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Brown fails to bail out sinking ship

Gordon Brown has suffered a torrid year. His popularity has slumped in spite of saving the world at least three times in various G20 summit meetings. Having taken decisive action in pouring billions into the banking system at the height of the financial crisis, New Labour finds itself presiding over the worst recession in generations and the ruination of the public finances.

Billed as the start of a political fightback, nothing at last week’s Labour conference quite went to plan. The conference hall itself was a sideshow. The number of delegates was seriously down on previous years. The media circus and lobbyists treated the whole week as nothing more than a warm-up for the main event in Manchester this week. At times, Brighton felt like a ghost town.

For my money, the Labour conference illustrated how much of Brown’s leadership will be defined by the decision to bail out the banks and the Government’s failure to exact its pound of flesh to return. With one hand the Chancellor writes blank cheques to the fat cats in the City while promising to cut public services for hard working families with the other. Labour delegates could sense who are the winners and losers in Austerity Britain. New Labour was starting to look like the party of the few.

As if to remind the party faithful, the ageing members of the collapsed ASW pension scheme lined Brighton beach yet again to call for justice for pensioners just months after the fiasco of Fred Goodwin making off with his taxpayer-funded pension worth millions. It is with some justice that delegates felt uneasy at the turn of events. They wanted blood. The leadership offered meek promises to crack down on bank bonuses. We were told the love affair with the City is over but no one was really listening.

The only time the conference hall bothered the outside world was when the PM made his annual make or break address. That fell flat as another New Labour love affair, this time with the media, came unstuck. Like rats deserting a sinking ship, The Sun jumped overboard with impeccable timing. And what of the leader’s speech? The oratory was (at times) uplifting. But yet again, the Prime Minister failed to communicate what he actually stands for.

If anything, Brown’s speech revealed that Labour has finally given up on winning the next election. The strategy is not one of securing a fourth term but simply damage limitation. It was a speech full of pork-barrel politics aimed at impressing Labour’s rank and file – increases in child tax credits and the minimum wage, linking state pensions to earnings and free social care for all. Even I kept asking myself “Who is paying for all this?” Step forward Middle England. All they can look forward to is the inevitable tax bill. And with that the election is lost. The message to the party faithful was clear – go back to your constituencies and prepare for opposition.


Diverse dangers

One of the big debates that has taken place over recent years concerns the desirability of adopting a diversified investment strategy. Popular wisdom has it that, by building a portfolio of diverse asset classes, investors would be protected against any setback in a particular area.


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