tea Parties, no libertarians, Perotistas, Second Amendment vigilantes, Club for Growth types, religious rightists, Reagan Democrats, NASCAR folk, country music fans, and .  .  . well, you get the picture.

Cameron felt the only hope of getting his message out was to “decontaminate the brand.” This meant tackling the media. And so he did—in a Winston Smith way. Two plus two did indeed add up to five. The caricature of the Tories as elderly, racist, reactionary bitter-enders was, Cameron implicitly conceded, true. He would, he said, put that right. The result was a slew of policies—some good, some bad—designed to show that the party had mended its ways. It was now younger, kinder, gentler, “compassionate” (yes, there were distinct echoes of the 1999 vintage George W. Bush in all this), and more inclusive. It was an approach epitomized by the Conservative leadership’s ostentatious embrace (the party logo is now a tree) of environmentalism—the secular religion of the recycling classes of Middle England and a pervasive finger-wagging cult among Britain’s showbiz “luvvies.” And it worked. While the media (with the exception of sections of Fleet Street) and entertainment worlds remain almost entirely estranged from the Conservative camp, the hatred ebbed enough that the Tory message to the wider British public was no longer drowned out.

But appeasing the media in essence reduced the Tory strategy to the twin pillars of inoffensiveness and not being Labour. As the country careened into financial catastrophe and historic recession that ought to have been enough, especially against a government divided by infighting and led by a morose, uncharismatic figure with, as the phrase goes, “issues.” But with the party very publicly remaking its image, this reticence has begun to look a lot like incoherence—a perception only amplified by signs of disorganization at the top of the Conservative hierarchy.

That this is an election that will revolve around the economy is, moreover, not the straightforward winner for the Tories that one might suppose. Debilitated by years of Labour misrule, Britain’s economy was exhibiting severe signs of strain even before the financial meltdown. But the 2008 crisis provided a perverse alibi for Blair and Brown’s bungling. The slump is not Labour’s fault, you see, but the work of those wicked, overpaid bankers—sleek, pinstriped, prosperous predators who look a lot like the Tories of socialist legend. It’s no great stretch for Brown to argue from there that the Great Recession is the logical consequence and conclusion of Thatcherism. And it will be no great stretch for many voters to agree. The problems with that analysis are complicated to explain in the course of an election campaign, especially for a party trying very hard not to appear disagreeable.

The Tories have to get over themselves. They need to pin the blame for the mess on Labour—where it largely belongs—but they also need to demonstrate that they have the competence and the ideas to manage Britain’s way out of this jam. The last few weeks of the Conservative campaign have not been reassuring on the competence front.

The ideas haven’t been too great, either. For all their talk of restoring a measure of control to the nation’s finances, the Tories have spelled out relatively little in the way of expenditure cuts. That Cameron has also vowed to “protect” spending on the National Health Service, a cost that already represents around 18 percent of public expenditure and is set to rise higher, merely reinforces the idea that the Tories are not serious about the deficit. Yet Cameron really had no choice. To advocate cutting back the NHS is an act of political suicide in Britain. The NHS, a source of national pride for all its shortcomings, is the third rail of British politics, the great creation of Labour’s postwar settlement, and a powerful mechanism forever pulling Britain’s politics to the left and its people into ever deeper dependency on the state whether as employee (the NHS payroll is over 1.3 million strong) or patient.

Yet Britain’s growing budgetary crisis (government debt is slouching towards 100 percent of GDP by 2014) presents the Tories with a conundrum. An austerity program will be essential, and it will be painful, particularly in a nation where so many work for the public sector. For the Tories to give more details of how they plan to come to grips with the budget deficit is essential if they are to be believed as offering a credible alternative to Labour’s botching of the economy. At the same time, it could be electoral poison in a country where the (wildly exaggerated) “Thatcher cuts” of the 1980s still fester in political folklore.

Labour knows this. The government is doing everything it can to create the illusion that the U.K. can somehow muddle through this crisis without too much pain. Putting party before country, Chancellor of the Exchequer Alastair Darling has left spending plans broadly unchanged over the last year, a stance that owes more to political calculation than to the more respectable concern that domestic demand is too depressed for cuts now. That’s a stance that could easily be reconciled with detailing plans for the more frugal future that the markets want to see, but this is not the course that Darling has taken. His pragmatic irresponsibility has been rewarded: An ICM poll earlier this month showed that when it comes to trust in their ability to handle the recession, the Tories’ lead over Labour had fallen to 2 percentage points—down from 15 in October.

The sense that there is something missing from what the Conservatives are saying is not confined to the economy. Just take the example of immigration. One of the hallmarks of the Blair-Brown years has been the failure to control the U.K.’s borders, through negligence, indifference, and worse: Recently uncovered documents appear to suggest that some of the increase was the product of a deliberate effort to reshape the British population. The welcome mat was noticed. Immigrants have poured in a net annual rate that quadrupled between 1997 (the year of Blair’s first election victory) and 2007, bad news for an overcrowded island wrestling with endemic (if often disguised) unemployment and a sometimes volatile multicultural mix. Unsurprisingly, this issue is a major source of unease to many Britons. According to a DailyMail/BPIX poll of swing constituencies in early March, 45 percent of voters would be “more likely” to vote Conservative if the party were to take a tougher line on immigration, yet Cameron has said next to nothing on the topic. Reports last weekend that the leadership would no longer have any objections to Conservative candidates’ using the I-word in their election literature show just how far things had been allowed to slide. To some critics, the reason for such hesitation, which is by no means confined to the immigration issue, is that the Tories are still preoccupied with fighting a battle they have already won: the fight to show that they are indeed no longer the nasty party.

But there are other critics with a different explanation. Cameron’s policy shifts have won him few real friends among the Tory base. There is respect for his political skills and a grudging recognition that much of what he has done had to be done if the Conservatives were, after three consecutive general election defeats, ever to win power again. The party’s right-wingers accept that their guys had their chance in the 2001 and the 2005 elections and that it didn’t work out. They also know that British voters typically don’t opt for parties where the divisions are too obvious. So, if through frequently gritted teeth, the right has gone along, soothed by the prospect of victory.

