MORE THAN MIDSUMMER MADNESS

Ben Pimlott finds historical patterns

to explain the Government's continuing unpopularity

A 33.5 PER CENT lead in the opinion polls must be a lovely thing to read about between swims, especially if it has a lot to do with your own appeal. So Mr Blair may be forgiven a few grins as he takes up the reins of the Labour Party at the end of a well-earned vacation.

Never in the history of polling have such ratings been acquired in a party leader's absence. 'Isn't he doing well?' Labour peo- ple are saying, in wonder and delight: it used not to be like this. There is even a `stay away' tendency in the party which thinks the best thing would be for the leader to remain on holiday permanently. 'He's done brilliantly simply by not being available,' as one battle-hardened Labour MP put it to me last week. 'When he gets back he's bound to offer a hostage to for- tune like saying "Good morning" and they'll be onto him like a ton of bricks. "So the Labour leader thinks it's a, 'good' morning! What naive, innocent, impracti- cal, self-serving optimism!" ' Much of Labour's present support is tin- sel. In some ways the present across-the- spectrum enthusiasm for the Left (if that is still the appropriate word) resembles the wave of excited support for the SDP which accompanied the Gang of Four's defection from Labour in 1981: in Decem- ber of that year, Gallup gave the centre alliance 50 per cent. Eighteen months later, Margaret Thatcher romped home, and the Alliance came third. Given 'Oh, for heaven's sake, Brian, give it a rest. I get enough of that at work.' Labour's long-established talent for Colombian-style own goals, the possibility of a fifth Tory victory remains real.

It is a good parlour game to construct the necessary circumstances for such a res- urrection: if Mr Blair's 'new' Labour Party gets confused about how much more to tax the better-off to pay for increased public spending; if, with inflation down and unem- ployment falling, Central Office can pre- sent Britain's improved performance as (don't laugh) the `Major miracle'; if the IRA give up, and so on.

But the fact remains that most people regard this as a doomed government. The interesting question is why. The simple answer — it has governed badly — is not enough. When did that ever put off the vot- ers? Certainly, a period of stumbling administration plus a few minor scandals don't, in themselves, account for the strange shift in political opinion which is widely felt to be taking place.

For there is surely a more than midsum- mer madness to the Blaireuphoria. It isn't just the statistics of public opinion, it is partly the sense of an administration with- out rational defenders. (Maybe this is unfair. Are you, dear reader of Britain's most thoughtful Conservative-aligned pub- lication, a Major Government enthusiast? If so, please write and tell me all about it.) It is also, quite simply, a gut feeling in favour of change. In this, the slump in gov- ernment popularity in the middle of the last two parliaments don't begin to com- pare.

One reason advanced is that the public 'feel-good factor' remains heavily below the contentment zone. This is not so much an explanation as a tautology. Nevertheless, it is true that there is a perplexing gap between the state of the economy and pub- lic perceptions of it. Usually, the public gives the government credit for improve- ments. This time, it hasn't.

Here there is an interesting historical pattern. The evidence of opinion polls shows clearly that the starting point for vot- ers' disenchantment was Black Wednesday, exactly two years ago this month. On that extraordinary day, Britain catapulted itself out of the ERM, making nonsense of everything the then Chancellor of the Exchequer, Norman Lamont, had said since he took office (and John Major too, but the buck — or rather deutschmark — didn't stop there). Almost overnight the Government's ratings slumped ten or eleven points, and they have never made up the lost ground.

In 1994 there is a different chancellor, a different policy, and a much less depress- ing array of economic statistics. Yet there is something about forced devaluations that has a peculiarly devastating impact, both on the morale of governments, and on public confidence in them. Economists frequently tell politicians that altering the exchange rate is merely a technical adjust- ment. Politicians ignore them, putting all their political chips on the value of ster- ling. The stakes rise: every time there is a run on the pound, premiers and chancel- lors have to express their ever-deepening conviction that devaluation would be disas- trous for the nation. They have also had to put their money where their mouths are, spending much of the nation's resources in the process. Meanwhile, the public watches the performance and is more than half persuaded.

Then — when the point of no return is reached — political credulity is gone for ever. It is like Matilda, once believed, but alas no more, in the Cautionary Tale: 'Fire! Fire!' she cries. `Little liar!' is the response. Yet, oddly enough, serious eco- nomic hartn has almost never been trace- able to the act of devaluation itself.

The most notorious devaluation crisis of the century was in 1931. Fear either of `coming off the gold standard', as it was called, or of taking the measures needed to avert such a perceived calamity, paralysed Ramsay Macdonald's Labour cabinet and led to the formation of a National one. The split in the Labour Party over this issue undermined its claim to understand the economic system and kept it out of office for the rest of the decade.

