Wendy Alexander. Labour sleaze - again

What is it about Labour and expenses? As Wendy Alexander departs tearfully into history after the latest donations scandal, the question has to be asked: how could a nominally socialist party get into such difficulty with money? Wendy is the second Scottish Labour leader to have resigned over a funding scandal in less than seven years. In 2001 the former Labour First Minister, Henry McLeish, resigned over his failure to register earnings from the subletting of his Fife constituency office. Like Wendy’s misdemeanor, it was “a muddle not a fiddle” but somehow McLeish ended up falling on his sword nevertheless.

More recently we had the former Labour cabinet minister Peter Hain resigning in January over late declaration of his own leadership campaign funds. He is still nominally “clearing his name” while the police investigate his bookkeeping. The deputy leader of the UK Labour Party, Harriet Harman, was lucky to escape Wendy’s fate when she admitted recently to accepting a donation of £5,000 from a property developer under an assumed name. Proxy donations are illegal under Labour’s own law on party funding.

Expenses will no doubt figure again in the forthcoming Glasgow East by-election following press allegations about the former Labour MP David Marshall’s employment of relatives on his parliamentary allowances. The practice of Labour ministers using their expenses to furnish their second homes - the infamous “Lewis's list” - provoked public fury, not least because of the ludicrous attempts by the Speaker, Michael Martin, to prevent public disclosure of the purchases. A cover up when there was no actual crime.

These episodes occurred in the backwash from the cash for honours scandal, which plagued the final year of Tony Blair’s premiership. Week after week through 2007Number Ten aides like Ruth Turner and sleek fund-raisers like Lord “Cashpoint” Levy were arrested and questioned about Labour’s dealings with businessmen. The scandal arose because a number of millionaires, like the Curry King Sir Gulam Noon, had been nominated for peerages for no apparent reason other than the fact that they had made secret loans to the Labour Party. The businessmen had been asked to give loans rather than straight donations to the party because this meant they would not have to be declared publicly. So secret were the loans that even the treasurer of the Labour Party, Jack Dromey, didn’t know about them.

Clearly, it is the non-disclosure element which is the common thread in recent Labour financial scandals. Labour is just not happy admitting where it gets its money from - or rather where it USED to get its money since few businessmen are now willing to risk the opprobrium of donating money to Labour. Wendy Alexander’s problems arose when the Sunday Herald revealed last November that she had accepted an illegal campaign donation from a tax exile. The donation, from the Jersey based property developer Paul Green was for £950 - just under the threshold for disclosure - or what Labour believed was the threshold for disclosure.

Many of the sums raised for Wendy’s leadership campaign-that-never-was were set at just under the magic figure £1000. You wonder why they should go to such lengths to keep donations out of the public eye? Did they feel uncomfortable admitting the sources of their funds? Were they concerned about accusations of conflicts of interest in being seen to accept money from businessmen who had dealings with Labour councils in places like Glasgow? As politicians are wont to say: you would have to ask them that.

But the amounts of cash were so small it beggars belief that they should have taken the risk. Labour’s Political Parties, Elections and Referendums Act, 2000, was designed to stamp out sleaze once and for all by requiring that politicians disclose every penny they receive from outside sources. It is a zero-tolerance statute intended to make the whole area of campaign funding open and transparent. Similarly, the independent Commissioner for Standards in the Scottish Parliament, Dr Jim Dyer - who fingered Wendy Alexander - is required by law to investigate fund-raising irregularities and to recommend action when there are breaches of the code. He is not an SNP stooge as has been suggested.

Labour's problems arise, not from press harassment or vexatious nationalist complaints, but from its repeated attempts to circumvent its own rules. The scandal earlier this year over the secret donations made by the north of England property developer, David Abrahams, is a classic case. Labour’s former general secretary, Peter Watt, agreed that Mr Abrahams should be allowed to donate £600,000 to prominent Labour politicians through intermediaries - some of whom didn’t even know the donations were being made in their name. Mr Watt said he didn’t realise that giving donations under an assumed name was illegal. But surely, given the publicity surrounding party funding he should had realised instinctively that there was something dodgy in the arrangement. Again, why take the risk? Mr Watt had to resign over this flagrant breach of the law.

Now, Labour say with cause, that this is not just their problem, and I would have to agree. The Tories have been matching Labour scandal for scandal, but somehow David Cameron doesn’t seem to be getting the same heat for it. The Tory chairman, Caroline Spelman, is under pressure to resign over accusations that she paid her nanny out of parliamentary allowances. The leader of the UK Conservatives in the European Parliament, Giles Chichester, resigned earlier this month over misuse of his parliamentary expenses. Another Tory MEP, Den Dover, denied breaking any rules in paying his wife and daughter a reported £750,000 for work over nine years. He has been replaced as party whip.

Back in Westminster, the husband and wife team of Tory MPs, Sir Nicholas and Ann Winterton, have been no slouches when it comes to harvesting expenses. They were widely criticised recently for claiming up to £66,000 in housing allowances since 2006 on a home they already owned. The sleaze of the year prize must go to the Tory MP Derek Conway who lost the party whip after it emerged that he had employed three members of his family, including two sons who didn’t appear to do any work.

So, why have these scandals not been dominating the media Why do we see no headlines claiming: “New Sleaze Scandal Rocks Cameron”. Perhaps we can’t cope with too many sleaze scandals at any one time. Labour have commanded most of the attention through their self-destructive addiction to breaking their own rules; and they are also the government, which makes it even more important for them to abide by the letter of the law.

Yes, politics is a tough old game, as Wendy Alexander has found out. Maybe Labour's rules were too strict. I know its a cliche, but the politicians really have only themselves to blame.

Wendy Alexander resigns. The End.

“This is actually a good outcome for us” a former Westminster Labour minister told me as Wendy Alexander delivered her resignation statement on Saturday morning. Well, politicians are supposed to put a brave face on adversity, but seeing silver lining in the resignation of Labour’s second Scottish leader in less than a decade over expenses irregularities - the first being the former First Minister Henry McLeish over those constituency sub-lets - was a towering achievement of political optimism.

What I suspect he meant was that Labour could at least blame the SNP for Wendy’s downfall. That it was the result of a politically motivated stitch-up by the nasty nats and their stooges like, er, the Scottish Standards Commissioner, Jim Dyer - who might have his own views about the accusations of political bias. He it was who recommended to the Holyrood Standards Committee that action be taken against Wendy Alexander for breaking the rules on disclosure, rejecting the view of parliamentary clerks that campaign contributions did not need to be registered on the members interest register.

Complex issue it may be, but when Labour complain about these rules on disclosure damaging politics and underming parliamentary democracy they would do well to remember that it was their own government that introduced them. One has sympathy with Wendy Alexander over the apparent confusion and the contradictory legal advice she received - but why did she not just register the damn contributions to her leadership campaign in the first place? Why leave herself open to accusations of a cover up by sitting on them for two months? Surely politicians realise that you cannot take money from business contacts anymore without being transparent and open about them.

Wendy Alexander talked of “vexations complaints” from the nationalists. Actually, as readers of this newspaper well know, the intelligence about Wendy Alexander’s campaign contributions entered the public domain, not via the SNP but through stories in the Sunday Herald from Labour sources. The formal complaints came later from members of the public with nationalist connections. It is worth remembering that the cash-for-questions investigation in Westminster arose out of a legitimate complaint made by a nationalist MP, Angus Brendan MacNeill (check name) after reading press accounts of businessmen receiving peerages after giving secret loans to the Labour Party..

Perhaps the bigger question is whether it was really necessary for Wendy to resign over a one day suspension by the parliament’s standards committee which might well have been rejected by the full parliament in September? Wendy Alexander and her Westminster bosses realised that her leadership simply wasn’t working, that she was being overwhelmed by Salmond, and were looking for a suitable ‘out’. There was a mutual interest in bringing this episode to an end, which is why many Labour politicians at Westminster are as relieved to see the back of her as she is to see the back of the job. It must have been sheer hell for Wendy trying to lead a defeated party with precious little support in Holyrood and and the active contempt of her own party in Westminster.