As that prospect fades, there’s revived anxiety that Cameron is not, to borrow Mrs. Thatcher’s phrase, “one of us.” Are his attempts to drive the party in another direction as much a matter of conviction as of tactics? These fears have been boosted by a series of recent moves that made no electoral sense, or at the very least were evidence of a leadership that was badly out of touch.

They include an attempt by the Cameron clique (and it is a clique) to force local constituency associations to pick female parliamentary candidates through the use of women-only shortlists. This flew in the face of Tory meritocracy, made a mockery of Cameron’s alleged commitment to grassroots politics, and risked alienating the activists who need to be enthused ahead of the hard slog of a general election campaign. Adding to the irritation on the right has been the leadership’s refusal to use the obvious opportunity presented by the various Climategates to make clear that its commitment to Gore’s war against climate change was not, contrary to earlier impressions, a blank check.

And then, inevitably, there’s Europe. The decision last November by Cameron to renege on his “cast iron” pledge to hold, if elected, a referendum on the EU’s -Lisbon Treaty was logical (the treaty had since come into effect: A British rejection would not be enough to undo it) but dreadful politically. The Tory lead in the polls began to slide shortly thereafter. Making matters worse to a party and a country that is far from friendly to the EU’s ever-expanding reach, in February it emerged that the Conservatives were sending Ken Clarke, the last serving senior Tory still in the grip of europhilia, on a discreet mission to Brussels. Its presumed purpose? To reassure the EU elite that the Conservatives were suitably house-trained.

Cameron is running on a program of—wait for it—“change.” But the electorate is asking just what sort of change this would really be. While the Conservatives would be a considerable improvement on the sleazy and incompetent gang now running Britain, many voters suspect that voting for the Tories will simply mean swapping “progressive” rule by one metropolitan faction with that by another. This view has only been reinforced by the expenses scandals that have roiled parliament and shamed the entire political class. It’s a reasonable bet that small non-establishment parties will, along with “none of the above,” increase their share of the vote this time round. Nevertheless, not being Labour is still probably going to be enough—just—to hand Cameron the keys to 10 Downing Street. After 13 years of Blair/Brown, too much sewage has flowed under Westminster Bridge for voters to want to risk giving Labour another go.

The problem for Cameron is that, in the absence of a massive financial crisis breaking between now and election day, his majority will be small. This will leave him vulnerable when things start to turn rough. And the U.K.’s desperate financial straits ensure that they will. Britain is already brutally taxed. Sooner rather than later the next prime minister will have to slash government spending, and he will have do so against a backdrop of high unemployment, sustained economic underperformance, and the rising opposition of a center-left nation. You can guess where the media will stand on all this.

Mrs. Thatcher found herself in a not dissimilar predicament within a year or so of taking office in 1979. Many of her senior colleagues panicked, but what saved her was the loyalty of much of the Conservative base, a base that the parliamentary party could not risk defying, however much they might want to. She, party loyalists knew, was one of them.

As things are currently going, they won’t feel the same way about David Cameron in 2011.

A Most Uncomfortable Parallel

National Review, January 25, 2010

Let’s just agree that if you are looking for someone with whom to compare Barack Obama, the mid-20th-century British prime minister Clement Attlee does not come immediately to mind. Some might opt for FDR, some the Messiah, others the Antichrist or, harsher still, Jimmy Carter. Attlee? Not so much.

To start with, there’s the whole charisma thing. Attlee was the Labour leader who humiliated Winston Churchill in Britain’s 1945 election, but that victory (one of the most sweeping in British history) was more dramatic than the victor. No Obama, the new prime minister was shy, understated, and physically unprepossessing. Balding, sober-suited, and with an unshakeable aura of bourgeois respectability, Attlee resembled a senior bureaucrat, a provincial bank manager, or one of the more upscale varieties of traditional English murderer. If you want an adjective, “dull” will do nicely. As the jibe went, an empty taxi drew up, and out stepped Attlee. His speeches were dreary, largely unmemorable, and marked mainly by a reluctance to deploy the personal pronoun: Not for Attlee the “I”s and “me”s of Obama’s perorations. Clem was a modest man, but then, said some, he had much to be modest about.

That’s an insult that’s often attributed to Winston Churchill, but almost certainly incorrectly: Churchill had considerable respect for the individual who defeated him. Realize why and comparisons between the stiff, taciturn Englishman and America’s president begin to make sense. For the GOP, they are good reason to be alarmed.

There are the superficial similarities, of both character and résumé. Despite their very distinct camouflages both men are best understood as being cool and calculating, not least in their use of an unthreatening public persona to mask the intensity of their beliefs and ambitions. The two even have in common their pasts as “community organizers,” in Attlee’s case as a charity worker amid the poverty of Edwardian London’s East End, a harrowing and intoxicating experience that drove him to socialism. More important still is their shared eye for the main chance. In a private 1936 memo, Attlee (by then leader of his party) noted how any future European war would involve “the closest regimentation of the whole nation” and as such “the opportunity for fundamental change of the economic system.” Never let a crisis go to waste.

Attlee was right. In 1940 the Labour party was asked to join Churchill’s new national coalition government (with Attlee serving as deputy prime minister), and it wasn’t long before Britain had been reengineered into what was for all practical purposes a command economy. The extension of the state’s grasp was theoretically temporary and realistically unavoidable, but it quickly became obvious that the assault on laissez faire would outlive the wartime emergency. The crisis had overturned the balance of power between the public and private sectors. It was a shift that, when combined with Britons’ widespread perception of prewar economic, military, and diplomatic failure, also shattered the longstanding political taboos that would once have ensured a return to business as usual when the conflict came to an end. With Britain’s ancien régime discredited (it’s debatable quite how fairly), there was irresistible demand for “change.” Prevailing over the Axis would, most Britons hoped, mean that they could finally turn the page on the bad old days and build the fairer, more egalitarian society they felt they deserved.

It is a measure of how far the political landscape had been altered that by March 1943 Winston Churchill was announcing his support for the establishment after the war of “a National Health Service . . . [and] national compulsory insurance for all classes for all purposes from the cradle to the grave,” a stance that echoed an official report published to extraordinary acclaim the previous year. Churchill did, however, take time to warn that it would be necessary to take account of what the country could afford before these schemes were implemented.