After the war, the spectre loomed again. In 1949, a fierce battle raged in the Trea- sury and Bank about the desirability of a devalution which, at that time, was bound to have huge worldwide repercussions. Sir Stafford Cripps, most upright of chancel- It's for productivity. We doubled our standards.' lors, was firmly opposed; and, having said not once but many times that such a step would not be taken, he dug an ever deeper pit for himself and the Labour government in the process.

A barrier of words, infused with Cripps's sincere belief in the dishonesty and immorality of breaking his word, was erected in a vain attempt to stem the tide of economic forces building up against an overvalued currency. The very courage and ferocity of this resistance meant that, when the barrier fell, not just the Chancel- lor, but the raison d'être of the govern- ment, were irretrievably shaken. Devaluation was accepted as inevitable in the summer, and Cripps — already sick — left office a few months later. Labour lost most of its huge majority in the ensuing election, before dividing into warring fac- tions on the issue of public expenditure.

The pattern recurred with a vengeance in the mid-1960s. The bitter experience of 1949 was still fresh in the minds of Harold Wilson and his colleagues when they took office 15 years later; and it became part of Wilson's tragedy that he was so deter- mined that Labour should shake off its reputation as the `party of devaluation' that he put this objective above virtually everything else. On the very day he became premier, when a considered devaluation might have made sense, he unequivocally ruled it out. Later — as economists and others began to whisper about its necessity — he became a slave to his own decision. From 1964 until 1967, the Prime Minister and the Chancel- lor of the Exchequer, Jim Callaghan, crossed their hearts and hoped to die umpteen times, swearing that devaluation would never happen. Such was the taboo on the word that it became known in Whitehall as the 'unmentionable'. In July 1966, Labour's programme was effectively castrated in order to protect the interna- tional value of sterling. In November 1967, devaluation took place.

Both Wilson and Callaghan recovered from the trauma. Whether the Labour Party has yet done so is another matter. Arguably, Labour's continuing nervousness on economic matters can be traced back to this episode. Certainly, Wilson's post- devaluation television appearance marked the end of an era. In an infamous state- ment, Wilson imperturbably explained to a public taught to believe that a change in the parity would be the economic equiva- lent of a nuclear war that 'the pound in your pocket has not been devalued'. Up till that point, the Tories had been seen as the stupid party, Labour as the party of techni- cal know-how and economic expertise. Both images underwent a swift mutation.

It was as if, just as in September 1992, scales had suddenly fallen from the voters' eyes, although, curiously, the economy didn't do badly in 1964 to 1970 as a whole. In September 1969 Roy Jenkins, the new chancellor, was able to announce a huge rise in exports. Progress was maintained, and Labour's later claim to have bequeathed a strong economy to the Heath government in 1970 was a perfectly valid one.

Yet it was also true that recovery had more to do with luck and a safe pair of hands (there is an obvious parallel today) than ideology. The point about the 1967 devaluation (together with the 1966 defla- tion that sought to avert it) and the 1949 one, was not that they damaged the econo- my. If anything, they did it good. It was rather that they seemed to reveal the hol- lowness of the ruling party's trumpeted philosophy.

The doctrinal erosion of what used to be called Thatcherism has been a longer pro- cess. August 1992, however, was undoubt- edly a rock-fall. Never before had a chancellor been defeated on the central plank of his stated policy with such a rever- berating breaking of political wind as occurred two summers ago. Cripps's deval- uation, though reluctant, proceeded in an orderly fashion over a period of weeks. The 1967 change was hastier, but still looked like a sober decision, carried through with dignity. By comparison, Black Wednesday — with a jack-in-the-box chancellor announcing yo-yoing interest rates — looked like a Rowan Atkinson advertisement for Barclaycards. After- wards, claims (even if objectively correct) that it had all been for the best simply caused astonishment. Voters — with little knowledge of, or interest in, economic the- ory — have a nose for which orifice politi- cians are talking out of.

There remains one other possible twist. Devaluations destroy the credibility of par- ties, but they don't necessarily kill them electorally. Attlee — just — won the 1950 election. At the beginning of 1970, Harold Wilson staged a remarkable political recovery. A few months after staring anni- hilation in the face, he seemed to be head- ing for a third victory, and — if he had timed things better — might have succeed- ed.

In 1970, Labour benefited from the improvement in the nation's fortunes. So did Wilson, who had previously been under siege from disgruntled colleagues. It is hard to get rid of a premier who is rising in the polls, however low the base.

Here is a straw of comfort for our pre- sent Prime Minister. On the other hand, Wilson — even in defeat — stood 23 per cent ahead of Heath in the popularity rat- ings. In short, Wilson was an electoral asset to his party. How conceivable is it that Mr Major will ever appear the same?

Professor Ben Pimlott is the author of Frus- trate Their Knavish Tricks: Writings on Biography, History and Politics, published this month by HarperCollins, price £20.