The collision with Gordon Brown last month over Ms Alexander’s call for a referendum on independence left serious damage on both sides. Westminster Labour MPs and ministers were incensed at Wendy Alexander’s decision to adopt the nationalist policy of giving Scottish voters the right to choose. Gordon Brown still refuses to accept that she actually called for a referendum. Wendy Alexander, for her part, has repeated her call on several occasion, most recently on BBC Question Time a fortnight ago.

When I spoke with her at length shortly before her resignation about her political beliefs, she told me that she had transformed Labour in Scotland. She claimed three achievements: the independence referendum, the Calman Commission and support for tax raising powers. Wendy was confident that she had fundamentally changed Labour in Scotland, and that it didn’t matter that the prime minister, or Westminster Labour MPs, didn’t go along with her. In Holyrood she was the boss, and this was Wendy’s law.

The question now, following her departure, is whether Wendy’s law still rules. Will her successor endorse the independence referendum and a federal Holyrood with tax powers? Cathy Jamieson, the deputy leader who is standing in as caretaker, presumably will. But when it comes to finding a successor to Wendy Alexander, will there be anyone with the courage and determination to continue in this neo-nationalist direction? I have my doubts.

One suspects that Number Ten will want to take a close interest in who takes over from Wendy. Andy Kerr? A safe pair of hands, former health minister, undistinguished. Iain Gray? Only just returned to parliament,did not distinguish himself in the budget debates. Ms Jamieson probably has the best claim to the job, and has performed creditably at question time on the two occasions when she has stood in for Wendy Alexander. She comes from the left of the party and probably speaks more directly to its Scottish soul - or what is left of it.

For there are real questions now about the future of Labour in Scotland. That its fifty year hegemony is over is beyond doubt. But what is left of the movement that used to dominate Scotland at every level of government. They have lost half their councillors and control only two of Scotland’s councils. The party is in financial ruins, with donations drying up and trades unions turning away. The activist base has largely been destroyed by a decade of new Labour policies like the Iraq war and renewal of Trident. Of course a great political party like Labour cannot simply die - though I would expect more than a few defections to the SNP in the coming months, if London Labour reasserts control. But where does it go now?

Wendy Alexander may have lacked many of the skills necessary for political leadership, but her analysis of the political situation in Scotland was sound. To meet the nationalist challenge, Labour has to detach itself from Westminster and become more of a Scottish party - yes, more like the SNP. It can only do this by adopting an explicit federal agenda, calling for an autonomous Scottish parliament, with economic powers. Wendy Alexander would not call herself a federalist as such, but when I last spoke to her she was content to be described as taking Scotland in a broadly federal directionton. She did not rule out broadcasting, for example, being devolved to the Scottish parliament.

Whoever takes over from Wendy will have to accept the logic of her political analysis. There really is no alternative. If she is replaced by a stooge, who rejects the independence referendum, neuters the Calman Commission and tries to play by the London rules, then Labour really is doomed in Scotland. This is their last chance to get it right before they hand the keys of Scotland to Alex Salmond.

Henley By Election. Labour beaten by the BNP

When he called for “British jobs for British workers” in that infamous conference speech, who could have imagined that, within eight months, Labour would be beaten by the British National Party in a by-election. Labour never expected to come anywhere in Henley - one of the safest Tory seats in the land. But never before has Labour come fifth while in government and to end up behind the BNP is Brown’s ultimate humiliation. And on the first anniversary of his entering Number Ten.

It just can’t go on like this. In the last two months, Brown has suffered Labour’s worst local government losses since 1968 in the English local elections. He has lost the London Mayoral elections to the Tories and the safe Labour seat of Crewe and Nantwich. Next up: another stunning by-election defeat in the old Glasgow Shettleston seat, where David Marshall is standing down due to ill health. Then a Scottish parliamentary by-election in Wishaw when the Labour MSP Jack McConnell departs for Malawi.

On the same day as the Henley by-electon disaster, Labour’s Scottish leader, Wendy Alexander, became the first leader ever to be suspended from a British legislature, following her fund-raising imbroglio. Her resignation may seem a side bar to the implosion of the Brown government, but it is not an insignificant one. Labour has always depended on its bedrock of Scottish seats for its security in Westminster. Now, even that is in doubt.

Labour is slipping into the abyss north and south of the border. In the latest YouGov/Telegraph poll on UK opinion, only 3% said they thought Brown an improvement on Tony Blair. Two thirds believe he is an electoral liability for his own party. The Tories are 20% ahead in the opinoin polls, enough to deliver a majority of around 177 were an election to be called soon. The psephalogical oracle, Professor John Curtice, has spoken: no leader has ever recovered from a collapse so dramatic. With an unpopular leader, an economy going down the toilet and a government bereft of ideas or imagination, just muddling through isn’t an option.

Of course, a week is a long time in politics and less than a year ago, Brown was comfortably ahead of the Tories in the polls while David Cameron’s leadership was in difficulties over grammar schools, Europe and the environment. But the past is another country. The significance of Henley is that the Tories gained directly from the Labour slump, rather than via a swing to the Liberal Democrats. Cameron is now being taken seriusly as a possible prime minister, and his party - so demoralised and ideologically confused last year - has regained its confidence, in a way only the UK Tory party can.

Yes, political leaders have suffered disastrous poll slumps before. Think of Bill Clinton in 1994, when he lost Congress and seemed finished. He came back from oblivion, say Labour, and so can Brown. But our system is not a presidential one. In America, presidents can always fall back on the dignity of office and respect accorded to the head of state - think of the West Wing. Here, the prime minister is only primus inter pares - first among equals - and is regarded as inherently fallible, which explains why, when prime ministers lose it, they really lose it.

And Brown has clearly lost the plot. No one knows what he stands for, even members of his own cabineet. Whether it is the election-that-never-was, the Iraq withdrawal-which-never -was; Lisbon Treaty, the Olympic torch, 42 day detention, the 10p tax rate, the independence referendum, Brown has been all over the place. We are told by his aides that the prime minister has been quietly working his way through the undergrowth of British social inequality, stealthily redirecting wealth to single parents and the poor, bolstering child care, promoting green energy, easing the credit crunch... But all we see of this is dodgy deals with the Ulster Unionists, transparent tax bribes that don’t work, patronising lectures about wage restraint while the City enriches itself amid the wreckage of the financial system.

There is an air of split personality about the PM - he is a Jekyll and Hide Prime Minister. There is the social democratic, internationalist Brown, a tolerant and confident leader with great intelligence and a vision for the world. But there is another Brown: an obssessive, manipulative and dithering appeaser, who lacks the courage of his convictions when dealing with the Chinese dictators, Eurocrats and the editor of the Daily Mail. Mr Hide seems to be in the ascendant.

‘Lefty twaddle’ say the prime minister’s apologists. Brown has been playing the right tunes, it’s just that he cannot be heard against the crashing and crunching of the world economy. He can’t help it if American banks start handing home loans to people with out jobs or assets. When the economy turns down, political fortunes fall with it - same as happened with the Tories in 1990-92. It’s the economy, stupid.

No, it’s the excuse that is stupid. The whole point about Brown was that, as ‘the most successful chancellor in 200 years’ was supposed to be the ideal person to have at the helm when the economy enters stormy seas. I recall Labour people telling me that a bit of economic turbulence would be no bad thing and would increase Gordon’s popularity as people respnded to his sober and sensible economic competence. You simply can’t turn around now and blame world market conditions.

Actually, I think that the British voters have been rather kinder to the PM than might have been expected. Look at the prices in the shops and wonder at the remarkable restraint shown so far by trades unions, public sector workers, ordinary families. If this were Italy, the Mammas would be out there banging their pots and pans and threatening insurrection. If this were France, the truckers and farmers would be turning London into grid lock and dumping manure on the steps of Number Ten. The British are very good at adversity - we’ve had a lot of practice - and at this moment we seem to be on our best behaviour.

We express our discontent through the letters columns, blogs and at by-elections, which is why Henley is so important. It has made the Tories credible again. David Cameron has managed to make the Conservatives look not only electable, but almost liberal compared to Labour. People are turning against Labour’s surveillance society - against the intrusive snooping by local authorities, the neurotic vetting of potenital paedophiles; the “equality” legislation which institutionalises discriminaton.

