A run on a major British bank was something I never expected to see in my lifetime.
That sort of thing, I thought, belonged to the nineteenth century, along with the cries of ‘father is ruined’ that so often featured in Victorian fiction. A bank chaired by an aristocratic Daily Telegraph science writer; managers besieged in their offices by angry pensioners; Post Office clerks touting savings accounts to queuing depositors; and the authorities, after initially assuring us that it would be morally hazardous to bail out a reckless bank, agreeing in the end to do just that.
There has been something delightfully Ruritanian about the whole thing, although I doubt that Northern Rock customers would see it that way.
But what does it mean for Gordon Brown’s premiership and for the prospects of a general election? The events of the past week surely rule out an autumn election. But it is still widely assumed by politicians and journalists — though not, I note, by the bookmakers — that the alternative is next spring. Only last weekend, Sir Menzies Campbell, speaking on BBC TV news, said: ‘This will be the last Liberal Democrat conference before the next general election.’ The Labour conference, it was thought, would be a pre-election rally.
Yet Brown has a comfortable working majority. He is not legally required to seek re-election until summer 2010, although convention suggests that, if he is confident of winning, he will prefer May 2009 or thereabouts.
It is said that he needs a ‘personal mandate’ to continue governing, but that is constitutional nonsense. We do not elect prime ministers in this country; we elect MPs, who use their judgement to decide which leader to support.
James Callaghan succeeded Harold Wilson in 1976 and waited more than three years to go to the country, governing for much of the time without a Commons majority.
Neville Chamberlain succeeded Stanley Baldwin in 1937, appeased Hitler for the next two years and then declared war, all without bothering to consult the voters. Neither Harold Macmillan nor John Major rushed to the polls after succeeding in 1957 and 1990 respectively. All these successions were less preordained than Brown’s. Everyone knew that a vote for Tony Blair in 2005 would sooner or later mean a Brown premiership.
The reason most commonly given for Brown choosing an early election was — to invert New Labour’s original election-winning line — things can only get worse, with food prices due to rise sharply, house prices to fall and public sector pay to be squeezed.
Well, they’ve already got worse. The Northern Rock debacle could prove as damaging to Labour as the Exchange Rate Mechanism disaster was to the Conservatives — although it can be argued that Chancellor Alistair Darling, after brief hesitation, acted more decisively than Norman Lamont did in 1992. Also, the threat to savers in a few banks (savers being an unfashionable species nowadays) is on a different scale to the threat to mortgage holders posed by 15% interest rates.
Some commentators think we are on the brink of a full-blown US recession, dragging down the global economy. Even if that doesn’t happen, the credit crunch threatens Britain’s financial and business services industry, which now accounts for almost 30% of gross domestic product. The consequences for jobs and house prices in London and the Southeast, where roughly half the Labour marginals lie, hardly bear thinking about.
Instability can work both ways, however. Brown has built a reputation for prudence and sound finance — although what is prudent about allowing an economic boom to rip on a mountain of household and commercial debt, I have never understood. When they fear for the future, voters tend to stick with faces they know and to be chary of trusting people who have been out of power for a decade or more.
That was Major’s salvation in 1992. Voters waited for calmer waters five years later before they risked an untried government. But if Brown were to call an early election, his reputation as a safe pair of hands would be jeopardised. He would look reckless and opportunistic; it might even seem that he was running away.
I don’t believe Brown has ever taken seriously the idea of an election before 2009. He has kept us all guessing for one reason only. The prospect of an early election keeps the Opposition parties in a constant state of uncertainty and, equally important, quells any thoughts of rebellion among Labour backbenchers and supporters, particularly the trade unions.
I am reluctant to tempt fate by echoing the pre-war Daily Express, which announced in bold type across its front page in 1938 that: ‘There will be no war in Europe this year or next’. But I will say it all the same: there will be no general election in Britain this year or next.