Such concerns were alien to Attlee. The abrupt end of American aid in the form of the Lend-Lease program within a month of the Labour victory had left the U.K. facing, in Keynes’s words, a “financial Dunkirk.” The clouds cleared a little with the grant of a large, if tough-termed, U.S. loan, but the risk of national bankruptcy remained real for some years. Attlee pressed on regardless. The creation of the welfare state was his overwhelming moral and political priority. He had been presented with a possibly unrepeatable opportunity to push it through, and that’s what he did. To carp was mere bean counting. If there were any gaps, they could surely be filled by the improvements that would come from the government’s supposedly superior management of the economy and, of course, by hiking taxes on “the rich” still further. Is this unpleasantly reminiscent of the manner in which Obama has persisted with his broader agenda in the face of the greatest economic crunch in over half a century? Oh yes.

There’s also more than a touch of Obama in the way that Attlee viewed foreign policy and defense. A transnationalist avant la lettre, the prime minister thought that empowering the United Nations at the expense of its members was the only true guarantor of national security, a position that made his inability or unwillingness to grasp the meaning of either “national” or “security” embarrassingly clear. It is no surprise that he was reluctant to accept the inevitability of the Cold War with a Soviet Union already on the rampage. Attlee would, I reckon, have sympathized with Obama’s hesitations in the face of today’s Islamic challenge. Mercifully, reality — and the U.K.’s tough-minded foreign secretary — soon intervened. Britain adopted a more robust approach to its national defense (sometimes misguidedly; too many resources were devoted to an unsustainable commitment to some of the more worthless scraps of empire) and a place in the front line against Soviet expansion. In a sense, however, Attlee was to have the last laugh; the long-term damage that his government inflicted on the British economy meant that, even apart from the huge costs of the country’s post-war imperial overstretch, its decline to lesser-power status was inevitable.

But judged on his own terms, Attlee succeeded where it counted most. His nationalization of a key slice of British industry (including the railways, some road transport, gas, coal, iron and steel, the Bank of England, and even Thomas Cook, the travel agency) eventually proved disastrous; his intrusive regulatory and planning regime (not to speak of the crippling taxes he promoted) distorted the economy and retarded development for decades; the costs of the new National Health Service (NHS) instantly spiraled beyond what had been anticipated; and so on and on and on — but, well, never mind. In the greater scheme of things, he won. To this ascetic, high-minded statesman, GDP was a grubby detail and budgets were trivia. What mattered was that he had irrevocably committed Britain to the welfare state he believed to be an ethical imperative — and the NHS was its centerpiece.

And yes, that commitment was irrevocable. While a majority of Britons approved of including health care in their wish list for the post-war renewal of their nation, socialized medicine had not been amongst their top priorities. But once set up (in 1948), the NHS proved immediately and immensely popular, a “right” untouchable by any politician. For all the grumbling, it still is. The electoral dynamics of the NHS (which directly employs well over a million voters) were and are different from those of the likely Obamacare, not least because the private system the NHS replaced was far feebler than that, however flawed, which now operates in the U.S. Nevertheless, the lessons to be drawn from the story of the NHS form part of a picture that is bad news for those who hope that GOP wins in 2010 will shatter Barack’s dream.

At first sight, the fact that Attlee barely scraped reelection five years after his 1945 triumph would seem to suggest the opposite, but to secure any majority in the wake of half a decade of savage economic retrenchment was a remarkable achievement. The transformation of which the NHS represented such a vital part (and the events that made that transformation possible) had radically shifted the terms of debate within the U.K. to the left and, no less crucially, reinforced Labour’s political base. To remain electorally competitive, the Tories (who finally unseated Attlee the following year) were forced to accept the essence of Labour’s remodeling of the British state, something they broadly continued to do until the arrival of Mrs. Thatcher as Conservative leader a generation later. It’s no great stretch to suspect that a GOP chastened by the Bush years and intimidated by the obstacles that lie ahead will be just as cautious in tackling the Obama legacy.

And that will be something to be modest about.

Iceland Without the Fish

National Review Online, February 4, 2009

Gulfoss, Iceland, 2007 © Andrew Stuttaford

If there’s one thing that can be said in defense of Tony Blair and his successor (and former finance minister), Gordon Brown, it’s that they took longer to squander Margaret Thatcher’s economic legacy than some first expected. But squander it they did, and credit’s Armageddon has at last exposed the full extent of the damage.

As Warren Buffett once observed, “You only find out who is swimming naked when the tide goes out.” That’s not the nicest way to visualize Gordon Brown, but, seen from the vantage point of the markets, the view is not much prettier. Stocks have crashed, of course, as they have across the planet, but so, more ominously, has the pound. The British currency hit record lows against the euro at the turn of the year. And when it comes to the greenback, the pound buys less than a buck and a half (it fetched more than two dollars earlier in 2008). That suggests the United Kingdom’s troubles are nastier than elsewhere, a view echoed by the IMF, which now predicts that Britain is facing the deepest recession of any major industrialized economy.

Yes, yes, the pound has gone through other ugly episodes in the relatively recent past, but the present fall (on a trade-weighted basis, sterling dropped by more than 20 percent last year) is the most dramatic since 1931. For the first time since the Labour-controlled mid-1970s, Brits are wondering if they face a genuinely catastrophic collapse in their currency.

For a country such as Britain, burdened with a large trade deficit, devaluation can be a shot in the arm by making its exports more internationally competitive. But that only holds true if there’s a market for those goods in the first place. In a time of shrinking trade flows, nobody can be sure of that. More worrying still, with the U.K.’s combined external debt (public and private) rising rapidly from a total that already exceeds 400 percent of GDP (a gross number, but even so), the usual cost-benefit analysis may no longer apply. Repaying overseas debt in a devalued currency can be a very tricky business, indeed. Will the sceptr’d isle become Iceland without the fish? (The EU took all those.)

In some respects it was only to be expected (if not by Gordon Brown; he’s saying that he never saw this coming) that the land of the much-vaunted Blair/Brown economic miracle is turning out to be more storm center than safe haven. The global meltdown revolves around the embattled international financial system, a system in which the City of London has become a key hub. That role brought a great deal of cash into the United Kingdom, but with it a great deal of risk. The City’s international business has proved, in a sense, to be hot money–fun while it lasts but with a tendency to evaporate in times of trouble. And trouble has now come calling.