There should be a leadership challenge, but there won’t be. Labour has lost the will to power; it is exhausted, confused, demoralised and financiall and ideologically bankrupt. It is no longer a question of if the Tories will win, but how long Labour will be in opposition.

1970s economic crisis It wasn't so bad. I was there

The Winter of Discontent in 1979, when “the rubbish went uncollected in the streets and the dead lay unburied in the graveyards” , was the climax to a pretty dismal decade. But it was nothing like as bad as what was to come. The 1980s has had a better press but only because history is written by the victors. For ordinary working people the Thatcherite 80s were a social and economic catastrophe, with three recessions, three million unemployed, the destruction of Britain as a manufacturing country and the end of social and economic security. Plus some truly dreadful haircuts.

The 1970s may have been defined by industrial confrontation, economic decline and the IMF riding to the rescue of the pound, but at least there was still a commitment to full employment and a degree of social equity. The music was a lot better too. Punk was a product of the 1970s, a nihilistic revolt by of the sons and daughters of the industrial working class, who realised that their ordered world was coming to an end. “No future”, snarled the Sex Pistols in 1977, as if in anticipation of Thatcherite Nemesis.

In 1977 I was at Edinburgh University, which was scarcely a hotbed of student radicalism, but had its moments. Gordon Brown had been student rector, and his Red Paper on Scotland had been published in 1975, calling for nationalisation of the means of production and workers control of industry. It was considered relatively moderate by the tenor of the times. The Communist Mick McGahey was the leader of the Scottish miners, who were still a huge industrial force. They were a moral and political force as well, even though the number of mines had fallen by a third in five years.

I still cringe when I recall going to Seafield colliery to sell copis “Workers Press”, with hair down my back and a tie die tee shirt. The miners were remarkably tolerant of these middle class dilettantes with their patronising ultra-leftism, and invited us up for tea and biscuits while they showed us their communist party cards and tried to talk sense about working through the Labour Party to deliver socialism. They all looked as if they were wearing eyeliner because the showers never quite washed away the coal dust.

Revolutionary romanticism was rampant among the students in the 1970. An easy indulgence in the days of generous student grants and long vacations where you could actually claim unemployment benefits. There was plenty to talk about in the ubiquitous Marxism study groups: we had had the three day week, the miners strike, the collapse of the Tory government in 1974, when Edward Heath went to the country on the platform of “Who Runs Britain: the Government or the Miners”...and lost. The SNP returned 11 seats in the general election that year, and caused a further shock wave through the UK establishment. Tom Nairn completed the first draft of “The Break up of Britain” in 1977.

Clearly, there was a decade-long confrontation of class and ideology in the 1970s. But for all the industrial confrontations, the endless strikes at Ford, the Grunwick occupation, Red Robbo at BL, Britain was never likely to join the Warsaw Pact. Teenage trotskyites talked of arming the workers and building the dictatorship of the proletariat, had no more future than the punks. The real revolutionaries turned out to be the Thatcherite Conservatives who seized the state after the 1979 general election and used it ruthlessly to privatise industry, destroy the miners, wreck the unions, end social housing and job security and promote social inequality by scrapping taxes on the rich. Not a shot was fired, but it was the end of an entire industrial way of life.

Was it all inevitable? Well, not the Winter of Discontent itself which would probably never have happened had the Labour Prime Minister, James Callaghan, not inexplicably called off the October 1978 general election. He would probably have won, in which case the rolling, national public sector strikes might never have happened. History isn’t written in advance, and while Labour had clearly run out of steam by the end of the 70s, the game wasn’t over. A coalition with the Liberals could have held Thatcherism at bay long enough to stabilise the economy. Britain might have turned out more like France or Germany - part of the European ‘welfare model’. Instead we turned into an industrial wasteland.

Could history repeat itself? Clearly, Labour is heading for defeat and Gordon Brown has, like Callaghan, bottled an election he would probably have won. But class confrontation is no longer possible in Britain, because the classes don’t exist any more. There are no industrial armies because there is no industry - only a superrich of city based plutocrats, a broad and diffuse middle class and an underclass living on the margins of existence. Of the three, only the rich are politically organised.

However, in the forthcoming Summer of Discontent, we may find that small groups of highly paid workers, like the Shell tanker drivers and the Grangemouth refinery workers, start to undermine the calls for pay restraint. Public sector workers may start to develop new forms of quasi-industrial action. In our complex inter-connected economy, there are any number of pinch points in information technology, transport and financial services where determined groups of salaried employees could cause a lot of trouble very fast. The middle classes are going to find that their earnings are about to be slashed just as their housing assets collapse in value. This could amount to an unprecedented collapse in middle class wealth. No one really knows how they will react. We may see a new form of anti-state militancy led by the very middle class intellectuals who used to dream of revolution in their youth.

History, to quote Mark Twain, doesn’t repeat itself, but it does have a habit of rhyming. There are similarities with the 1970s which are too striking to ignore, rocketing prices being the most obvious. The great inflation of the 1970s was blamed on militant workers, but they were really only defending their living standards after the event. The real cause inflation then, as now, was the quadrupling of oil prices and the decline of the value of the dollar. Western governments printed money and debased their own currencies - then they blamed the workers for their own mistakes. Some things never change.

There are signs that the politicians and bankers intend to reuse the same script: The Chancellor, Alistair Darling, gives pious warnings about inflation busting pay claims. The governor of the Bank of England, Mervyn King threatens to raise interest rates if people do not accept below inflation pay settlements. But as in the 1970s, no one has yet explained exactly why a dramatic lowering of spending power is going to benefit an economy which depends on consumer spending in the shops. The moral and economic case has not been made.

The deal is supposed to be that prices will come down later in the year - but with oil at $140 a barrel and global food prices out of control, the central bankers and chancellors know perfectly well that this is most unlikely. The stark choice facing working people today as in the 1970s is whether to acquiese or try to defend their living standards. We don’t know what will happen if the financial crisis isn’t resolved soon. But one thing is certain: there will be plenty of dicontent whatever the season.

Alistair Darling calls for wage restraing. But why should people accept lower wages?

Bankers and Chancellors are very good at telling other people to tighten their belts. All week we’ve been receiving pious lectures about how Britain must never return to the dark days of 1970s when wage claims drove up prices in a ruinous inflationary spiral. The Governor of the Bank of England, Mervyn King, and Alistair Darling effectively told the country that it will have to take a further pay cut this year.

All well and good. None of us want to return to the days of hyper inflation. But hang on a minute; just look at the numbers: food prices are up 8% over the past year; domestic energy bills are up 10% ; petrol is up 20%; and mortgage repayments, for the million or so coming off those two year fixed rate mortgages, will be up 25%. I’m afraid returning to the era of hyper-inflation isn’t just a hypothetical question - for many of us it’s already here.

The Guv’nor insists that prices will fall later in the year, and that people should be patient and wait. But I don’t find this very convincing. The BBC reported last week that the energy companies are planning another 40% increase in fuel bills this autumn. Most of the cost of the recent doubling of oil prices hasn’t begun to filter through into prices, and oil affects the price of almost everything.

The value of the pound has collapsed by 14% this year increasing the cost of imports and prices in the shops. Finally, look across the globe, and you see where the real engines of inflation are today: countries like India, China where inflation is out of control and the governments are revaluing their currencies upwards. Since China and India manufacture most of what we buy, it’s clear that price rises are far from over. So, despite average wages and salaries declining in in Britain in real terms, inflation is gaining momentum. The assumption that price increases simply follow wage pressure is not justified.

In these circumstances, is it realistic - is it morally acceptable - to say that people should not seek to defend the living standards of their families? It is easy to talk about wage restraint when you are earning nearly £300,000 like Mervyn King; less so when you are a public sector worker earning £15,000 a year. Curiously, neither the governor in his Mansion House speech, nor the Chancellor, Alistair Darling, called for pay restraint in the City of London. This year - of all years - financiers paid themselves a record £13.8 billion in bonuses after having almost destroyed the financial system with their irresponsibility. The banks have effectively been loaned nearly £100bn of taxpayers money since Northern Rock collapsed.

