Michael Davenport reviews
It is ironic that I should be writing this half an hour after Gordon Brown rather unexpectedly came out into Downing Street to announce his resignation and was immediately driven off to tender it formally to the Queen. He said how much he had enjoyed the job, not “the prestige, title and ceremony. No, I loved the job for its potential to make this country I love fairer, more tolerant, more green, more democratic, more prosperous and more just – truly a greater Britain.” After being pipped at the post as Labour Party leader by Tony Blair following the death of John Smith in 1994, and, after Labour won the 1997 election, being given the Chancellorship, together with an unheard-of control over the nation’s purse strings, Brown plotted and manoeuvred for a decade to secure the post of Prime Minister. When his 2007 putsch against Tony Blair succeeded, he became PM unopposed within his party, let alone elected nationally. As PM, at least after some initial acclaim for his handling of the foot and mouth epidemic, the floods and the terrorist incident at Glasgow airport in 2007, he has disappointed the electorate, his party, and, one presumes, himself.
Might things have been different? Christopher Harvie’s new book questions whether Brown did, or might have done over a longer premiership, anything to achieve the goals he spoke of in his resignation speech. The Broons of Broonland are taken from a cartoon strip in the Scottish Sunday Post, a working class family with the same hard-working, left-leaning, Presbyterian values as those inherited by Gordon Brown, values which Harvie argues were replaced by the shopping and fucking culture – to which Brown, as Chancellor, apparently contributed so much.
Harvie was an old buddy of Brown from the Scottish left-wing intellectual world of the 1970s. They were both on the staff of the Open University. Together they wrote a pamphlet, The Scottish Assembly and Why You Must Vote for It. In his youth Brown was anarchic, an idealist and robustly socialist. His friends and mentors included Tom Nairn, John Smith, Robin Cook and Donald Dewar. He wrote his Glasgow University doctoral thesis on “Scottish Labour, 1906-29”. He has written several books, including a biography of James Maxton, a Scottish socialist, and co-edited the pro-devolution Red Paper on Scotland in the 1970s. He also wrote “Where there is Greed”, a blistering critique of Thatcherite economics.
Harvie, now a nationalist member of the Scottish Parliament and professor at the University of T?bingen in Germany, is clearly an unreformed socially-conscious and caring Scots leftie and a firm admirer of Germany’s effective social market. If only Gordon too had remained a tartan socialist! But Brown has not forgotten his background, taking that dreaded free marketeer, Alan Greenspan, to Adam Smith’s birthplace in his own home town of Kirkcaldy (and Harvie’s seat in the Scottish Parliament). Smith had warned of “the conspiracies of merchants”. ”Only after things had fallen apart would Brown (and Greenspan) recognize how both had sinned against the savant’s advice.” But not only had Greenspan become a hero of Brown’s – and was officially made an adviser to the Treasury – so had Milton Friedman and the “Faustian” Larry Summers, both American neo-liberal economists, the latter most famous for having to quit his Presidency of Harvard because of disparaging remarks about women academics. But by then, one might say, Brown had lost the plot. Harvie blames him for going with the political flow, as regards consumerism, corporate short-terminism, market fundamentalism, bankers’ greed, the breakdown of cabinet government (surely more Blair than Brown), currying favour with the US – is Gordon really an Ayn Rand fan? – and the football thing. And what Harvie calls “illegalism”. He is talking of the black economy, not a few illegal migrant cleaners but quasi-criminal activities such as those of BAe bribery, loan sharks, sub-prime mortgages and derivatives fraud à la Goldman Sachs, where regulatory safeguards are inadequate, as are the funds for policing whatever safeguards exist. Harvie suggests that “had Brown realised that far from markets offering ‘invisible’ or ‘helping’ hands, the one over which he presided offered a cocktail of deviance in international trade, financial instrumentation and crime”.
Yet “to Rupert Murdoch’s King David he was Absolam, the beloved son”. Harvie attacks Brown for his London-centric attitudes and indifference to the impacts of policy on the regions, and particularly on the different worlds of Scotland and Wales. Despite his earlier pamphlet he was dismissive of Scots claims for more budgetary control and had no truck with the SNP. A good example of the government’s obsequious attitude to the US, the “special relationship”, was the 2006 decision to upgrade the Trident missile system with its £65 billion bill to which Brown agreed, and yet his military budget was insufficient to properly equip the troops in Afghanistan. Or did Brown retain some wistful sense of duty to the Scottish economy where Trident is based and the two new aircraft carriers are to be assembled – the latter in Rosyth, not far from Kirkcaldy.
Under Brown’s chancellorship, the economy became even more dependent on the City. Manufacturing ebbed. Armaments were an exception and BAe became the largest employer in manufacturing. After a career of arguing that the state had a role to play in the modernisation of industry, Brown now decried efforts to support manufacturing in Europe. China could produce the goods and save us all a lot of money. The main growth sector was that of financial services. By 2006 40% of world trade in financial derivatives took place in London. The higher UK GDP growth rate meant that “[i]n 2005 Brown saw his eight years as Chancellor as proof of the wisdom of the deregulated UK and the folly of statist ‘Old Europe’”.