The problem for Britain is that, with the financial sector in disarray (and most of the North  Sea oil gone), eleven years of Blair/Brown have left the country with dangerously little else to fall back upon. This was not how it was meant to be. Back in 1997, Tony Blair had won his way into 10 Downing Street as a representative of “New” Labour, a supposedly reformed party ready to renounce the taxing, spending, and relentless class warfare of previous socialist governments, to support free enterprise, and to do what it could to avoid the “boom and bust” cycles that had characterized so much of the U.K.’s postwar economic history. Oh, well–people believed Bernie Madoff, too.

The Blair and Brown governments were careful not to increase the top income-tax rate, but everything else was up for grabs–and was duly grabbed. Overall taxation has risen by far faster than the OECD average and has been accompanied by regulatory excess (much of it, admittedly, at the behest of the EU) and a public-spending binge that long preceded the current emergency but left the country woefully unprepared to deal with it. Gordon Brown may be the son of a Scottish clergyman (who had, marvelously, the middle name Ebenezer), but the whole preparing-for-the-seven-lean-years thing just doesn’t seem to have sunk in. In the decade that followed the 1996–97 spending year, “managed” public expenditure jumped by roughly 90 percent, and that’s before taking account of liabilities incurred but kept off the books with the help of legerdemain that would have shamed Enron.

Under the circumstances, it’s no surprise that the U.K.’s productivity growth has, at best, been uneven, despite (up until now) broadly respectable increases in GDP. It’s perhaps telling that most (around two thirds) of the new jobs created since 1997 have been located in the public sector. What’s more, in a strikingly high percentage of cases, they have gone to recent immigrants rather than to native-born Brits, too many of whom have remained on the dole for too long. We can debate why that is, but we cannot debate the grim fact that nearly 2 million people are now registered as unemployed, a bad number that is getting rapidly worse. Another 2.7 million (more than 7 percent of the working-age population) live on “incapacity benefit,” a handout that defines them as too sick to work–a statistic that implies either repeated epidemics, a failed National Health Service, or a seriously dysfunctional labor market. I know which explanation I’d pick.

If the British are not working enough, they are not selling enough, either. The trade deficit has continued to deteriorate. For goods (“visibles”) it now stands at well over 6 percent, the highest level since proper records began in the late 17th century. In the past, the overall deficit has been narrowed by the U.K.’s ability to export services (many of them, problematically, financial), but this is just another reminder that the City’s relative preeminence is as much an expression of the weakness of the wider British economy as it is of London’s success in playing host to the choosy and itinerant international financial community.

It would be wrong, however, to blame all the horrors that are pummeling the City on Messrs. Blair and Brown. This is a fiasco with deeper and wider origins than the cack-handed fumbling of two economically illiterate politicians, but Labour’s decision to take responsibility for banking supervision away from the Bank of England (historically the country’s most experienced, and most respected, regulator) helped pave the way for disaster. It was a dumb move, made in the name of modernization but more truthfully explained by the Labour government’s disdain for anything smacking of Britain’s past. In America, the existence of a series of distinct financial regulators, each with agendas and areas of expertise all of their own, played no small part in the failure of regulation that contributed so much to the current debacle. Britain’s new tripartite regulatory system (which splits duties between the Treasury, the Financial Services Authority, and the central bank) has proved a disastrous failure for very similar reasons, a failure made all the more galling by its needlessness: Resentment is not a good basis for public policy.

In any event, the U.K. went through a bubble that in all its excess, shoddy lending practices, and baroque speculative mania bore a depressing resemblance to the horrors here in America. To take two numbers cited by Larry Elliott and Dan Atkinson in Fantasy Island (a broadly leftist, sometimes oddball and often fascinating critique of the Blair years), between January 2000 and December 2005, outstanding consumer-credit balances rose by two thirds, and mortgage debt nearly doubled. The appalling consequences are now all too visible in a shattered housing market, on a shuttering high street, and on what is left of the balance sheets of Britain’s devastated and partially nationalized banking sector.

The damage to Mrs. Thatcher’s legacy has therefore already been bad enough, but the financial cataclysm (or, more accurately, the government’s response to it) may well, ironically, make its final destruction Gordon Brown’s best hope of remaining in power. The political reaction to his early attempts to bring a halt to the developing economic disaster shows why.

So what did Brown do? Unburdened by ideological objections to the idea of the state assuming direct stakes in the nation’s banks, the prime minister was the first to borrow (very loosely) from the successful Swedish precedent of the early 1990s and take this necessary (if regrettable) step. At the same time, his government launched a £20 billion stimulus package with, given the shaky state of public finances, little obvious idea of how to pay for it. As The Economist noted in December, even on the government’s “optimistic” projections, borrowing will hit 8 percent of GDP in 2009–10 and debt 57 percent in 2012–13. America’s budget may be a shambles, but with the dollar an internationally accepted reserve currency (for now), the United States at least has the ability (fingers crossed) to print money and buy its way, however imperfectly, however clumsily, out of the present mess. The U.K. does not–thus the tumbling pound.

Initially Brown’s rapid and decisive response played well with frazzled voters desperate to see the government do something. With the financial crisis widely blamed on three decades of (largely imaginary) laissez faire, Labour rediscovered the electoral allure of unashamedly interventionist government. Dour, stern, and carefully wrapped in an image of egalitarian rectitude, Brown came across, however absurdly, as a serious man for serious times. The Tories jeered, but for a while their advantage in the polls faltered: Their impeccably upper-crust leader (who is burdened both by youth and a past in public relations) was caricatured in ways that made him appear a feckless, callow Wooster to Brown’s shrewd, capable Jeeves.

That moment may have passed for now. Swept along by a torrent of economic bad news, the Conservatives are once again clearly ahead. That probably puts paid to the once widely rumored prospect that Brown would call a snap election before the bills finally fall due. Nevertheless Labour’s brief revival was an early warning that this crisis may yet represent an opportunity for a return of the more full-bodied socialism of the party’s destructive past. If Brown is to win another term (an election has to be held no later than June 2010), he will have to shift left. In frightening times in which capitalism is widely (if inaccurately) believed by voters to have failed, there is an obvious opportunity for the hucksters of big, redistributionist government. The announcement that Labour, if reelected, will hike the top income tax rate from 40 to 45 percent (and that’s before onerous social security levies) is only a beginning.