Now, of course, we don’t want to lapse the politics of envy. But consider this: in our plutocratic, smash-and-grab economy it may actually be more difficult to ensure industrial compliance than in the days of 1970s corporatism. Why shouldn’t people use their bargaining power to get a better deal? Perhaps if they had some idea that naked profiteering by the utility companies, banks and hedge fund speculators was being tackled, then they might be prepared to accept a bit of hair shirt. But I have yet to hear a word of criticism from Gordon Brown about energy cartels or rampant speculation in food and oil.

I know this sounds strange, but back in the militant 1970s, workers did feel a sense of social responsibility. There were things like prices and incomes policies; taxation of the rich; council housing. Shirley, now Baroness Williams was Prices Minister - an outlandish concept today, when prices are left entirely to the market. Most workers understood that there was a trade-off in society - the “social contract” as James Callaghan called it in 1978 - which justified moderate pay demands. There was a sense of fair play, even if it broke down in the Winter of Discontent in 1979.

This time round, neither the government nor the Bank of England has made any attempt to argue a moral case for wage restraint. It has simply asserted that ordinary people must get poorer to ensure stability. Yet even by government’s own economic logic, this is not self-evident. When Gordon Brown announced the £2.7bn tax cut recently - equivalent to 2p on the basic rate - he said that this would provide a “much needed fiscal stimulus”. In other words it would give people more money to spend in the shops. But won’t falling earnings do the reverse?

If millions of workers are effectively going to lose purchasing power by below inflation wage settlements, surely that means demand will fall and the economy will lapse more rapidly into recession. Everyone agrees that consumer spending has been buoyed in recent years by house price inflation, but now that house prices are falling, how are British consumers going to be able to keep the economy going? This is a paradox that Mansion House man refuses to address.

This is parlty because Mansion House Man feels he doesn't have to address it; that the trades unions are in no fit state to organise industrial actions on a wide scale. Only last December, the Bank of England’s labour market expert, Professor David Blanchflower, trumpeted that there was no need to worry about wage pressures because bargaining power had been eroded. “Workers are fearful about the security of their jobs”, he said in the Guardian, “in part because of the fear that they could be replaced by employees from Eastern Europe, or their firm could relocate abroad”

Well, I’m not so sure about that. Polish workers are returning home fast as their real wages fall and the economy falters. We saw in the Grangemouth oil refinery dispute in April and in the Shell tanker drivers walk out this month that workers can relearn the techniques of militancy pretty fast. People will have watched and learned as the Shell drivers won a 14% pay rise over two years.

In the age of the mobile phone and the internet, industrial action may take on new and unexpected forms. Remember the fuel protests in 2000 which erupted from nowhere without the help of Red Robbos or Socialist Workers. We live in a highly complex society with a number of pinch points, in energy, transport, information technology, financial services and the public sector which groups of workers may well seek to exploit to maintain living standards. There could be some quite ugly disputes as relatively small groups use their muscle to get their snouts in the trough, and they're not going to listen to lectures from bankers about restraint. So, get ready for some action on the industrial front A summer of discontent in the public services may only be the start of it.

Brown's year in office

Spare a thought for Gordon Brown. His world has been turned upside down. Only a year ago, he was congratulating himself for the longest period of economic growth in British history. ”In this, my eleventh Budget” he boomed, “my report to the country is one of rising employment and rising investment; continuing low inflation and low interest and mortgage rates”

How times change. If he said that today, he would be laughed out of the Commons. Inflation is back, unemployment is rising, mortgage rates are rocketing, whole sectors of the economy, like construction, are collapsing and Britain is heading - almost certainly - for recession. The economy has turned bad with unprecedented rapidity and the new paradigms have been thrown out the window.

It wasn’t just Brown, of course - most economists were taken by surprise. No one forecast the August 2007 credit crisis, a systemic dislocation in the financial system which, as we learned last week from Bradford and Bingley, is far from over. We haven’t had a full blown banking crisis in Britain for thirty years and financiers like George Soros believe we are on the brink of a world depression. We’ve had an oil shock on top of an inflation crisis on top of a financial breakdown. Anyone who believes that this is an cyclical blip is not paying attention.

Yet last only last year, there was a widespread belief that the world was entering a golden age of low inflation, economic expansion and rising prosperity. People expected set backs, but nothing on this scale. Before Black August, the tills in the high street were bulging as Britain shopped till it dropped. Voters thought their houses were making them rich as New Labour’s easy money policies seemed to promise unbroken prosperity for doing nothing at all. The City of London was the financial centre of the world, a global hub of the new age of structured finance and credit expansion. People talked of the “Goldilocks economy” - not to hot, not to cold, just right.

Well, now the porridge is on the floor and Goldilocks is about to have her house repossessed. Last week the Paris-based Organisation for Economic Co-operation and Development effectively accused Brown of fiscal irresponsibility. His “excessively loose fiscal policy” it said left no room to cut taxes and prevent a steep decline. The OECD report was the latest in a blizzard of bad news for Brown. Bradford and Bingley, on of Britain’s biggest mortgage banks, nearly went the way of Northern Rock and had to be saved by a desperate cash injection from an American private equity company.

Halifax confirmed that UK house prices fell at 2.4% in May the steepest fall on record and mortage approval are down by nearly half. British housing market is around a year behind the US one and is going in the same way: down. Our sub-prime crisis lies in buy-to-let and self-certification mortgages and will prove just as toxic and damaging to banking balance sheets. And don’t expect the Bank of England to ride to the rescue: last week it made clear that there will be no slashing of interest rates to stop to collapse. Indeed, following hints form the European Central Bank, the smart money is now on interest rates rising in future.

This is the doomsday scenario which Brown thought could never happen - interest rates going up while house prices go down. The reason the Bank can’t cut interest rates is because inflation is back with vengeance. Annual food price inflation is running at 7% and fuel 9%
The pound is down 12% on the year raising fears of a run on sterling - something we haven’t seen for four decades. But with Britain’s balance of payments in the red, asset prices falling and the government in debt on the eve of a slowdown there isn't a lot of reasons for foreigners to put money in the British economy right now.

Britain PLC is looking a bit like one of the dodgy mortgage banks: pumped up with easy credit and ready to implode. The British consumer is the most indebted in the world, with a staggering £1.4 trillion in loans. Unemployment is set to rise. The financial sector looks like a basket case with Aviva announcing 1800 job losses.

Now the political question, amid the wreckage, is could it have been avoided? The answer is yes and no. You can’t blame Brown for the global credit crunch which began in Wall St. or for the quadrupling of oil prices. Nor can he be held to blame for the general breakdown in financial responsibility in society. However, he does carry the responsibility for not anticipating some form of economic downturn and stabilising the national finances to withstand it.

Brown used public spending to great effect after the 2000 stock market crash, when investment in the NHS and schools prevented Britain falling into recession. But overconfidence in his own economic infallibility led him to throw caution to the winds in the mid noughties. He didn’t need to put anything by for a rainy day.

Now the rain is pouring through Number Ten and Brown’s reputation for economic competence is being washed away. With hindsight his biggest mistake was not to understand the folly of the house price boom. But he wasn’t alone. The Bank of England kept interest rates far too low for far too long and allowed the genie of inflation to get out of the bottle again. Putting it back again won’t be pleasant.

Europe could disintegrate after Lisbon

The trouble with Europe is that it just keeps going on and on. Countries vote against treaties, like Ireland last week, but it rarely seems to make any difference in the stuffy corridors of Brussels. Which, of course, is one important reason that the Irish voted against the Lisbon Treaty.

Another was the ?Bertie? factor ? the recent resignation of the pro-Lisbon Taoiseach after a financial scandal. Final nail in the coffin was the housing crash, which has caused panic in a country where people had come to see ever rising property prices as a kind of natural right. Voting down Lisbon is hardly going to do anything about that, but it was a way of giving the politicians a kicking nevertheless.

