Council tax offer less good than it looks

The Conservative proposal a two year council tax freeze looks like an attractive offer to voters against a grim background. However, it is less good than it seems. The freeze would only be available to councils who kept spending increased down to 2.5 per cent and many argue that would only be possible with significant cuts in services.

Moreover, commentators have pointed out that if the Conservatives are as economically responsible as they claim, there should be no tax giveaways at all to sweeten the bitter economic pill. It is also worth noting that the offer would be of least value to the less well off, allowing critics to pile in and claim that this is further evidence that the Conservative commitment to social justice is only skin deep.

The proposal to have an independent budgetary office is one that has been recommended by a number of economists, but it would be only advisory and would have no real power over policy. Indeed, it is very difficult for politicians to surrender control over fiscal policy, given that 'getting and spending' is at the heart of what government does.

The economic crisis has served Gordon Brown well for the time being, narrowing the Conservative lead, although it is still in double figures at 10 to 12 per cent. Moreover, Gordon Brown and Alastair Darling have opened up a lead in economic competence over Dave Cameron and George Osborne.

The financial crisis has overshadowed the Tory conference and denied them much of the media coverage they had been hoping for. Meanwhile, several days have passed without news of plots against Gordon Brown or speculation about how long he will stay in office.

Bozza hits back at terminator

Boris Johnson has hit back at the Governor of California, Arnold Schwarzenegger, who was heard last year describing Bozza's speech as 'fumbling' in a clip widely aired on YouTube.

Now Bozza has got his own back at the Governator in a speech at the Tory party conference by describing him as 'a monosyllabic Austrian cyborg'. I am not sure he would have said that to his face. But perhaps Boris has been taken out of those old Charles Atlas courses that built you up so that you could act when you had sand kicked in your face on the beach (apparently at one time a common social problem).

Yesterday Bozza pretended to (or did) search out Dave Cameron in the audience, yelling 'There you are, Dave'. Although 'call me Dave' likes that form of his name to be used by his acquaintances, and I always use it on this page, he is less keen on its informality now that he is trying to develop the gravitas of a prime minister in waiting.

Actually it's quite cool these days to be a Dave. A TV channel of that name (which to my annoyance displaced UK History on Freeview in the evenings) clearly appeals to a young male demographic with repeats of Top Gear and the like and has been quite a success.

Mixed messages for Dave

So we head into the third of the party conferences with the Conservative lead over Labour reduced to a still comfortable ten points after a 'Brown bounce' from Labour's conference. Interestingly, the latest poll from Glenrothes show Labour and the SNP neck-and-neck. Labour have put up the head of the local secondary school who seems to be a tough cookie.

The latest Populus poll shows that just 56 of Conservatives supporters say that their vote is a positive one for the party, while 44 per cent say it is a vote against Labour. Of course, negative votes still count. However, 81 per cent of the Labour vote is positive and only 19 per cent against other parties. This suggests it is more solid, although that is not surprising when Labour has been largely reduced to its core vote.

Perhaps more interesting is that only 28 per cent of voters say that the Tories have changed much under Dave which suggests that there are limits to the 'decontamination effect'.

Dave has always warned his troops against complacency and has said that the phrase 'Go back to your constituencies and prepare for government' won't be used in Birmingham. It was, of course, one of the most foolish statements ever made in British politics.

Dave's speech will be a difficult balancing act: enthusing his activists, having a pop at Labour, but also reaching out to the broader electorate with a positive message about why they should vote Conservative.

So, farewell then, Ruth Kelly

Ruth Kelly is to leave the government in the impending reshuffle to spend more time with her family and this time it appears to be a genuine excuse - she has a young and large family. Apparently, she asked to leave four months ago, but Gordon Brown asked her to wait until the autumn.

Some commentators this morning have portrayed this as a further blow to Gordon Brown, taking the shine off the success of his conference speech. Whilst it is true that Ruth Kelly appears to have been unhappy with the direction of the Government for some time, the Transport Secretary is hardly a leading figure in the Government.

What this perhaps illustrate is how the media frames any story concerning the prime minister and this is not a problem he can make go away.

Gordon survives the test

Gordon Brown's speech at the Labour Party conference today may be regarded as something of a success, even if the principal effect was to shore up his support within the Labour Party. The speech was better delivered than is usually the case with the prime minister. This was probably because he was speaking from the heart, using illustrative examples from his own life in terms of the importance of good public education and a National Health Service. He eschewed the fashion for scrolling screens with the text and spoke from notes. It was also a nice touch to get his wife Sarah to introduce him.

His main themes were stability and fairness. In terms of stability, he was the serious man for serious times, playing to his strengths. He got in a dig at Dave Cameron by saying that this was no time for novices. In terms of fairness, he was stressing a theme that warms the hearts of Labour activists, but it may also play well with a wider audience in these straitened times. The speech was short on specifics, but there isn't the fiscal scope for many giveaways.