Somehow I suspect that the pound has far further to fall.

Campbell's Soup

Alastair Campbell: The Blair Years - The Alastair Campbell Diaries

The New Criterion, October 1, 2007

It was Henry “Chips” Channon, one of the most entertaining, and informative, of Britain’s twentieth-century political diarists, who asked what was more “dull than a discreet diary.” Quite. Yet in some ways it is the discretion of the diaries just published by Alastair Campbell, Tony Blair’s former press secretary (and much, much more), which makes them so interesting. ]What’s in them, I suspect, matters far less than what’s been left out.

The published diaries amount to “only” 350,000 words out of the more than two million Campbell wrote between starting work for the then-opposition leader Blair in 1994 and resigning some nine years later. The full text is promised for another time, but for now Campbell has, he says, produced a volume focused on Blair himself: “I always intended … to be part of the mix that starts to shape the first draft of historical judgement around him.” Even the admission that this master media manipulator is now spinning history is itself spin. It comes across as candor, refreshing after a decade or so of, well, something else, but he’s only confessing to what everyone had already assumed.

Prior to publication, the diaries were also vetted to ensure that they did not breach secrecy laws or otherwise risk damaging the United Kingdom’s national interest. In addition, Campbell tells us “some conversations so private they will never see the light of day” have been excluded, as have a number of others which “the participants would have assumed to be confidential for some time.” All that’s reasonable enough, but it still leaves hundreds of thousands of words to account for.

Campbell cleverly highlights one area they cover with his claim that he has “no desire” to make the “hard” job of Prime Minister “harder for anyone … let alone Gordon [Brown],”phrasing of such marvelous insincerity that one can only applaud. In writing that, Campbell comes across as public-spirited, loyal, and admirably reticent. At the same time he makes it quite clear that he has the goods on Britain’s new leader, the dour, jealous Chancellor whose Gollum’s quest for the keys to Number 10 Downing Street helped create, define, undermine, and, eventually, destroy Blair’s premiership. Those expecting Campbell to have shed much light on the complex rivalry and partnership between the two men will be disappointed. Worse, bundling Brown offstage destroys any pretensions these diaries may have to offer a properly rounded picture of Blair’s leadership. It’s unfair to compare them to Hamlet without a prince, but less so to say they are an Othellowithout an Iago.

Whatever the sympathy Campbell may claim to feel for the latest holder of that “hard job” he writes so sanctimoniously about, he had none for Blair’s predecessor, the hapless John Major. Campbell was a prominent member of the coterie that orchestrated the destruction of a Conservative government that was nothing like as incompetent or as sleazy as it was smeared, caricatured, and, fatally, believed by the electorate to be. The Labour landslide of 1997 was the culmination of the most brilliant, and the most unscrupulous, election campaign the country had ever seen. Unfortunately, these diaries offer little fresh insight as to how this was done.

In one respect this doesn’t matter. The key element, the transformation of “old” Labour into “New,” has already been explained far better elsewhere. Campbell may have been at the center of these changes, but the portrait he paints of them is partial, admittedly incomplete, and clearly selective. Not for the first time, the reader is simply left to guess at what has been omitted, and why.

A significantly greater disappointment is how (relatively) little Campbell, a former journalist, has to say about the way that he enlisted Britain’s powerful media class as critical allies in the fight against the Major government. Yes, we are told a bit about the wooing of Rupert Murdoch, but there’s almost no discussion of the tactics for which Campbell became infamous, the brutally effective bullying, deception, and intimidation of the media rank and file. Neither does there appear to be much recognition that Campbell was pushing at an open door: a large percentage of the media class wanted the Tories out.

For Campbell to concede this would, I reckon, have meant accepting that his (undeniably enormous) contribution to the 1997 victory was slightly less than he believes. It would also make nonsense of his obsessive contempt, even hatred, for the media that gathered pace, rancid, vitriolic, and increasingly unbalanced, as the years went by. Given the position that Campbell held, this fury and this disdain are deeply disconcerting. What makes it even more remarkable is that media coverage of the Blair government was, as it happens, broadly supportive until the Iraq war.

The real problem, of course, was that any carping was unacceptable to those at the helm of the New Labour “project,” a project that was, at its core, both profoundly authoritarian and tinged with a gimcrack messianism. What must have made this criticism (such as it was) all the more galling was that it persisted despite the extraordinary efforts made to smother, bludgeon, blunt, and derail it. These went beyond the abuses of the opposition years (although those continued in office, unabated and, in these diaries, largely, and absurdly, unmentioned) and extended into the machinery of government itself. Within days of Labour’s win, and with the help of nifty legal and procedural footwork, Campbell was given the authority to tell civil servants what to do. The political impartiality of the civil service was one of the many British traditions to take a battering under the new regime. As one of Campbell’s shrewdest critics, the commentator Peter Oborne, has noted, “within two years of taking power … New Labour had sacked seventeen of the nineteen information chiefs in Whitehall, a staggeringly high turnover.” Draw your own conclusions. In fact, you’ll have to: Campbell has tellingly little to say on the subject.

None of this is to argue that there’s nothing in these diaries worth reading. On the contrary. Neither press secretary nor any of his later, grander titles do full justice to Campbell’s role. He was not only Blair’s principal propagandist and most feared enforcer, but also a key policy adviser, Bobby, in some respects, to Tony’s Jack. He was, therefore, a diarist in the right place at the right time. Whether it’s on Northern Ireland, the Balkans, the Iraq crises, the response to 9/11, or the neatly drawn descriptions of British and international statesmen from Blair to Clinton to Yeltsin to George W. Bush, there’s plenty here to digest, even if not much of it is very new.

Finally, and try as hard as he might to avoid it, by the end of these diaries its author has revealed something of himself, above all that he (a former alcoholic with a history of depressive illness) is a man driven, even if it’s never exactly clear by what. There are the shreds of ancient socialist orthodoxy (a fanatical attachment to Britain’s failed state school system), and, almost certainly related to that, there is the class resentment left over from his misfit youth (which in turn dovetails neatly into the more iconoclastic aspects of the New Labour “modernization” of the United Kingdom). Then there is the delight—wild, baroque, and ecstatic—that he takes in hating those on his enemies list. The poisonous media, the wretched Tories, a Labour minister or two, whoever; it’s the hating that’s the thing. Or perhaps the secret lay in the exercise, and the narcotic, of power. In any event, whatever it was that drove Campbell, Blair saw that he could use it, and he did.