This is the trouble with referendums. People don?t always vote on the issue before them. As the financial crisis deepens, and people see their standard of living fall as inflation rises, they look for an opportunity to register their discontent. Which doesn?t mean the vote is invalid, or that it can easily be dismissed by the eurocrats. The Irish NO has been a devastating blow to the ambitions of Brussels to create a more coherent and, yes, centralised European Union. Not a superstate, but a union which is able to speak with a common voice. Clearly there is no common voice.

It probably wasn?t an anti-European vote as such ? Ireland has done so well out of the EU that no serious politician there proposes actual withdrawal from the Union. The euro has been a great success. But Europe certainly arouses deep suspicion. There was a fear that under the new treaty, which entrenches majority voting on the council of ministers, Ireland might lose some of its opt outs ? such as its right to cut corporation taxes to improve competitiveness. Or its military neutrality ? some no voters apparently believe that the EU wants to conscript young Irish into a European defence force. These were not realistic fears, but there is no doubt that people feel that Brussels is too remote, and not sufficiently attuned to Irish sensibilities.

But is there any way that the EU can be sufficiently attuned to the national attitudes of 27 countries? This is the challenge to those, such as the UK Conservatives, who rejoice at Irish rejectionism. Kick the bureaucrats where it hurts, they say, frustrate the ambitions of the politicians; show that the people won?t be taken for granted. Well, and good. But what is the alternative now for Ireland and for Europe? We are entering a very different economic and political climate to that in which the EU was born and evolved into the dynamic economic zone we see now.

The 60 year post war boom is now coming to an end. Look how inflation is returning with a vengeance, particularly in the recent accession states in the East, like Latvia, Estonia. See how Spain is being crushed by the collapse of its construction boom. The party is over, and countries like Germany, which have not indulged in irresponsible personal and governmental indebtedness will be expected to bail out countries like, well Britain, which have spent like there is no tomorrow.

The Mediterranean countries, like Spain and Italy are looking to a relaxation of the Maastricht rules on public spending so that they can head off a recession. The European Central Bank is not happy with this and is threatening to put up interest rates. The Eastern countries suspect that the West just wants their cheap labour. We face a Eurovision-style fragmentation of Europe, with a sun-belt block, an Eastern European block, a Franco-German axis, and an increasingly isolated UK. This is not a recipe for economic cohesion. There is a very real possibility that Europe could begin to unravel if the economic instability continues. Our cosy assumption that, whatever happens, the EU will just go on and on may be about to suffer a realty check.

Holyrood MSPs made homeless

Gloom descended on Holyrood last week as MSPs realised the significance of the new rules on expenses. No longer would they be allowed to buy second homes at public expense using their £11,000 a year accommodation allowances ? a practice that has allowed many to make a fortune in the Edinburgh property market. . MSPs will now be reduced to owning only one home - mere doorstep away from homelessness.

Concerned individuals in the Garden Lobby were considering some sort of charitable trust to help MSPs through this difficult period. Property Relief, or Make Property History, or perhaps a concert organised by Bob Geldoff. It is a desperate thought that so many of our political classes, through no fault of their own, will have to use boarding houses, hotels or even rented flats.

Mind you, following the example set by MPs in Westminster, Holyrood members may be looking at imaginative schemes for continuing the gravy train just a little longer. Perhaps buying properties with their own money and then renting them back to themselves. The Speaker, Michael Martin, used to rent back his Glasgow home as his constituency office even though it wasn?t actually in his constituency.

MSPs received a sweetener in the form of an increase in their expenses from £46,000 to £52,000, on top of their £54,000 salaries. Now, I can?t be alone in thinking that it is just a little odd to put a figure on the expenses BEFORE MSPs have actually claimed them. Are they perhaps hoping that, as in Westminster, they will be given the cash as a lump sum to spend without having to supply proper expense accounts and receipts?

No way. In a transparent legislature like Holryood, the facts will out, one way or another. MSPs know they are better being up front rather than on the front page after Paul Hutcheon has been through their finances.

MSPs do feel sore about all this. They say, with cause, that they are not corrupt and that all this attention on their expenses is bad for democracy. However, the reality is that everyone is subject to audit nowadays ? even journalists. When I started in the sordid trade, expenses were regarded by many hacks as part of their salary. Not any more. Journalists don?t want to give their editors any easy excuses for firing them.

It?s the same everywhere in credit crunch Britain. As for MSPs? property portfolios - well, what better time to be selling up, just when the property market is about to crash. They can cash in now and lock their capital gains in the bank. After all, renting isn?t so bad, especially if you don?t have to pay.

David Davies may surprise us all

Magna Carta, the Glorious Revolution, Haltemprice and Howden - doesn?t have quite the same ring somehow. The former Tory home affairs spokesman, David Davies, has been ridiculed for resigning his seat in his outrage at the erosion of civil liberties in Britain. He is being cast as a self-indulgent ego maniac, engaging in a meaningless stunt which will undermine his own party. Commentators on right and left have questioned his sanity, condemned his judgement and suspected his motives. About the only thing that hasn?t been said about David Davies is that perhaps he might actually be doing the right thing..

Resignation on principle is a noble tradition of British politics though, granted, it is usually from a position of power that politicians resign ? like Robin Cook over Iraq - rather than from a position of no power at all. But the personal cost could be just as great. Davies has almost certainly ended his front bench career, and the possibility of becoming home secretary in the next Tory government. Sacrificing his career in this way is a little like those Buddhist monks in Vietnam who set fire to themselves to express their opposition to the war. It?s lunacy, but inspired lunacy.

Westminster village people find this utterly mystifying in an age in which every action is assumed to have a personal advancement at its heart. But the British public may respect a politician who ? for once ? actually believes what he says and has the courage of his convictions. . This has clearly not been done out of vanity or political calculation because a moment?s consideration shows that it will damage David Davies more than anyone.


Labour has decided not to stand against him which does rather betray their own lack of conviction in their counter-terrorism policies. Gordon Brown seems content to be represented by the former Sun editor, Kelvin McKenzie, of the ?Red Mist Party?. Backed by Rupert Murdoch money, he is standing on a ?42 days isn?t enough? platform. It is an elegant commentary on the state of Labour that Brown has handed his moral compass to the most rabid tabloid populist in Fleet St..

No one I know in the Labour party supports 42 day detention without trial. The government didn?t so much lose the argument as hardly bother to make it. The logic seemed to be that 69% of the public believe detention without trial is a good thing and therefore it must be right. Gordon Brown, unlike Tony Blair, has not fronted the debate, going out and about meeting his critics. He has hidden away in his bunker as usual, doing dodgy deals with Paisleyite DUP MPs, and bribing everyone he could reach on his own benches. This has shown the worst side of Brown?s political personality, and confirmed that Labour MPs cannot be relied upon to stand up to the authoritarian state. .

Davies is right to say that the government?s plans for detention without trial, identity.cards and surveillance together represent the greatest assault on the liberties of the individual in Britain for three centuries. Locking people up for six weeks without charge will undermine justice and play into the hands of the terrorists. Freedom from arbitrary arrest is one of our greatest freedoms and does stem from Magna Carta. 42 day detention will further antagonise the Muslim communities in Britain ? for let?s face it, they are the ones who will be banged up under this law, losing their jobs, their houses in the process.


But it?s not over. Legal authorities condemn the move, the Lords will throw it out and judges may challenge it in the courts. Davies resignation will add moral force to the extra-parliamentary rearguard action against the erosion of liberty.


And as it happens, it may not be so daft politically. A principled action like this on grounds of conscience, is exactly what the Cameron Conservatives need to give them some moral authority, broaden their appeal, and efface the memories of the past. Rather like the independent MP Martin Bell, the man in the white suit who stood against the Hamiltons in 1997, Davies represents a beacon of principle in an age of compromise and calculation. Yes, like Bell, he may be vain and slightly ridiculous ? but that doesn?t mean he can easily be dismissed. Bell was a huge asset to Labour in its war against Tory sleaze and helped lay the ground for the 1997 Labour victory.

