Even if they appear so in retrospect, the events that define political death rarely stand out as such at the time. Neither do the politicians that eventually 'take the hit' for those events always deserve what they get. In that sense the Northern Rock episode probably won't have an immediate impact on the polls and it's clearly nonsense to lay the blame for the whole thing at Alastair Darling's door - but none of that means this won't have very serious political consequences for the government.I doubt many voters really understand what happened with Northern Rock and fewer still are inclined to better that understanding. They know there was a run on a bank, the government had to step in to find a buyer and, having failed to do so the bank was nationalised - that's about it. If pressed they'd probably acknowledge that this was a markets thing, something global and beyond our control and, as I suggested above probably wouldn't draw any immediate political conclusions from it. But these things have a habit of lingering in the public consciousness, becoming character-defining events that somehow typify the politicians in office when they occurred. This happens even when the events are actually pretty tangential to government policy. Popularity operates on an exponential curve and by the time they are kicked from office governments end up taking the hit for ridiculous things they had nothing to do with (as well as many they did of course). It's why a disproportionate number of successful campaigns are built on the 'change' theme - it taps into general unease and gives people an opportunity to vent by kicking someone powerful where it hurts and hoping this change will trickle down into inconsequential little areas in their lives that politics never touched in the first place.
In this sense Northern Rock is a disaster for the government, however valid most of the claims that there was little different they could've done. The seasoned strategists in Brown's circle will know this and it'll be interesting to see how it's played. And finally, if you want proof of how serious this is for the government look at this leader in the Guardian today:
"The chancellor's search for a third way between nationalisation and receivership was an unworkable attempt to triangulate corporate collapse. A braver government would have reached this point long before....The political and financial cost of the Northern Rock affair are as yet incalculable. The bill to taxpayers will only become known once Northern Rock is broken up and sold - and that will be difficult if the housing market slumps. In the meantime taxpayers will fund billions in extra borrowing that could have been put to more constructive use. The political price will surely be higher still, even if nationalisation works. Black Wednesday was at least an economic success though a political disaster. Northern Rock just looks like a disaster. Voters may be persuaded that it is all the fault of global markets and city speculators, but Labour's reputation for economic competence, the bedrock of success in three elections, has cracked if not shattered"
4 Comments:
Black Wednesday connected the Goverment to the 15% Mortgage rate. Northern Rock is just chatter by compasrison . I see no comparison whatsoever.
House prices going back up again, mortgage rates still stable in single figures. Mr B can breath easily; apart from the usual politics obsessives and the shareholders, nobody cares...
"apart from the usual politics obsessives and the shareholders, nobody cares..."
The 'shareholders' now being, well, all 60 million of us?
I agree with Newmania. Double take. Yes, I agree with Newmania. This is as nothing. We, the people, own the assets and I tend to agree with Hopi Sen that this will turn into a useful business on which we, the people, will turn a profit.
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