Whether the speech will produce much of a poll bounce remains to be seen. But the prime minister has bought himself valuable time with his party. The conference response to his most likely successor, Dave Miliband, was muted, reflecting the fact that his base in the party is far from being a broad one.

The Two Daves

Dave Miliband and Hazel Blears delivered a coded attack on Gordon Brown's stewardship at the Blairite Progress beanfeast in Manchester last night. Meanwhile, a subtle campaign is going on to 'humanise' Dave as a potential prime minister.

While I was waiting for my takeaway on Saturday evening, I noticed what we would have called a 'yuppie' in the 1980s carefully perusing a long piece in The Times magazine on Dave Miliband.

Much of it was a recycling of familiar material: musician wife; adopted children; dad was a leading Marxist theoretician - great respect for him, but don't share his views. We also got the occasional personal revelation: he has a painting of nude women in his living room. Daring Dave, then. We were also told that he was well on top of his briefs in the Foreign Office and could handle awkward customers like the Serbian foreign minister.

However, the most interesting part of the article was the comparison with Dave Cameron. They were born 15 months apart, both have a first in PPE from Oxford, both married creative women, both became MPs in 2001. Admittedly, Dave M. went to a comprehensive rather than Eton and one, he tells us, with a 'sense of edge'. Dave lives dangerously.

Dave M's take on Dave C was that he is very fluent, but he lacks depth and that his commitment to equality of opportunity and social justice was superficial - or at least advocated the end without willing the means. The charge that Dave C is persuasive but shallow is one I have heard before.

So perhaps we shall have the Battle of the Daves at the next general election.

So, farewell then, Alan Johnson

Alan Johnson has ruled himself out of any Labour leadership contest, thus reducing the number of 'safe pair of hands' candidates and by implication increasing the chances of Harriet Harman as a compromise candidate.

I thought that Dave Miliband's endorsement of Gordon was less than ringing (Dave seemed to be involved at an unexplained event at a semi-detatched house, although it looked no more riduculous than Gordon's staged arrival in Manchester in front of an enthusiastic claque of about twenty Labour activists). Anyway, Dave said something to the effect of 'going forward under the leadership of Gordon Brown'. Going where or for how long was not clear.

The clear message from the Labour hierarchy is that Gordon should not be dropped in the middle of a financial crisis where his interventions have been timely and well considered. The danger time will be after the May European and local government elections when time is running out for Labour. BTW, one Labour MEP told me yesterday she is worried about BNP gains in the context of a low turnout in the European elections.

Gordon isn't looking good. Can't something be done about the shadows under his eyes, even if they are the result late nights saving the nation?

Still, he does look like a serious act compared to Nick Clegg. As the FT remarked, the Lib Dems tried jolly (too jolly), then they tried mature (too mature) and now they have gone for Cameron lite.

They went on to argue the Lib Dems are a bit like the tethered balloon they had at their conference. You ascend, get a vague view of hopeful distant shores, wobble about a bit and then descend to earth.

The gathering storm

A Minister of State in a department that many think has no real purpose is not high up the political food chain and is probably not even a household name in Scotland. Nevertheless, this latest resignation is more significant than a challenge from the former assistant minister of fish or whatever. It is another blow for Gordon Brown and keeps the media feeding frenzy going.

Apparently this particular minister was flushed out through his links with a minor rebel (Siobahn McDonagh) and as a former Catholic priest could not square defending Gordon with his conscience.

Ms McDonagh got star billing in the Sunday Times under the heading 'Will this woman bring down Brown?' The obvious answer is 'probably not', even though the article reveals that the devout Catholic MP is being compared to Joan of Arc. Burning at the stake in her suburban constituency of Mitcham and Morden is not on the agenda.

Senior Cabinet ministers feel that Gordon Brown should be given his chance to rally the party at what will undoubtedly be a ferbile conference. But he is unlikely to assuage the doubts and the poll numbers will not recover. So it's going to be a tough autumn for Gordon and he could eventually be pushed. But there is still no clear successor and it won't be the Cabinet minister who wields the knife (remember Michael Heseltine?)

Meanwhile, Dave Cameron can sit back and enjoy the mayhem, hoping that it will continue as long as possible before a Labour leadership contest is followed by a general election. Canada once had a woman prime minister who held office for some weeks before being defeated in a general election. Step forward Harriet Harman.

Vince gives it large

In what sometimes qualifies as the Very Silly party of British politics, Vince Cable is a beacon of sanity not just within the Liberal Democrats but in British politics generally. The cheeky chappie told Britain to confront its 'national obsession with property' and stop using homes as 'gambling chips'.

