Tuesday, 12 February 2008

Darling battered but safe

Chancellor Alastair Darling is coming under attack from within the Labour Party as well as from business, but rumours that he will be reshuffled in the summer are wide of the mark. Such a move would be a confession of failure by the Brown Government as a whole.

It never makes sense to get rid of your Chancellor or force him out. Harold Macmillan rode out the resignation of Peter Thorneycroft with the sang froid that concealed his inner turmoil, dismissing it as a 'little local difficulty'. However when he sacked Selwyn Lloyd as part of the disastrous 'night of the long knives' it was seen as a sign of weakness of his part and dented his reputation rather than restoring it.

Mrs Thatcher never really recovered from what was in effect the forced resignation of Nigel Lawson. John Major should never have appointed Norman Lamont in the first place, but the embittered Shetland Islander remained a poisonous thorn in his side, striking a cruel blow with his observation that Major was in office not in power.

Alastair Darling took over just when the economy was starting to run into trouble. However, he made things worse by some errors of his own. His handling of the Northern Rock affair showed that the skills had served him well as a low profile minister clearing up messes were less suited to the much higher profile role of Chancellor.

But what really upsets many people in the Labour Party is the way that he has undermined ten years of work by New Labour to establish itself as the natural party of business. His handling of the capital gains tax reforms led to Number 10 announcing ahead of him that they were being watered down.

Now acolytes of Mr Brown have told the Financial Times of their dismay over aspects of Mr Darling's pre-budget report, particularly the CGT reforms. Just as well that there is an economic crisis and sacking the Chancellor would be seen as a sign of panic.

No comments: