olitical speculation is dominated by the prospect of Gordon Brown becoming Prime Minister. Assuming that Blair does resign, and that the Scots don't put a spoke in Gordon's wheel by voting nationalist and undercutting his position, it is clearly time to think what the future might be under a Brown Premiership.
It is clear that Gordon Brown has been successful as Chancellor of the Exchequer. Unprecedented levels of growth, wealth and prosperity – albeit grossly loaded toward the ultra rich – low unemployment and an unprecedently high standard of living were goals previous Labour chancellors could only dream of. Brown inherited a favourable economy from the Major years. As Mr Prudence, Gordon Brown has not wasted his good fortune.
However, while the fervent embrace of the free market has been successful for the last decade, the future holds risks which New Labour appears unable to grasp. The price of making London the centre for capitalist hot money, and allowing foreign firms the unchecked ability to buy into British companies and operate a hire and fire policy unparalleled in the rest of Europe is increasingly a game of Russian roulette.
The New Labour argument for allowing foreign capital to buy everything from football clubs to P&O and move jobs around with sweet abandon is that this benefits the economy. New investment is generated, while dynamic entrepreneurs shake up the market and motivate sluggish British performers. Old style jobs are moved to low cost low skill producers in the far east, allowing British workers to move into new well paid professional employment. This is held to be a win-win situation.
And yet there is unease. Capitalism is not a long term activity. It is telling that it is not a leftist, but the Chief Executive of blue chip high tech company Rolls Royce, Sir John Rose, who told the Financial Times in early February (1) of his fears of Britain becoming an “aircraft carrier for lots of foreign owned businesses”. The danger of this was that Britain was becoming a “monochrome economy” relying almost exclusively on services. Moreover, the decisions which were made on investment and development were being made elsewhere, and that the lack of a ‘road map' of industrial sectors in which the UK wants to compete has never been set out.
Uncertainty permeates the thinking of the business community in Britain. Richard Brennan, chief executive of West Midlands lobby group Birmingham Forward, has told the Birmingham Post that Birmingham was at risk because “We have shifted from capital and labour intensive manufacturing to the new 'footloose economy' of business and professional services”. Brennan argued that this new economy “although extremely successful is both fragile and dangerous”
Fragile and dangerous are not words which occur in New Labour's rhetoric. Instead, New Labour talks glibly of the “knowledge economy” and “building a world class educational system”. Nothing wrong with the latter, but this has been the goal of every Prime Minister since Jim Callaghan's Ruskin speech in 1976, generating unprecedented levels of innovation frenzy and initiative overload. Why does the goal remain unachieved?
For Sir John Rose there is a growing '‘recognition that if we believe we are going to be a knowledge based economy, then not having a world class education system is a disadvantage'. This is a polite way of saying that if manufacturing and all it stands for is to go to the Far East, then Britain's schools and colleges have to become a magnet for business. And no-one seriously claims that they are.
This is a message Brown will pay attention to. For Brown as much as Blair it is self evident that the key to everything is Education, Education, Education. And thus more frenetic efforts to innovate and initiate will come on stream, as he has already signalled with the dangerous and counter productive attempt to raise the school leaving age to 18. Pausing to investigate why a generation of frenetic change has failed to bring about the fabled world class education system is unlikely to be part of his agenda.
The New Labour project will continue to roll forward under Brown. Up to now, the embrace of the footloose world economy has produced success, though with dangerous social threats in the growth of debt and inequality. But New Labour's nightmare is that the footloose elements of capital will dance away from the UK, particularly in an international recession. And then Britain will be left with a hollowed out economy with little to sustain it. Plan A was very successful for Gordon Brown and New Labour. But what is plan B?
There is no obvious answer to this question. Worryingly, there is no sign that Gordon Brown even understands the question. More of the same, particularly where education innovation is concerned, seems the only road map on offer. Brown is risking all on an economic model which is fragile and dangerous. Intelligent people need to look beyond Whitehall gossip around the date of a Brown succession to what this would actually mean.