And as to what that says about Tony Blair, once again you’ll have to draw your own conclusions.

Chimps, The Cheshire Cat & The Fall of Tony Blair

National Review Online, May 26, 2005

When, after a great victory, a Roman general marched in triumph surrounded by plunder, captives, and, quite probably, hot chicks, he was always accompanied by a slave whose job was to hiss periodically in the great man’s ear the irritating reminder that he was only human, not a god. Something a bit like this (well, I don’t know about the plunder, captives, and hot chicks) happened to Tony Blair in the aftermath of his party’s triumph in the recent British elections. Within hours of victory, numerous Labour politicians lined up to tell Blair to get lost. Former foreign minister Robin Cook took time out from his usual bilious routine to report on the views of the nation’s boulevardiers. “Anyone on the streets knows we were not elected because Tony Blair was popular....” Another former, a former health minister better known for the elections he has lost than those he has won, said it was time for Blair to go. Former actress and current hysteric, the shrilly leftist MP Glenda Jackson chimed in with the claim that the “people have screamed at the top of their lungs. And their message is clear. They want Tony Blair gone.”

Well, Glenda, in case you weren’t paying attention, the people have just made Tony Blair the first Labour prime minister to win three consecutive election victories. While the party’s parliamentary majority was substantially reduced, it remains, well, substantial.

To the novelist and journalist Robert Harris (an old friend of Blair’s Svengali, Peter Mandelson, but a clear-eyed judge of British politics nonetheless), this all looked like madness: “it does not…require a political genius to see…that it is a thoroughly bad idea for a minority party-cabal to bring down an elected prime minister. The Liberals did it to Asquith in 1915 and have never gained power again. The Tories did it to Thatcher… and have since suffered three successive election defeats… Now Labour, like a chimp examining a loaded revolver, shows alarming signs of the same casual attitude to its political extinction.” Harris noted that an opinion poll conducted shortly after the election had shown some 83 percent of those who had voted Labour said that Tony Blair should stay on for at least another twelve months.

The same poll, however, revealed that over 60 percent of Labour voters want Blair out within three years, an indication, perhaps, that all is not rosy for Tony. And it’s not. Take a closer look at the stats: the Labour party’s share of the vote, a dodgy postal ballot or two over 35 percent, was the lowest enjoyed by an incoming government for nearly 200 years, and impressive as Labour’s haul of parliamentary seats undoubtedly was, it came in at well below the total secured in the previous two general elections. The number of votes cast for the party has slumped by a third since the 1997 election that swept Blair into power. For the first time in a decade, many Labour MPs are sweaty, anxious, and paranoid about their parliamentary futures, something that bodes ill for Blair’s.

It seems a long, long while since the bright, confident afternoon that Tony Blair first took possession of 10 Downing Street to the cheers of a supposedly spontaneous jubilant flag-waving crowd (in fact Labour-party workers and their families, but never mind). Years of spin, manipulation, and dishonesty, made all the more grating by relentless prime ministerial preachiness, have made Blair a deeply distrusted figure, part curate, part conman, all charlatan. Of course, there’s nothing new about the British loathing a repeatedly reelected prime minister—there were few politicians so disliked as Mrs. Thatcher at the height of her powers—but Blair has to contend with a threat that never really troubled the Iron Lady: the Labour party.

Once firmly established in Number Ten, Mrs. Thatcher could always rely on the adulation of her party’s rank-and-file and, until the Gadarene meltdown of November 1990, her MPs. Tony Blair cannot. As Labour leader he has filled an abattoir with the slaughtered sacred cows of party orthodoxy. This has won him elections, but lost him the love, affection, and loyalty of his activists. They, poor souls, remain trapped in a mindset that blends traditional working class belligerence with the idiot radicalism of a third-rate provincial university. To them, Tony is the outsider, the toff, Bush’s poodle (pick your insult), a necessary evil to be tolerated only so long as he brought in the votes.

And that means that Blair is now looking very vulnerable indeed. At the election Labour lost most ground in those parts of the U.K. where his emollient appeal had once been greatest. The affluent southeast has largely returned to its Tory roots. In England itself more voters opted for the Conservatives than for Labour. Labour is once again dependent on its traditional heartlands, the industrial north, and those grim socialist satrapies better known as Scotland and Wales, territories where Blair’s message has very limited intellectual, emotional, or electoral appeal.

Compounding his weakness, Blair has already said that he will resign before the next election. Quite why he chose to hobble himself in this way remains unclear. It’s probably best to ask Blair’s chancellor of the exchequer (finance minister) and presumed successor, the sulky, scowling, and increasingly impatient Gordon Brown. In circumstances that have been obscured by controversy, mystery, and mudslinging Blair may (or may not) have promised to step down in favor of Brown at some time during his first term and he may (or may not) have promised to step down in favor of Brown at some time during his second. He may also have sold his chancellor the Brooklyn Bridge, a secondhand Pinto, and a three-dollar bill. Who knows? In any event, it’s 2005 and Blair’s still in office, but the trusting Mr. Brown has finally and painfully come to the same conclusion as the rest of the country. “There's nothing,” he told Blair, “you could ever say to me now that I could ever believe."

Eventually, Blair did what he always does (or may not have done) on the previous occasions that he needed to keep Brown onside: He promised to stand down at some point in his next term, but this time, there was a difference. He made that promise in public. The moment he did, the game was up. Politicians at Westminster, a British journalist told me, know that Blair is mortally wounded, “they can see the trail of blood all across the lobby floor.” Power, sycophants, and the ambitious are all ebbing from the prime minister, as Gordon Brown, whose fondness for some of old Labour’s more numbskull pieties has already made him the party’s darling, painstakingly cements his hold over the constituencies he will need to assure him the premiership, a union leader here, a key MP there, a friendly journalist here, a member of the House of Lords there. According to some estimates there are now three times as many Brownites as Blairites within the ranks of the parliamentary Labour party.

