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Labour ARE thinking of a Spring election

Labour can hardly dare to believe their luck; the nation’s misfortune has been their salvation. The greatest economic crisis in half a century (and counting) has transformed their leader’s performance and their electoral prospects. The opinion polls are going Gordon Brown’s way. The Tories are all over the place, the Liberal Democrats are sinking without trace, and even the SNP is back in its hole (for the moment) after Glenrothes.

Do not believe the hype – Labour ARE thinking about an early election, in fact they can think of very little else. Only the bitter memory of the ‘election that never was’ in 2007 has stopped Labour ministers and MPs screaming from the rooftops “we’re back!” and that an early election is a foregone conclusion. Indeed, that election campaign will effectively begin tomorrow with the Chancellor, Alistair Darling’s, Pre Budget report.

This will set the scene for an election-winning budget in March which will feature a programme of spending projects and tax cuts on the theme of getting Britain back to work. Pie in the sky it may be, playing dangerous games with the public finances too, perhaps – but it will sound like a Keynsian return to the politics of growth and jobs, a New Deal from the “global chancellor”. And with tax cuts too, from a Labour not a Tory government, and plausibly justified on the grounds of fiscal stimulus.

David Cameron and George Osborne, have rejected tax cuts – to the dismay of the Tory core – and have called instead for public spending cuts.(ok, they say that they only want to halt increases, not cut headline figures – but it comes to the same thing) This allows Gordon Brown to cast them as latter day Thatcherites who would break the productive economy on the wheel of fiscal conservatism. Labour will dig out grainy footage of the Tory recessions in the 1980s, and evoke memories of punk monetarism and millions on the dole to hammer home the point that the Tories cannot be trusted to keep Britain in work.

David Cameron may be right to warn that you can’t get out of a debt crisis by borrowing. Cameron is certainly correct in saying that any big spending programmes and tax cuts will have to be paid for by higher taxes in future, if the size of the state is not reduced. But this is an very difficult argument to make in a country which may be falling, not just into a recession, but into a depression. The case for fiscal stimulus is almost unanswerable: the private sector is in ruin and can no longer deliver, so the state has no choice but to step in.

Gordon Brown will appear with Barack Obama at the next G20 meeting of industrial nations in London in April to hammer it home. The PM will lead the call for a new global financial system and Keynsian government interventionism. He will be applauded by economics professors like Reich and Nobel Prize-winner, Paul Krugman who are advising Obama and have been praising the Prime Minister for his vision. Profligacy is the new prudence.

The G20 will be an opportunity for Gordon Brown to bask in the reflected glory of the Obama presidency, still in its heroic phase. It could be the ideal springboard for an election in the spring or early summer of 2009 on the theme of keeping Britain in work. The CBI is forecasting three million unemployed by 2010, and while this will probably be an underestimate, it’s clear that most redundancies will not hit until later in 2009. Next spring unemployment will still be something of a novelty for most people.

Cutting and running? Hardly – the present government will be four years old by May 2009 and the two previous Labour administrations lasted four year terms. Indeed, not going to the country next year might begin to look like self-indulgence, or even lack of confidence. And after the disaster of the ‘election-that-never-was’ in 2007 the PM has to do everything possible to look decisive and purposeful. He has to meet his electoral destiny sometime and the sooner now the better.

So, it seems to me that an election next spring is almost unavoidable. But would he win it? Well, the opinion polls are going the right way, with the Tory lead cut to three percent last week in a MORi poll <> It is too early to say that Brown would win a working majority, but he would be in with a chance. And even if he misses narrowly he could still fall back on an alliance with the Liberal Democrats – “uniting the two radical strands of UK politics” which was a part of the original Blairite project.

The PM could even enlist the Liberal Democrat treasury spokesman, Vince Cable, into his government of national unity. Cable and Brown go back a long way, since the former contributed to Brown’s “Red Paper on Scotland” back in the 1970s. The Libdem economics guru is not only an astute politician but one of the best economic commentators around and was warning about the credit crisis before anyone else. Cable has called for nothing short of a “war economy”. Enlisting him into the new Brown administration, perhaps as a revamped employment minister, would convey the right sense of wartime cooperation – of parties pulling together to get the economy right. It would be blood, sweat and tears as the nation spits in the teeth of economic depression.

All except the Tories, of course, who have opted to play scrooge with their horrid public spending cuts. The Conservatives would be cast as latter day Thatcherites, hopelessly out of tune with the times. And Brown wouldn’t have to worry about the SNP spoiling the show, since – following Glenrothes – it looks improbable that Alex Salmond will be able to deliver his 20 nationalist MPs in any general election in June 2009.

The SNP leader cannot be written off, of course, and nationalism isn’t over just because HBOS has died the death. But most nationalists agree that there was a marked change in the air after the Glenrothes by-election. Tens of thousands of jobs are likely to go in the near future, and just as the banking unions have looked south for guarantees on job losses, so many Scots will – rightly or wrongly – look to London for their security, at least in the short term. at the very least it will take time for the nationalists to re-boot their politics to take account of the new situation.

The only person whose nose might be out of joint is Peter Mandelson the Business Secretary Last week the Business Secretary expressed a wish to emulate John Sergeant’s success on Strictly Come Dancing. He will face the humiliation of sitting around the same cabinet table as Vince Cable who was a great success on the reality dance contest two years ago. It could be murder on the dance-floor. But it’s a price worth paying for getting Gordon his second term

About @iainmacwhirter

I'm a columnist for the Herald. Author of "Road to Referendum" and "Disunited Kingdom". Was a BBC TV and radio presenter for 25 years - "Westminster Live" and "Holyrood Live" mainly. Spent time as columnist for The Observer, Guardian, New Statesman. Former Rector of Edinburgh University. Live in Edinburgh and spend a lot of time in the French Pyrenees. Will that do?


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