To become the government in 2010, the Tories have to demonstrate that they are not the nasty authoritarian party of old, but a new political entity with a moral claim to national leadership. This means, like New Labour, that they have to appeal to people outside the narrow conservative community. Having the likes Shirley Williams, the liberal democrat peer, and Shami Chakrabati of Liberty hailing Davies as a champion of human rights is actually a very big plus for the Conservative Party. There is a certain irony in this since Davies is a right winger who supports the death penalty and hates Europe, but you don?t have to agree with everything he stands for to agree with him on 42 day detention. That would just be tribalism.

I can?t see a lot of downside here for David Cameron here. If Davies crashes and burns, all Cameron will lose is a former leadership rival who has always been a bit of a wild card. If Davies manages to turn this by-election into a genuine campaign against the oppressive state and a reaffirmation of the foundations of liberty, then the Conservatives as a whole will benefit. They will be seen as more than just a public relations exercise.

So Labour glee may be premature. They seem to think that the voters are stupid people whose fears can be manipulated to the electoral advantage of the government. But they are not fools, and liberty is in the British cultural DNA. People can see the security cameras going up everywhere - we have more of them than any country in the world, even China. They can see that identity cards won?t work and remember that even Churchill opposed them. . The voters may be wary of terrorists, but they can understand how they would feel if they were locked up without charge.

Davies is reawakening a powerful tradition of libertarian individualism that goes back to William Cobbett and beyond. He may be a bit daft, but sometimes but it takes fool to see the Emperor?s lack of clothes.

Lets all speak Gaelic. It's the only language BBC Scotland understands.

Last week, the King Report, for the BBC Trust put a bomb under BBC Scotland. Though I?m not sure they have noticed it yet. The report identified the corporation?s complete failure to reflect the new constitutional reality in the UK. But the task of crafting a service that is adequate to the new Scotland has hardly been started, and I?m not sure BBC Scotland in its present demoralised state is capable of undertaking it.

Like most people I have an ambivalent relationship to BBC Scotland, though not half as ambivalent as its relationship to me. I have committed the ultimate sin of criticising the corporation publicly for which I risk being banished from its portals. The Gaelic people are after me for supposedly dissing ?Eorpa? as a misallocation of resources.

For the record, I think precisely the reverse: Eorpa is a model of what BBC Scotland should be trying to do. It is the only Scottish-produced programme with the wit and the resources to film abroad on a regular basis and look Europe in the eye. It is no accident that Eorpa has been praised at just about every public meeting of the Scottish Broadcasting Commission as an example of what BBC Scotland should be doing. It makes much of the rest of BBC Scotland?s output look parochial and cheap.

Gaelic broadcasters seem to lack the inhibitions of their English language counterparts. While the rest of BBC Scotland is mired in apathy and despair over endless financial cuts, the Gaelic crowd is full of confidence. The big broadcasting event of the year in Scotland is the launch this summer of a Gaelic television channel for which BBC Scotland is training legions of young Gaelic broadcasters. This is great for the language, but I can?t help feeling there is a bit of a cultural deficit opening up with those of us unfortunate enough not to speak it. The proposal to perhaps put some English language programmes on the Gaelic TV channel doesn?t quite fill it.

Now, can I say again - because feelings are very raw here - that I am not posing this as a Gaelic v. English-language issue. The problem is the weakness of the mainstream service rather than the influence of the Gaelic lobby. All power to them. Gaelic has flourished because it has essentially been devolved and is governed by the Gaelic Media Service which has its own independent funding and a remit to promote the language. In the wake of the King Report, which confirmed what we all knew, namely that Scotland is not being served by the BBC, BBC Scotland?s constitutional status also needs to be addressed.

It was always a bizarre anomaly that broadcasting should have been reserved to Westminster under the Scotland Act. There is no rationale behind it, except a vague fear on behalf of some Labour ministers that devolution of broadcasting would turn BBC Scotland into a vehicle for nationalism. Westminster has responsibility for broadcasting, but that doesn?t mean that the Labour government can tell the BBC what do put in its programmes. Devolution would not improve broadcasting standards overnight, but it would make clear to the BBC that Scotland cannot be regarded as a province any longer, with a second rate provincial service.

People in Pacific Quay take profound offence if you suggest that what is produced for Scottish consumption is second rate. But it is; it is meant to be. I have enormous respect for the people working in BBC Scotland, many of whom are extremely good at their jobs. It makes me very angry when sniffy Sunday commentators say there isn?t enough talent in Scotland to provide a proper national service. I can say with absolute conviction, having worked in both BBC Scotland and in BBC in London, that there is only one thing broadcasters in Scotland lack: the resources to do the job. There?s no shortage of talented Scottish broadcasters and producers at the highest levels in the UK media.

It is the subordinate status of BBC Scotland within the BBC that leads to mediocrity, not the quality of the people who work in it. The programme budgets are derisory and getting tighter by the year as the BBC inflicts ever shrinking budgets on demoralised programme makers. People leave because they get exhausted. Yet, the London-centred BBC bosses seem completely unaware of what is going on here, as the deputy director general, Mark Byford, confirmed at a Scottish Broadcasting Commission panel in Glasgow last month. He insisted that there was no difference between the quality of news and current affairs programmes in Scotland and on BBC network, and that programmes here received the same funding. An absurd proposition to anyone who has actually worked in the corporation north and south. Why doesn?t someone tell him?

The main problem identified by Professor King in his report for the BBC Trust was the complete failure of the BBC to represent in its programming the reality of devolution. Research conducted by Cardiff University showed that, over a two month period, of 163 items on health and education carried by the BBC?s network news programmes 163 were about English health and English education. Usually, there were references to Scotland being different, but no attempt to cover Scottish stories about them.

The BBC?s preferred solution is to encourage network editors to shoe-horn items about Scottish health and Scottish education into the UK network bulletins. We will no doubt see the odd item on the Six O?clock news about Scottish class sizes and the poor health of Scots ? but I can guarantee you that they will not address the real problem, which is the stunning failure of BBC Scotland to represent Scotland properly to its own viewers in Scotland at this crucial time in our national history. There is no way that network news bulletins are going to give equal prominence to devolved stories. Why should they? The vast majority of their viewers are in England.

The point is that Scotland is not a region of England, but a country with its own government and a parliament with primary legislative powers. It has a separate legal and education system. The challenge is not just to explain this to English viewers, who aren?t really interested, but to ensure that Scottish programming transmitted in Scotland is of the same standards and resourcing as English network programming. BBC Scotland has to learn from the Gaels that no one is going to do this for you. Pacific Quay needs to find its voice and demand that nation speaks equally to nation.

Bring back Tony

I’m sorry, but there is just no alternative. Following Tony Blair’s triumphant return to the Commons last week, he is just going to have to become prime minister again. He’s the man we all loved to hate.

I know, I know, he is a totally discredited celebrity politician responsible for an illegal war who debased Labour’s beliefs and sold the party to plutocrats. But he looks the part. That smile. The self-deprecating shrugs. The hair.

Admit it: you want him back. Politics needs villains more than it needs heroes. We need someone who is worth complaining about, Gordon just doesn’t do it for us. He looks miserable and worn out. It’s very hard to attack a social inadequate who seems to evoke pity as much as much as hatred. Gordon’s awkwardness makes people cringe.

Tony is the perfect politician precisely because of his persuasiveness, the effortless command of the media. You know where you were with Tony B. Liar Watching him on TV answering questions about his multiple homes, Cherie’s “lost contraceptives” memoirs and, er, how to bring peace to Palestine, we were transported back to the golden days of Westminster, when politics was fun, house prices were rising and cash was for honours.

Now it is just the dull grind of Gordon’s incomprehensible pronouncements at Question Time. His leaden rhetoric and pusillanimous u-turns. Even the economy has turned boring. Brown is a back-room person who has been thrust into a limelight that has blinded him. His moral compass points only one way: right.

It’s not as if Labour has any leaders-in-waiting. Even the bookies favourite to replace Brown, David Milliband, is largely unknown and untried. Blair is young enough to come back. Winston Churchill made a career out of returning from retirement. Alex Salmond showed that a period in the wilderness can work wonders. He stood down in 2001 after being bored rigid by Holyrood and irritated by the petty-mindedness of a party who just thought he was too big for his boots.

