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Sunday, August 31, 2008

Crisis? What crisis?

If stories in today's press are to be believed then this government really could not organise a piss-up in a brewery. Faced with allegedly the worst economic crisis in sixty years, a collapsing house market complete with negative equity and rising repossessions, soaring food and fuel prices and opinion poll ratings to rival those of George W. Bush, Labour's relaunch seems to be running off the tracks before it gets going.

For a start it turns out that Alistair Darling's hand-on-heart interview was not part of some cunning government plan to get the public's attention prior to the introduction of new policies after all, or if it was nobody told the Prime Minister. It is widely reported that Gordon Brown ordered his hapless Chancellor to go on the media and backtrack as fast as was humanly possible on his predictions of doom, doom and more doom.

The Times has a particularly cheering piece in which it asks: 'Is the Chancellor Alistair Darling dancing to Vince Cable's tune?' If he is then we may have a way out of this mess. And yet there is unanimity amongst all the papers that government ministers are squabbling over the details of the rescue package.

The Observer reports that Downing Street and the Treasury are still locked in last-minute tussles over the details of a rescue plan for the housing market, and that the Prime Minister is under pressure to include increased benefits that would cover mortgage payments for homeowners who lose their jobs:

Talks are also continuing between Downing Street, the Treasury and housing ministers over whether to freeze stamp duty, with senior Number 10 aides arguing that such a move could tempt buyers back and help to shorten the duration of the house price crash. They also fear being outflanked by Tory promises to cut stamp duty.

This appears to be a disagreement about details but other papers with their own agenda think that the differences go deeper. The Mail on Sunday for example say that the Treasury believe that the rescue package is unaffordable.

Whichever is right the government cannot allow this speculation about internal discussions and manoeuvrings go on too long for fear that they will undermine the effectiveness of whatever measures they bring in.

While they are at it they may well need to find a way to quell the near-civil war that the Chancellor's remarks have introduced into the Parliamentary Labour Party. It is now looking increasingly likely that either Darling or Brown will have to go, or both. Suddenly, the summer has got more interesting.
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