The former economist urged the Government to resist 'propping up' the market so that prices could 'fall back to a sensible level which makes housing affordable to ordinary families.' Politicians had to find a new, more honest language better suited to times of economic hardship.

Ministers should avoid 'socialising losses' and financiers rattling their begging bowls and demanding help from taxpayers should be sent packing. In a sense that is what the federal authorities have done with Lehman Brothers, deciding that the US taxpayers should not pay for the mistakes of its senior management.

Vince and Nick Clegg also managed to get their tax cutting package through the conference. Unfortunately it focuses on the totem of cutting the standard rate, when raising allowances to take the less well off out of tax altogether might be more sensible. Higher rate taxpayers, an increasing number of people, may not yet have realised that they would be paying more because of a cut in pensions tax relief.

Interesting that Vince's endorsement of Nick Clegg was somewhat lukewarm. Perhaps the ballroom dancing maestro feels that he may yet shimmy into view as Lib Dem leader while Clegg fends off charges that he is 'Cameron lite'.

Economic and political events elsewhere have also take the sheen off the Lib Dems conference. No one is shouting: 'Global crisis. Send for Nick Clegg.' But they could send for Vince Cable and should have listened to his warnings in the past.

The need for a narrative

Plotters against Gordon Brown now have a tactic of a kind which is to ask for leadership nomination forms, hoping to create momentum for a contest. These efforts are reinforced by what appear to be carefully timed statements from dissidents. It is always amusing to see how these individuals are then billed as 'ministers' by the media when they are about as low as it is possible to be in the food chain. This applies even more to those who achieved junior ministerial status and were then let go.

Is this effort going to go anywhere? No. First, they are not going to get 71 signatures. Even more important they are not to get a credible candidate to put his or her name forward in a letter to the party. Although they have some recruits from the left, and Gordon Brown is being attacked from two sides, the core of the rebellion is made of ultra Blairites.

Nevertheless, the spectacle of the Labour Party tearing itself apart in public is not good for the Government and it is not good for Gordon Brown. Once again he appears to have made a mess of the extension of the 'Warm Front' scheme, hinting at a great deal of help for those in fuel poverty and then simply extending the scope of a scheme which has often been blighted by shoddy workmanship.

What Brown needs is a stellar performance at the party conference. However, on current form, he is unlikely to deliver it. The leadership row will then rumble on without resolution while the Conservatives benefit. What Labour really needs is a new narrative rather than a new leader. Of course, a new leader could help that search, but it is not as if that narrative is readily at hand. Like Thatcherism, New Labour has become an exhausted project. A Labour equivalent of John Major just might avoid electoral defeat, but would not resolve the underlying problems.

Tories drop public spending pledge

The Conservatives are dropping their pledge to match New Labour's spending targets during their first three years in office. As an article in the latest British Politics makes clear, if one looked at the small print, the pledge was never that unambiguous anyway and probably only applied up to 2011.

Nevertheless, this is a significant development. George Osborne argues that public spending cuts are necessary to raise in 'shocking' public borrowing. But with the Conservatives enjoying a big lead in the opinion polls, perhaps he feels that the time has now come to give something to Tory activists.

Health, education and international aid are exempt from the cuts, so it is quite difficult to see where the cuts are going to come from. It would be difficult for the Conservatives to cut spending on law and order and defence would presumably also be exempt, given that they seem to be even more assertive liberal internationalists than Labour. Transfer payments (pensions and benefits) are difficult to cut. Scrapping the identity card scheme may not bring immediate savings given the contracts that Labour has signed and cutting back on regional development agency spending would not yield that much.

Osborne is also worried out being outflanked by Vince Cable from the Lib Dems who has called for £20bn of public spending cuts to provide tax cuts for lower and middle-income families. This has not gone down too well with some Lib Dem activists, but Cable probably has a better sense of the political pulse than they do.

Osborne is also not going to push ahead with environmental charges or 'green taxes', arguing that they can too easily become stealth taxes.

Osborne's move does give Labour a possible line of criticism of the Conservatives, although he has tried to cover himself by exempting the most popular areas of public exoenditure.

Clarke's intervention backfires

Charles Clarke's criticisms of Gordon Brown leadership seem to have backfired, simply confirming his reputation as a maverick who has little broader support in the party. Even those in the party who are critical of Gordon Brown feel that the time is not yet ripe for a challenge, not least when a political re-launch is being attempetd.

The political re-launch seems to have faltered already. Hopes of some sort of payout to help with energy bills have been dropped, either because the energy companies won't provide the funds or because increasing the cost of their carbon permits would be incompatible with European Union rules.

Margaret Beckett appeared on Radio 5 this morning to steady the troops (she said at her own behest) and, typically, did an effective job. She should be brought back into the Cabinet in some kind of non-portfolio role.