Superficially, Blair’s actions since the election seem to show that the maestro has lost none of his touch. The usual crop of meaningless, destructive, and plain dumb "reforms" have been announced, the House of Lords has been stuffed with another batch of cronies, dubious government appointments have been made and dissidents have been roughed up at a parliamentary-party meeting. But this is all flim-flam, flash, and empty glitter, a show that signifies nothing. A better indication of where power now lies comes from the fact that Blair was unable to push through many of the personnel changes he wanted in his new administration, a deeply humiliating rebuff for any newly reelected prime minister, let alone one who has been in office for the better part of a decade.

And the misery doesn’t end there. Blair has for a long time delegated large amounts of the domestic agenda to his chancellor (that was part of the agreement between them), but now, after Iraq, even his hold over foreign affairs is palsied, feeble, and pointless. Britain’s EU policy is a shambles, and so far as the threat from Islamic extremism is concerned, the idea that Blair could bring his party with him alongside the U.S. in doing anything that lacks the approval of the "international community," Hollywood, the Guardian and the New York Times is absurd. All that is left to Blair now is the peddling of a grandiloquent, if benign, idea—saving Africa—ripped off from a rock star.

The next step in Blair’s decline will be guerrilla warfare> against his government from the Labour Left, but this will not be enough to unseat him, and nor, probably, would Brown want it to. Despite a history of awe-inspiring and entertainingly destructive temper tantrums, Brown, like Harris, clearly understands that a coup could come at a terrible electoral price. He has resisted the temptation to play Brutus in the past, and he will do so again. He wants to inherit a united party. Ideally Brown wants that “smooth and orderly” handover that Blair is always talking about, but sooner, please, please, sooner, please, please, sooner, rather than later. So when might that be? Before the election, conventional wisdom was that Blair would oblige his impatient heir about three years into his final term, now the talk is that he might quit next year.

The problem is that there is still no obvious moment for Blair to go. Given his druthers, the prime minister, who is still only 52, would probably prefer to soldier on up to the last minute or, quite frankly, beyond. If he does have to go, this most theatrical of politicians will want it to be on a high note. The conundrum for Blair—and Brown—is that there aren’t many potential high notes around. It’s long been mooted that Blair should resign after tricking the Brits into voting for the EU’s draft "constitution" in the autumn of 2006, but so far his stubbornly euroskeptic countrymen show few signs of playing along. Of course, a British "no" might also signal the end of Blair’s show, if not quite so gloriously as he would have wished. Needless to say, all this may soon become academic: If the French and the Dutch reject the constitution in the next week any British vote may be shelved indefinitely.

The British economy won’t be much help either. After eight years in office, it looks as if Labour is finally going to have to start paying the price for the way in which it has squandered the golden inheritance of the Thatcher-Major years. Quite how this will reflect on Gordon Brown, as Chancellor the man most responsible for the coming mess, is hard to say, but increasingly unappetizing economic news will mean that Blair’s departure will look more like an exit from the scene of the crime than the glorious finale of which he must dream.

So nothing’s certain other than months, and perhaps, years of intrigue, febrile speculation and plots as Blair’s premiership fades, fades, and fades away until, like a New Labour version of Carroll’s Cheshire Cat, all that will be left is an oddly compelling smile, faint, strained, and insincere.

The Trouble with Tony

National Review Online,  May 3, 2005

It can be a lonely business being a critic of Tony Blair in this country — outside, at least, the fever swamps of the far Left. Speaking at a crowded debate in downtown Manhattan last week, my myopic eyes could only find one brave individual who agreed that the British prime minister did not deserve reelection As my solitary supporter (thanks Myrna!) writes for NRO, I suspect kindness to a beleaguered colleague played no small part in this welcome gesture of support. Perhaps my feeble, muttered oratory was to blame, or was it the arguments skillfully marshaled by my opponent?

Maybe, but it’s just as likely that this result was mainly a reflection of the American infatuation with Tony, the saint, the hero, the Churchill with hair, but no cigar. Whenever I post any criticism of Blair over on The Corner a few angry e-mails usually come my way. Their gist: Blair is a great, great man, America’s ally; don’t bother us with the internal squabbles of your miserable little islands. This misses the point. In understanding why Tony Blair deserves to lose, remember that he’s the prime minister, not of the world, but only of those unfortunate specks in the sea. He may have been good for America, but he’s been bad for Britain.

And yet, when Britain votes on May 5 Blair will win. The only question will be by how much. But this seemingly inevitable success will owe little or nothing to Blair the international statesman (it will not be a referendum on the war, which, however unfairly, has done little for Blair other than to bolster his reputation for untrustworthiness) and almost everything to an economy that appears, however deceptively, still to be ticking over quite nicely. Critically too, Blair benefits from the weakness of an opposition seen by most voters as unprepared for prime time.

Beyond the usual ragbag of Celtic nationalists, single-issue campaigners, maniacs, madhats, and cranks, there are two opposition parties that count, one worse than Labour, and one better. The one that is worse, the Liberal Democrats, is the successor of a party that has not won an election since it dragged Britain into the First World War (thanks guys!) and it is not going to now. Nowadays it is a pro-tax party of the left that calls itself centrist, defines itself by its opposition to the liberation of Iraq, and has an alarming tendency to appeal to the sort of men who like to wear socks with their sandals.

The Conservatives would, at least, be an improvement on Labour. They aren’t much, but they’ll do (come to think of it, that should be their slogan). After the traumas of recent years, they have been reduced to a rather tatty rump, led by a man sometimes compared to a vampire (well he has been endorsed by Christopher Lee), but, given the obstacles they face, this is inevitable. Nobody entirely normal would agree to take on the task of toppling Labour. That this is such a challenge is a measure of the Conservatives’ failure. Labour rule has been marked by sleaze, spin, economic mismanagement, relentless political correctness and a chaotic immigration policy, a record that, given more effective opposition, should be enough to ensure defeat.

Of all the blots on Labour, it’s the sleaze that is the most ironic. Accusations of "Tory sleaze" played a very large part in helping Blair to his 1997 landslide. These were often unfair, but sometimes deserved. The Conservatives had shown themselves increasingly prone to the petty — and occasionally not so petty — corruption that characterizes political parties in power for a long time. Throw in John Major’s ill-advised, and impertinent, family-values campaign (which opened the door to a relentless procession of revelations about naughty Tory MPs), and Tory sleaze, whether it was payments in brown envelopes, numerous adulteries, dodgy foreign donations or, even, an autoerotic disaster, became the media story of the day, the month and the year.