Well, they soon learned, and after a couple of years were begging for him to come back. Initially Salmond ruled it out, saying: “If nominated I’ll decline; if drafted, I’ll defer; and if elected, I’ll resign.” But he changed his mind and led the SNP to its first ever election victory. Just imagine Tony Blair returning in triumph to lead the Labour party back to power in 2014.

There’s only one problem. Tony Blair is making far too much money to even think of trying to live on a measly prime minister’s salary. Puhleese. The only way it could work is if the BBC took him on a multi-million contract like Johnathan Ross. Well, perhaps it could come to that.

World Exclusive: what Hillary said to Barack at their secret metting

World Exclusive: what Hillary said to Barack in that Washington meeting last week...as told to Iain Macwhirter.

Hello, Hillary, please sit down.

Hi Barry, how’s it going.

Please, Hillary, my name’s Barack, I’ve not been Barry since college.

Sure it is...but hey let’s not fall out over a question of identity.

Look, the primaries., I wish I could say that it has been fun, but I can’t. I think you and your husband went too far casting me as a limousine liberal with no experience. Bill really antagonised the black vote with his patronising remarks as if I was some kind of bellhop in an Alabama hotel.

Heck Barack, don’t be so sensitive. We did you a favour by getting out the negatives before McCain got to work on you. It’s a rough old world out there. I had to take it too - for being a woman. All those posters saying Hillary - Iron my Shirt. The misogynistic attacks on me for that business about Bosnia..

Hillary, that wasn’t about sexism, it was because you lied about being under sniper fire on your visit there.

The hell it was. They just wanted to portray me as the little woman who runs for cover and can’t stand up to the bullets like a man. All down the line your people have been saying that I’m just Bill’s other half, and that I’m part of a dynasty as if I don’t have any kind of identity of my own. Well, as I said, I’m prepared to stand toe to toe to do what ti takes to take the blows and do it my way...

Okay. Let’s let the past be the past. Look to the future. Trouble is Hillary I find it very difficult to see you standing next to me at my inauguration, when so much has passed between us. When you have said that I’m not fit to take the 3.00am call about a national emergency; that I would endanger American security; that I appeal to a narrow section of society and that I associate with black power advocates. ...

.. ~I never said that..

....Sure, but you made you feelings clear over the pastor Wright affair and about my criticisms of small town America’s enthusiasm for guns and fundamentalism...

...All I said was that you have a choice in who your pastor is, and I wouldn’t have chosen someone who hates our country so much that calls on God to damn America; who is a racist and..

...Jeremiah Wright is not a racist..

...Oh yes he is; he’s a black racist who condemns white America, blames them for the ghettos, when that’s not right. And you had him as your pastor for twenty years.

...Okay, as I said let’s let the past go, and try to look to the future. The trouble is that if I take you on, Hillary, I destroy my strongest suit, which is change. How can I preach change if I have at my side one of the Clinton dynasty, and have Bill looking over my shoulder all the time, second guessing everything I do.

There you go again. When are you going to see that I am not Bill Clinton’s little woman, I am Hillary Rhodham Clinton and I don’t even live under the same roof as that man if I can help it. I am the first woman ever to be taken seriously as a presidential candidate. I am change personified.

I take your point. You do have a strong base in the country, but that is precisely my problem. If I take you on as Veep I’m going to get this little speech from you every week, am I not? Let’s face it Hillary - you don’t accept that you lost the primary race. You took long enough to concede defeat.

I won a moral victory. If it hadn’t been for sexism and misogyny, and a fear of being accused of being anti-black, the super-delegates who trooped into your camp would’ve thought twice. Thought about whether you can really win the presidency when my voters say they’d vote McCain. I nearly won more popular votes than you did, and if Florida and Michigan hadn’t been fixed by your backroom bruisers I’d have won a majority of primary delegates.

Hillary, that is an unreasonable accusation, and you know it. I played exactly by the rules over Florida and I have not sought to pressurise anyone. But you are making my point. You don’t think you lost. You haven’t admitted it to yourself. By rights I shouldn’t have agreed to meet you until you had made absolutely clear that I was the winner and that you accepted the result.

Well, I’m here now. And if you want to play hardball, go right ahead. But let me warn you Barry, sorry Mr Obama, that I control the votes of white working class America as well as the votes of most of the soccer moms. and that if you keep trying to diminish me in the eyes of history then these people are going to notice. They hear what I say, and if I continue to say some unfortunate truths about your personality and politics, these people might well turn to John McCain.

Are you threatening me Hillary?

Nope. No way; I’m not falling for that one. I say what I say and mean what ~I mean and what you’ve got to think about is how the other half of America is going to vote in November. You need me for that and you know it.

Okay, Hillary. What are your terms. If I make you vice presidential running mate, will you campaign tirelessly for me? Retract your accusations about my inexperience, dismiss the attack dogs and put Bill out to grass on some golf course for the duration?

Who ever said I wanted to be vice president?

You mean, you don’t?

Hell no. It’s worth less than a bucket of cold spit. I’m no second fiddle. Been there done that, got the tee shirt.I can be more powerful as the first female majority leader of the Senate.

What are we talking about then.

I want you to offer me it so that I can turn it down.

Okay. I’ll think about it.

Don't call us Gordon

“Brring, brring. Hello, my name’s Gordon and I’d like to tell you about an exciting new way to make money. Let me take a moment of your time to make you better off. Yes, I can put real money in your pocket by my amazing new £2.7 billion pound fiscal stimulus. Are you a basic rate tax payer? Then you could be in line to make some hard cash, just give me your tax code. Do you drive a car? Well, coming soon will be my special car tax giveaway, guaranteed to put a smile back on the face of any petrol head. Perhaps you are with one of Britain’s banks? Well, in that case, billions of pounds are waiting for you to collect in my special liquidity scheme. But remember; this deal isn’t available in the shops. I’m Gordon, and thanks for your time...”

The idea of the prime minister sitting in his bunker cold-calling members of the public is clearly the image of the week. I’m not sure which is more astonishing: the fact that the prime minister apparently has time to call up to two dozen members of the public every week, some reportedly at 6.00am, or that his public relations people thought that this was a good idea to tell us about it. It was the brainchild of Brown’s new strategy and communications chief, Stephen Carter and was intended to “humanise” the prime minister.

But they missed the point about unsolicited calls, and the public’s suspicion of them. Telephone land lines are now largely the preserve of nuisance callers, telephone sales teams and political parties at election times. People increasingly use their mobiles for personal calls that matter to them. The phone is becoming slightly alien and thought of the prime minister phoning you out of the blue is simply weird.

What do you say? “Hello, prime minister, I’m so really glad you called. I was wondering whether you could explain to me why you appear to have lost the plot recently? And by the way, how can you let City bankers pay themselves £13 billion in bonuses when you’re giving them £50 billion of our money to cover their credit crunch losses ? And while we’re at it, did you really agree with Wendy Alexander over holding a referendum on independence?”

Had Brown not been so unpopular right now, with lower poll ratings this week than Michael Foot in 1983, this story might have worked. Like President Bartlett in West Wing, so moved by his correspondence that he makes a personal call to its author. However the cold-calling has come over like another of the PM's “psychological flaws”. Don’t call us, Gordon, we’ll call you.

It's Scotland's Oil - no really.

“It’s Scotland’s Oil”, cried the SNP’s infamous slogan from the seventies and eighties. I can still recall a poster depicting a black-caped Margaret Thatcher as a vampire with Scottish oil dripping from her fangs. And to be frank, there were always people, even in the SNP, who thought that the concentration on that single resource was rather tasteless and economically illiterate.

The campaign didn’t chime with mainstream political opinion in Scotland, especially in the Labour Party and trade union movement. These were the days of working class solidarity across borders. Scotland and England were supposed to be working together for the good of all and the maintenance of the welfare state. The idea of snatching all the black stuff for Scotland alone seemed a little selfish. Maybe it was.

But of course Scottish oil was not used to benefit the working classes in the 80s, but to finance the destruction of organised labour and fund tax cuts for the wealthy. There is no doubt that the Thatcher governments depended on oil revenues to pay the cost of mass unemployment. Without the £250 billion that was pumped out between 1975 and 2005, the UK would have been an economic basket case.