Gordon Brown will have to get through the Labour conference and deliver an effective conference speech, although communication to a large audience is his greatest deficiency. Then there is the Glenrothes by-election, although Alex Salmond may have made his first error with his advocacy of a local income tax. He admitted that those in a household with a joint income of £64,000 would have to pay more under his scheme, but he seemed to think that someone on 32k a year was super rich, whereas two teachers living together could easily be earning that amount. People like that not be pleased about paying an extra 3p in the pound in income tax.

Talking of hapless, Harriet Harman has caused a storm by demanding that prostitution be criminalised. Given that there are already a number of measures dealing with the subject on the statute book, I think that what she had in mind was prosecuting men who purchase sexual services. Sex trafficking in women is clearly a serious problem, but in general the subject of prostitution attracts more hyprocrisy than almost any other in politics: indeed, it is an issue which only the Women's Institute has sought to tackle in a sensible and balanced way.

Oh dear, Darling

Alastair Darling's gloomy prognostications have apparently led to 'robust exchanges' between him and his patron Gordon Brown: in other words, there has been an almighty row. The Chancellor's position is said to be in question. The pound slumped against the euro and august bodies like the CBI rushed to say that things were not as bad as the Chancellor claimed while usually they are willing to pile on the gloom as a means of criticising government policy.

What the Chancellor said in an interview with The Guardian is that the present economic times - the combination of the global credit crunch and soaring international commodity prices - were as bad as they had been for more than half a century. Mervyn King said as much earlier in the summer, and it's not quite the same as saying as the economy is on the brink of a major recession.

However, these subtleties have been lost in the media row. It has overshadowed the Government's latest re-launch in terms of a package to help the housing market. These measures are open to criticism from a number of directions. On the one hand, they could be portrayed as insufficient, which is not surprising given the Government's fiscal position. On the other hand, they can be portrayed as using taxpayers' money to subsidise those have been feckless. Rather than tinkering with stamp duty, and then only for a year, there is a case for letting the market correct house prices until they are once again affordable.

Attention has now turned to who might replace the Chancellor and it is clear that, as with the prime minister, there is no leading candidate. Choosing David Miliband would give him a boost, making him look less like a sixth former on work experience and more of a serious candidate for prime minister. His brother, Ed, might actually be a better choice but that would mean too much Miliband at the top of government.

Ed Balls would seem like a case of favouritism. Alan Johnson would be a safe pair of hands, as would Jack Straw. One of the best choices would be John Hutton who is competent and would reassure business and the City whose confidence in Labour has been badly dented.

But then Hutton is against the windfall tax on energy companies which is gaining ground in popularity on the Labour backbenches. No doubt it would also be popular with the electorate, but it would also be a piece of economic illiteracy which shows little understanding of how a market economy works.

The relationship between the prime minister and the chancellor lies at the heart of government, particularly in difficult times. When prime ministers lose or sack their chancellors, it reflects badly on them: recall Harold Macmillan (Selwyn Lloyd) and Margaret Thatcher (Nigel Lawson). Alastair Darling has not been involved in the equivalent of a 1992 crisis and I think that he will survive.

Not much hope for New Labour

The 'Year in British Politics' meeting at the British Politics Group of the American Political Science Association is always good value and this year's event in Boston Ma. was no exception. The reviewers were Sir Ivor Crewe, about to take up his duties as master of University College, Oxford and Phil Cowley, who will shortly be joining the Treasury on a secondment.

Both speakers saw little hope for a New Labour recovery. Sir Ivor saw an analogy with the situation John Major faced in 1995-7, although Major was more popular than his party while the contrary is the case for Brown. The economy did well in this period, and the economy could well experience a recovery by the next election, but it would be a voteless recovery for New Labour.

Phil Cowley suggested that if the plane was heading for the ground and the pilot seemed to have lost control, one might as well give the air hostess a chance (I do not think this was a reference to Harriet Harman). However, Phil went on to point out, this would mean a contest in which all New Labour's divisions would be exposed to public view, followed by strong political pressure for an early election.

Sir Ivor pointed out that Dave Cameron had accepted most of the New Labour settlement - well funded public services, the minimum wage and tax credits etc. - and in practice policies would differ little from those under New Labour. There would be changes in stamp duty and inheritance tax, and no doubt other changes in personal taxation.

One of the most difficult issues for Dave to handle will be relations with the European Union with Phil Cowley pointing out that Europhiles have virtually disappeared from the Conservative Party (there may be five left). The party is now divided between Euroscpetics who want to re-negotiate the relationship and 'better off outers'. Dave will be under pressure to get a better deal from Brussels for Britain and that will not be easy.

The Conservatives are unlikely to take many more seats in Scotland and will in effect have the English Parliament some of them call for. But wily operator Alex Salmond would no doubt make use of this situation to claim that the Conservatives had no legtimate mandate north of the border in an effort to boost support for his independence referendum.