Labour was going to be different — and so it was if not quite in the way (“purer than pure”) that the electorate had been led to believe. Labour scandals may have actually exceeded anything associated with the Conservatives, and might even include the electoral process itself. In an attempt to boost turnout by its supporters Labour has made it much easier to vote by post. To the judge presiding over an election court (the first to be summoned to investigate corruption for more than a century), the new system is an “open invitation to fraud” — an invitation apparently accepted by a number of Labour politicians in Birmingham. And if it’s happening there, where else?

But the most important thing to understand about Labour sleaze is not that the entire national party is corrupt (it’s not), but what it reveals about a government that became too used too quickly to the exercise — and abuse — of power. In eight years in office it has wrecked civil-service neutrality, taken a chainsaw to the constitution, packed the House of Lords with its cronies, and never seen a freedom anywhere that it did not want to crush. Worried about overreach by the "religious Right" over here? Well, take a look at Blair’s plans to make incitement to "religious hatred," whatever that might be, a crime. Salman Rushdie is horrified and he is right so to be.

And then there’s Britain’s economic performance since 1997, supposedly the definitive proof that "new" Labour has shed the caveman economics of the party’s past. Writing a panegyric to Blair in a recent edition of the New York Times, Tom Friedman managed to conjure up a portrait of Britain so misleading that Baron Munchausen would have been proud to call it one of his own. In between sips of Kool-Aid, Friedman gushed about the strong economy “engineered” by Blair and his “deft” finance minister, Gordon Brown. New Labour had, he argued, embraced the free market with such gusto that the resulting prosperity had enabled the government to deliver much-needed improvements to public services: “And these improvements, which still have a way to go, have all been accomplished so far with few tax increases. The vibrant British economy and welfare-to-work programs have, in turn, resulted in the lowest unemployment in Britain in 30 years. This has led to higher tax receipts and helped the government pay down its national debt.”

Oh really?

Now, it is certainly true that Britain has continued to prosper since Labour took over, but with one exception — the bold decision to give the Bank of England operational independence — this is despite Labour, not because of it. In 1997, Blair and Brown took over an economy that was already in excellent shape. The only surprise has been how long it has taken them to mess it up. Contrary to the fears of many skeptics (including this one), they had learned from the failures of previous Labour governments. The traditional smash and grab has been replaced by something subtler, but the consequences will, in the end, be just as poisonous.

Much of the blame for this lies with that “deft” Gordon Brown, the oddball Scot to whom Blair has delegated control of the British economy. Brown is living, snarling, and sulking proof of P. G. Wodehouse’s observation that it is “never very difficult to distinguish between a Scotsman with a grievance and a ray of sunshine.” To cut a (very) long story short, Brown believes that Blair reneged on a promise to hand over the premiership to him at some point during his second term and, while he bides his time, impatiently waiting to play Brutus to you-know-who’s Caesar, he is taking out his rage and disappointment on the luckless British taxpayer.

Brown is an intense, slightly loopy son of the manse, a weird blend of Karl Marx and Ken Lay, whose term in office has been marked by messianic egalitarianism, exciting accounting and resistance to the real reforms needed to bring Britain’s crumbling public services into the 21st century. Rather than challenge the existing model (which dates back to the 1940s) his only remedy is to throw people and pay rises into what has become a bottomless pit. Overall public spending has increased by over a quarter in real terms since 1999, and there’s much, much more to come. Half the new jobs created since 1997 have been in the public sector, twice the rate of job-creation in the economy as a whole. The state now employs one in four Britons, a handy constituency, doubtless, for future Labour governments, but a powerful brake on future attempts at reform. Needless to say, Brown is beloved by Labour party loyalists and he will almost certainly be Blair’s successor. A vote for Blair now is a vote for Brown in a year or so.

Paying the bill for Brown so far has sent Britain’s tax burden heading for its highest levels in 25 years and government borrowing is accelerating alarmingly. In 2001 Brown forecast he would borrow 12 billion pounds over the following six years, the actual figure will be (touch wood) 112 billion pounds. Include Brown’s, um, off-balance sheet financing, and government debt has increased by 13.4 percent of GDP under Labour, a dismal achievement at a time of consistent economic growth. The tragedy is that all this spending has produced little in the way of results. Education standards have barely budged and productivity in the National Health Service may have actually declined. That’s not a lot to show for all those taxpayer billions.

And the cracks are beginning to show: crippled by one of Brown’s stealth taxes, the occupational pension system is in crisis, private savings have fallen by a half, inflation is rising (the day Brown took over it was 2.6 percent; it is 3.2 percent today) and the trade balance has deteriorated. Allocating all those resources to the public sector has taken its inevitable toll, made even worse by the imposition of a massive regulatory burden (now priced at £75 billion): productivity growth is slowing (2 percent to 1.5 percent), and GDP growth is slightly lower (2.75 percent) than in the Major years (3 percent).

And if, as Blair intends, Britain signs up for the draft EU "constitution," matters will only get worse. The U.K. will be forced to give up what is left of Thatcherite deregulation in favor of micromanagement by Brussels and the adoption of the Franco-German economic model, a sure route to economic stagnation.

Just as damagingly, once enmeshed within the EU’s constitutional system, Britain will rapidly lose the right to an independent foreign policy. It’s this freedom that has enabled Blair to stand so resolutely alongside the U.S. over the last few years, the stance that has won him so many admirers over here. To his credit, the prime minister has been prepared to react to the threat represented by Islamic fundamentalism far more forcefully than most European politicians and to his credit, and at considerable political cost, he also understood what had to be done in Iraq.

But taking such positions will be all but impossible once the UK is subject to the disciplines of the EU constitution. Article 1-16 commits all member states to a "common foreign and security policy." Member states are required to "actively and unreservedly support the Union's common foreign and security policy in a spirit of loyalty and mutual solidarity and shall comply with the Union's actions in this area. They shall refrain from action contrary to the Union's interests or likely to impair its effectiveness." This is quite clearly designed to pave the way for a European defense capability owing little to the Atlantic alliance, and everything to the agenda of Paris, Berlin, and Brussels.

For Brits, that’s another good reason to reject Blair, and it even ought to make his American fans pause for thought.