That Darling moment

Now is the time for a political party to confront the economic challenge of Brexit

Theo Bertram
Aug 9, 2017 · 3 min read

After the crash hit, there was no politics any more: it was just a desperate series of actions to limit economic damage.

If Gordon Brown had known — a year or two before — that it would hit us like it did, he would have acted differently.

The storm could not have been avoided but we could have better gotten ready. Batten down the hatches. All hands on deck.

10 years on from the first signs of the crash, Labour remains unforgiven for failing to foresee what would follow.

Just imagine what damage would be done today to a political party that knew an economic storm was coming but did nothing about it.

Among many leavers and remainers in Westminster, there is a fallacy that Brexit will — one way or another — work itself out in a few years. It will take its political and economic toll and then there will be an opportunity to pick up the pieces. Give it time. Ride it out. And things will return to normal.

They will not.

Brexit will soon mutate from a political challenge to a fundamental economic one. As it does so, it will grow. If you think Brexit already dominates political debate: you ain’t seen nothing yet.

The nature of the economic challenge is still unclear. Perhaps we are embarked upon a glorious trade adventure on calm seas.

Perhaps not.

Either way, it is striking that neither Labour nor the Conservatives are preparing the nation for the economic journey ahead.

It is hard — very hard— in politics to be anything but incremental and short-termist. Political capital is hard-won: betting your entire political credibility on an outcome that — even if you are proved right — could take a year or more to pay out is almost unthinkable.

On August 29 2008, the Observer published an interview with Alistair Darling — the Chancellor of the Exchequer — in which he set out an apocalyptic vision of the economy.

‘Britain is facing “arguably the worst” economic downturn in 60 years which will be “more profound and long-lasting.”’

It was ridiculous. The Chancellor was trashing the economy. Torching Labour’s reputation for economic management. The interview sent shockwaves through Whitehall and the City. Gordon was absolutely furious. He wanted to kill him, not sack him.

But at some point — six months, maybe a year later — that interview was the only thing that our economic credibility could still cling on to. After all, Alistair had been right. He had grasped the magnitude of the crisis. In retrospect, that interview was a pivotal moment in Labour’s response to the crash: it kept Alistair — and Gordon — at the helm.

In August 2017, we know with certainty that within one year we will enter a major new and challenging economic system.

A year from now, it will seem quaint — a distant luxury—that the Brexit debate was a political one about immigration, border controls and the judicial system.

The pound. Interest rates. Housing. Jobs. Whatever the economic forecast, these will be the fundamentals.

If a political party prospers from Brexit, it will be one that openly faces the economic challenge: that Darling moment.

It could be Labour. It could even be the Conservatives. Or it could be a new one built for purpose.

A change in the weather is coming. We have all been warned. The electorate will not forgive a failure to prepare.

Theo Bertram

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