Harvie would have us believe that all this is witness to the loss of Brown’s earlier passionate desire for social justice. Only this year Gordon Brown told a student website, “The thing I’m proudest of as a student journalist was the campaign I led to get the university to disinvest from apartheid South Africa . . . I also got involved in the campaign for the cleaners to get decent pay and became the second student to be elected Rector, chairing the governing body of Edinburgh University.” But is that anything more that nostalgia? And this is a man who employed Damian MacBride in his private office.
Perhaps Harvie’s main argument is that Brown did not try to right the social wrongs of Thatcherite economics. Brown would probably argue that his main achievements as Chancellor include successfully pushing for large-scale debt forgiveness for the poorest countries at the G8 meeting at Gleneagles in 2005, increased expenditure on education and, in particular, the NHS, and reshaping the tax and benefits system mostly in favour of the less well-off. Certainly his mantra – ending boom and bust – now looks fanciful but he did manage economic policy over ten years of strong growth and low inflation. Certainly average incomes grew substantially. Sadly at the same time inequality of incomes and wealth increased. True, if you drop the bottom and top deciles of the income distribution, incomes have got slightly less unequal since Labour came to power. Put those deciles back in and with huge salaries and bonuses, especially in banking, but also through the boardrooms of the FTSE 100 companies and even in the civil service and local government, and the still very low welfare incomes at the bottom, the distribution has become decidedly more unequal. The rising tide of economic growth has left the poor stranded. The trickle-down assumption was totally misconceived. And studies show that social mobility has diminished. But Brown hasn’t discussed this – at least in public. Instead recently he has dwelt largely on his world role in managing the 2008 banking crisis.
As for Brown’s main achievements as he would see them, the Gleneagles agreement, was a real step forward, even if only partially implemented. The second, throwing money at health and education, was well-intentioned but badly managed and an inordinate share of the extra funds was, and still is being, misspent on administration costs. That also meant cheating on his own self-imposed rules on government borrowing as well as using the financially damaging PFIs. But as for the banking crisis – yes, as host of the G20 summit in London and subsequently, he did play an important part in leading the world to a resolution of the problems. In a slip of the tongue he claimed in Parliament to have saved the world – “No, I mean the banking system” – but continued to claim that he led the world in the recapitalisation of the banks, a process followed in Europe and America. But he himself must take some blame for the crisis in the first place. True, no other government foresaw the banking collapse and subsequent recession. Brown’s light touch regulation of the City certainly contributed, though so-called market fundamentalism was accepted by all parties in the UK, the US and most of Europe. Nevertheless, as Harvie points out, a number of people close to Brown were asking whether the housing, personal debt, hedge fund and other financial bubbles could not but burst.
But, in the longer run, equally if not more significant was the fiscally imprudent, politically motivated, surge in the deficit and public debt in the years before 2008. That meant that when the banking crisis arrived and triggered a worldwide recession, the huge additional sums spent on needed Keynesian stimulus, have put the country in a terrible fiscal situation that will be felt for at least a decade.
As for the restructuring of tax and benefits, though he did much to help the poor and disadvantaged – the minimum wage, tax credits and so forth – his credibility was seriously damaged by the 10p tax issue. In the 2007 budget he announced that the 42p in the pound standard tax rate would be reduced to 40p. To do this he would abolish the lower 10p rate. It soon became clear that in fact a large number of low earners would be seriously damaged by this and Brown was obliged to go through a number of other tax and benefit changes to offset it. He claimed not to have realised the negative effects but this is hard to believe. The Treasury employs hundreds of economists to analyse all the impacts of any proposed tax change. In retrospect it seems as though he was just trying to garner popular support by reducing the standard tax rate. Another incident, less important politically, was the derisory increase in state pensions of 75p a week though this shows his lack of an effective political antenna rather than anything underhand. It was for such ill-considered initiatives that Vincent Cable at PM’s Question Time commented, “The House has noticed the Prime Minister’s remarkable transformation in the last few weeks from Stalin to Mr. Bean.”
Harvie’s book is full of life, amusing and wide-ranging. It sets economic concepts and policy-making into a wide social and cultural context. At the same time it is difficult to follow. He jumps at random between historical events, personal reminiscences, verses of poetry (mostly Burns and MacNiece), detailed economic and social statistics (though he does talk of Marx’s obsession with quantification), literary references (often to his own works, though Buchan, Defoe, Mary Shelley all get a mention), snippets of Scottish history (or more than a snippet in the history of Fife from 1295), diatribes on everything from the gambling culture to third rate universities and their Aunt Sally degrees, comparisons with how things work in Germany, i.e. better, and random thoughts; a kedgeree of the critical ingredients and gratuitous taste-treats. Much of it is distressing and somehow most of that – from pyramid selling to ruined town centres – is Gordon’s fault, directly or by association. But if Brown had stuck to the values of his left-wing Presbyterian roots he would never have become Chancellor under Tony Blair, let alone Prime Minister. And there would probably have been no less pyramid selling or ruined town centres. Harvie ends with a poem by Louis MacNeice. It includes the lines:
None of our hearts are pure, we always have mixed motives,
Are self-deceivers, but the worst of all
Deceits is to murmur ‘Lord, I am not worthy’
And, lying easy, turn your face to the wall.
Broonland: the last days of Gordon Brown by Christopher Harvie
(London: Verso, 2010)