Statement

05/11/2008

Politics, life after the reshuffle and the credit crunch

Just a couple of months ago Labour looked as though it had been nailed into its political coffin. The only thing left was decomposition. In particular, opinion against the Prime Minister seemed to have hardened beyond any point of return, among the press, his party and the public. But now, without a flourish of course, the great political magician is back.

The position of the Labour government is still fraught with strategic difficulties ahead, as the financial shock develops into an economic bruise. But in their favour, they have recovered the ear of the nation and the press, they have relearned unity and above all else the will to fight the Conservatives. The polls have shifted significantly their way. ‘Mojo’ is not a word that normally makes one think of Gordon Brown, but staffers at No10 are saying that their man is bristling is energy and confidence, that he has his mojo back. And the leadership contest in all-but-name that happened between him and David Miliband at Labour conference has added legitimacy to his leadership.

Meanwhile, the Conservatives still enjoy enviable, if reduced, leads. They have time left to stick Brown with responsibility for the downturn, especially as it starts to hit pockets as well as headlines. Also, David Cameron’s rave reviews in the press for his conference speech showed that he has passed a threshold with opinion formers in the media, who consider him now ready for high office. On the other hand, their opinion poll leads has been shown to be weak and Osborne’s recent embarrassment only confirms that they are – fairly or not – seen as the ‘City’ party at a time when that is almost a swear word.

Finally, it is worth remembering that the Conservatives have a high electoral bar to pass if they wish to form a commanding majority in the House of Commons. Even if they did a straight swap of vote share with Labour from the 2005 election, Labour would still be the largest party.

What does this mean for industry and Intellect? There are gains and opportunities. Gordon Brown is casting around for a narrative to explain how the UK economy has a future beyond just financial services and consumer debt. He is a long term proponent of the knowledge economy, going back to the time of Bill Clinton and the early ‘90s. Intellect will continue to work with his policy advisors on that theme. Peter Mandelson, whose political resurrection has been if anything more dramatic that Brown’s, is still remembered by the industry for his commitment to the knowledge economy. Finally Stephen Carter’s new role, as the ‘converged minister’ between BERR and DCMS and his brief to produce a ‘Digital Britain’ action plan for May, means that there is a real impetus for action. Intellect is already responding to several different Digital Britain requests from BERR and seeking a more co-ordinated role as their work plan emerges.

The ironic result of the government finally running out of money and definitively breaking its fiscal rules, is that it is now spending as freely as consumers were a few months ago - before they cut up their aching credit cards and sat indoors to wait out the recession. The industry should not be shy about asking for government help to mitigate the current financial crisis and government investment to build the tech sector as an engine of future growth; either in the form of money or deregulation. Intellect’s manifesto work on how the tax system can support innovation will, of course, play into this. Also, Intellect’s submission on how the Tech sector can help the economy, sent to Gus O’Donnell, Peter Mandelson and others, shows how the industry is willing to engage and contribute at the leadership level.

Intellect also continues to build its relationship with the Conservative party and other opposition parties. As well as contributing on innovation, Intellect has engaged with front-benchers across the Conservative party with meetings and speaking opportunities. Discussions continue with Francis Maude about a secondment, and he will be coming to talk at the next board meeting.

Looking forward, we can see the emerging outlines of Labour’s strategy. On the economy it aims to show to it has both the competence to deal with current programmes, and the vision to invest towards a better future, through borrowing if need be. They are also showing a renewed ambition to expand the Labour tent again to the critical C1, C2 voters and marginal southern suburban seats, through tough rhetoric on crime, immigration, deregulation and human rights. This is another illustration of how the leadership now has the internal strength to play to win rather than needing to mollify critics within the party and preserve its base.

The Conservative strategy has yet to emerge fully. It remains to be seen whether they will present themselves as the sober party of financial responsibility and attempt to contrast that with Labour. Or whether they will follow the urgings of many commentators on the right and come up with a programme of deficit-funded tax cuts to contrast with Labour’s deficit-funded infrastructure spending. In other words if they will see Labour’s Maynard Keynes, and raises him one Freidman.

In any case, the mutability of recent political fortunes, both for individuals and political parties, strongly suggest a balanced approach of influencing policy-makers and the opinion-formers around them, across the spectrum. This is the opposite of assuming a few individuals in leadership positions will certainly hold power in the next government. Instead we are looking at thought-leadership, targeted press, targeted marketing and a spread of personal contact. It also implies Intellect and the industry forming strong positions, so that it can participate in the policy debate and manifesto process that leads into the next election. We should be preparing of government of either stamp, or coalition, or a period of weak government.