This was confirmed two years ago in the secret Scottish Office memo from the economist Gavin McCrone, released under the Freedom of Information Act. “Britain is now counting so heavily on North Sea oil to redress its balance of payments,” he wrote in 1974, “that it is easy to imagine England in dire straits without it” McCrone concluded that oil could reverse the income gap her head between Scotland and England. “For the first time since the Act of Union was passed, it can now be credibly argued that Scotland’s economic advantage lies in its repeal”.

Of course, It may all seem like water - or oil - under the bridge now. Most of the oil has gone. Scotland got some of money back in the form of higher public spending - much of it ironically going on unemployment benefits. But the lack of any tangible legacy has left a bitter taste in Scottish mouths. Scotland is the only country in the world to have discovered oil and not benefited from it directly. The Norwegians prudently ploughed oil revenues into an oil fund which became part of a sovereign wealth fund now worth £350 billion. Norway now bails out Wall St banks.

And it’s not just independent countries that benefit from oil funds. The US state of Alaska has one and so does the province of Alberta in Canada. Even Shetland had direct access to oil wealth from Sullem Voe. Scotland alone remains the ragged trousered philanthropist of petroleum economies.

But times change. Suddenly, with oil at $130 a barrel, the remaining North Sea is valuable again. Scotland will contribute some £14bn in oil revenues in the coming year - £4 bn of that a result of the recent hike in oil prices. John Swinney has written to the Chancellor, Alistair Darling, calling for a proportion of this to be placed in an oil fund to provide security for Scotland in future. He has not had a reply.

The economics of independence are transformed. Only a year ago, Labour was saying confidently that Scotland would be bankrupt if it went alone, not least because oil production had nearly halved from the 1999 peak. However, there is still around 25bn barrels in the North Seat, worth around $2 trillion, and oil companies are exploring previously uneconomic fields. A report by the accountancy firm Grant Thornton last week claimed that an independent Scotland would have a budget surplus of £4.4bn, based on 82.5% of North Sea revenues.

Three decades of neoliberal economics under Tory and Labour governments have eroded any sense that Scotland is morally bound to regard her oil as a common resource. Faced with the unrestrained greed of the City of London, where the people responsible for the credit crisis have just paid themselves £13 billion - almost the equivalent of the entire revenues of North Sea oil- in annual bonuses, it is hard not to argue that Scotland should be getting its snout in the trough.

But a warning. What goes up can go down. While oil may never go back to the days of $25, because of rising demand in the East and the lack of major new discoveries, no one should believe that the current boom will continue. Much of it is the result of speculation, and a correction is more than likely in future. Nevertheless, it has handed the SNP government an extraordinary political windfall just at the moment when it was getting into difficulties over unmet manifesto promises. And it coincides with a growing feeling in Scotland that, this time round, we won’t be fooled again.

Obama is the America's last hope

Of course, they’re both really Scots, you know. Presidential candidates Barack Obama and John McCain, are supposedly both descended from the same Scottish King: William the Lion who ruled from 1165 to 1214, according to an American genealogist, Gary Boyd Roberts reported in the Daily Telegraph in January. Make of that what you will. Alex Salmond has both their numbers.

John McCain is intensely proud of his Caledonian ancestry, as he makes plain in his book “Faith of my Fathers”. His family left Scotland in the 18th Century, and he even claims to be descended from Robert the Bruce. Obama’s views on his alleged Scottishness - supposedly through Edward FitzRandolph who emigrated to America in the 17th century - are unknown.

Of course this genealogical trivia tells us precisely nothing about the politics of the US presidency. However, it does remind you that everyone is related to everyone else in America, and that a lot of them came from Scotland. It also underlines an essential truth about Barack Obama: that he is almost impossible to pin down by conventional ethnic stereotypes.

With a Kenyan father and a white American mother, Obama is neither african-american nor white-caucasian. He grew up partly in Indonesia, where he went to a Muslim school - his middle name is “Hussein” - before ending up in Hawaii, which is about as far as you can get from middle America and still be in the USA. When people say he is the first black presidential candidate, they could equally say that he is not actually black, and he’s not really American. Sixteen percent of Americans believe he is a Muslim,, and interviewers on Fox TV delight in mispronouncing his name as “Osama”. Yes, only one letter separates Barack Obama from the boss of al Qaeda.

I find this ethnic heterogeneity the most attractive feature of the Obama candidacy. He really is a modern American everyman - or as near to it as you can get. No, he doesn’t represent women, but Hillary does that. No, it doesn’t necessarily mean he will be a good president, or even that he will make a decisive break with the disastrous foreign policies which have turned half the world against America. However, he remains a potent metaphor for all that is best in the American constitution - the stuff about it being self-evident that all men are created equal.

Yup, I know that women are not quite as equal as men. And for the black American underclass it is equality of misery. But he has lived that contradiction. Barack Obama’s own life experience is his best recommendation. He made a conscious decision to align himself with the black American dispossessed as a community activist in Chicago. His wife, Michelle, knows about being part of an underclass. His election would represent atonement for America’s wars and for its capitulation to the politics of the super-rich. If America can’t come to its senses under Obama, it can’t do it at all.

Unlike the rest of the Democrat political establishment, Obama opposed the Iraq war from the outset. He has made clear his intention to be the first American leader in thirty years to sit down and talk with Middle East leaders, including the Iranians, “without precondition”. When he pulls American troops out of Iraq it will be difficult for Muslim extremists to claim that American is on a white-Christian fundamentalist crusade to destroy Islam.

Cynics will say: so what? America was in the region for oil not religion, and Obama has already started to fudge the timetable for troop withdrawal. He sacked a member of his team for talking to Hamas and he told the American Israeli Public Affairs Committee last week that Jerusalem must remain “the undivided capital of the Israeli state”, and that he will do “everything in my power” to stop Iran gaining a nuclear weapon. It remains the case that no serious American politician can afford to alienate the Jewish lobby. But we can’t write him off for that - at least not yet. His father was Muslim, so he understands Islam, and can talk across the clash of civilisations.

Anyway, think of the alternative. John McCain may claim to be an American Scot, but that is only to bolster his image as an aggressive conservative. His hero is Barry Goldwater, the Republican hard-liner from the 1960s who made a virtue of his willingness to nuke the Russians. McCain is not an identikit Republican - he takes the environment seriously, is liberal on issues like immigration and campaigned against the use of torture in Guantanamo Bay. But he is still a leading exponent of what has been called “American exceptionalism” - the concept that the only thing that matters in foreign policy is America’s direct interests, narrowly defined. It is a philosophy which stems from the neo-conservative “Project for the New American Century” and was the kind of thinking that got America into the Iraq war - which, of course, McCain supported.

Obama’s historic purpose is to reconnect to America’s other tradition - of exercising ‘soft’ power rather than ‘hard’ power. Soft power was the way the US defeated the Soviet Union not through military conquest but through cultural osmosis. It was as much American rock music and Levi consumerism that undermined the Warsaw Pact and brought down the communist bureaucracies. Soft power was the way America rebuilt post war Europe by Marshall Aid, rather than through the scorched earth policy it has employed in Iraq. Soft power revives the inviolable principle of national self-determination, as proposed by President Woodrow Wilson after WW1, which underpins the United Nations.


But will Obama win? Is America ready for a black president? Well, just look at him. He’s the most charismatic politician in the world - a black Kennedy. His primary campaign mobilised young people and minorities - the groups Clinton thought didn’t vote any more. Thanks to Hillary, most of Obama’s negatives have already been exposed, like his pastor Jeremiah Wright’s anti-Americanism. But McCain has skeletons too: he was friends with the Mafia boss Joe “Bananas” Bonano; his wife was a drug addict who stole from her own charity; he has a notorious temper and has a reputation for extramarital affairs.

I think McCain will be careful not to throw too much mud in case it sticks to him. His tax-cutting conservatism is out of time, as is his dumb-ass militarism. America is a country in decline, an international pariah with an economy wrecked by financial excess. The Barack identity represents America’s best hope of political renewal. America really has no choice but to embrace him. It could be their last hope.